6 November 2018

After Brexit, Britain has the chance to create a Restoration Economy


With Brexit on the horizon, Britain has an opportunity to create a Restoration Economy. We could deliver the Government’s ambitions for a 500,000 hectare Nature Recovery Network as enshrined in the 25-year Environment Plan within five or six years, with the added bonus of delivering economic benefits to a new set of skilled workers in rural areas where job prospects are currenty challenging.

Farmers would be paid well for the things we want – public money for public goods. The misery of hard work for no liveable income that we hear from the farming sector would be a thing of the past and our biodiversity would be valued and restored to its former glory.

The two key difficulties that conservation has faced ever since it became “institutionalised” through the establishment of organisations dedicated to it over a hundred years ago, are access to land and access to finance. Only by resolving these at scale will effective biodiversity conservation be delivered in the UK in the coming decades.

Whilst many farmers and landowners already deliver some conservation on their land, mechanisms to facilitate greater and larger-scale participation by them will be crucial. Biodiversity restoration will not happen if just left to the conservation NGOs or to government-controlled financing – neither has access to land on a large enough scale, nor is the current grant-based funding anything like sufficient to make the transformational change needed in our countryside.

The UK is one of the most biodiversity-impoverished places on earth. That we have lost so much natural and semi-natural habitat and species abundance in the UK, especially over the past 60 years, is, from an ethical and moral viewpoint, nothing short of catastrophic.

The main causes of loss have occurred in the farming sector as a result of agricultural intensification. Many lowland areas of the UK have effectively become ‘green concrete’ as far as biodiversity is concerned. Development impacts have caused additional losses. Both sectors now need to rebuild our biodiversity.

The economics of farming are in a parlous state. Defra’s own statistics from UK farms show that, across the average farm business, producing food loses money. Farm incomes are only just viable because of diversified revenue streams, agri-environment payments, the basic payment scheme (subsidy) and spouses’ income.

When we leave the EU subsidies will end, although there will be some form of transition period. Many farmers in the UK will be unable to continue farming, especially in places such as the uplands of Britain where they cannot move into other types of farming systems, being constrained by altitude, climate, a restricted growing season and poor nutrient conditions.

Farming will therefore have to change – and that is a good thing. We will need much more sustainability in our farming practices as advocated by the Sustainable Food Trust and others. We will need a significant reduction in the use of inputs such as fertilisers and pesticides, less reliance on expensive human-driven machinery, and fewer people working in the fields. Upland livestock farming will need to change to use stock as the tools to create and manage environmental benefits that people want to see.

A report published today by the Institute of Economic Affairs reviews the opportunities and proposes that innovation in agriculture in the coming years could spare land that, in addition to a significant switch to more sustainable farming systems, would enable us to rebuild this biodiversity. In the order of £7bn of funding could be provided through three avenues.

First, by redeploying Pillar 1 basic payment scheme funds in order to establish and let large-scale and long-term (25 year) environmental land management contracts to farmers and landowners, reversing the devastating impacts of the Common Agricultural Policy.

Second, using mandatory requirements on planning authorities to require all development to deliver biodiversity net gain, whereby developers purchase conservation credits, the funds from which are used to contract farmers and landowners to create, enhance and manage large-scale habitat banks.

And third, through the introduction of natural capital accounting within the corporate sector, whereby companies purchase environmental credits that bestow a licence to operate as part of their annual financial reporting mechanisms. In so doing, corporates would increase their attractiveness to investors.

Ethics and intrinsic value alone will not protect existing nor restore lost biodiversity in the future. Our ‘love’ of wildlife to date has not succeeded in averting massive biodiversity loss in the countryside. Innovations in agriculture alongside much greater sustainability will provide the space for nature within our countryside.

New financing mechanisms and vehicles, such as environmental land management contracts, habitat banks, green bonds, environmental credits and impact investing can provide the money. Bringing innovation and finance together will deliver the restoration economy and provide the much needed transformation in the way our countryside looks and the wildlife for which it provides a home.

David Hill is the Chairman of Plantlife and the Northern Upland Nature Partnership, a Board Trustee of the Esmee Fairbairn Foundation and a
Commissioner with the RSA Food Farming and Countryside Commission.