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This eBook first published in Great Britain by William Collins in 2019

Copyright © Dieter Helm 2019

Dieter Helm asserts the moral right to be identified as the author of this work.

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Source ISBN: 9780008304478

Ebook Edition © March 2019 ISBN: 9780008304485

Version: 2019-02-04

Dedication

To Sue, Oliver and Laura, as always, and to Amelie of the next generation in the hope that the natural environment she will inherit will be in better shape for her to enjoy.

Epigraph

They paved paradise

And put up a parking lot

With a pink hotel, a boutique

And a swinging hot spot

Don’t it always seem to go

That you don’t know what you’ve got til it’s gone

They paved paradise

And put up a parking lot

Big Yellow Taxi by Joni Mitchell, 1970

I thought it would last my time –

The sense that, beyond the town,

There would always be fields and farms,

Where the village louts could climb

Such trees as were not cut down;

I knew there’d be false alarms

[ … ]

Things are tougher than we are, just

As earth will always respond

However we mess it about;

Chuck filth in the sea, if you must:

The tides will be clean beyond.

– But what do I feel now? Doubt?

Selected verses from ‘Going, Going’

by Philip Larkin, 1972

Contents

Cover

Title page

Copyright

Dedication

Epigraph

Preface

List of abbreviations

Introduction: Our natural capital inheritance

PART ONE: The Prize and the Risks

Chapter one: The prize

Chapter two: Business-as-usual

PART TWO: Building a Greener Economy

Chapter three: Restoring rivers

Chapter four: Green agriculture

Chapter five: The uplands

Chapter six: The coasts

Chapter seven: Nature in the towns and cities

PART THREE: Principles, Paying and the Plan

Chapter eight: Public goods

Chapter nine: Paying for pollution

Chapter ten: A Nature Fund

Chapter eleven: The plan

Conclusions: Securing the prize

Endnotes

Bibliography

Index

Acknowledgements

About the Book

About the Author

About the Publisher

PREFACE

I have been thinking about the issues in this book for a long time. I grew up on the Essex marshes, and spent long hours around the sea walls and creeks of my grandfather’s farm. It is the place of my memories, and places are how we remember nature. It was a small farm by modern standards, around 350 acres. It was a mixed dairy and arable farm, with the traditional farmyard chickens and ducks, a big vegetable garden, a small orchard and of course beehives. It had a patchwork of more than a dozen fields, butting up to the sea wall.

In spring there were flocks of lapwing nesting so densely that it was difficult to avoid treading on the eggs. There were lots of skylarks and the full range of farmland birds, and of course a stand of great elms. House sparrows literally swarmed in the farmyard, which was often dense with flies and therefore swallows and house martins. There were barn owls. In winter, the marshes came alive with wildfowl. There were flocks of brent geese, teal and widgeon. So great were the numbers that books were written about wildfowling and punt guns and all the paraphernalia of Essex marsh life.¹

Psychologists will tell you that what happens in that magic time of childhood forms the subsequent person. It is why getting children and nature together is so vital for the future of the environment. It is hard to put into a person’s mind what they never had in childhood. In my case, although most of my career has been spent in mainstream economics in Oxford, the experiences of those early years have never left me. It is one of the reasons why, in 2012 when I was given the opportunity to chair the Natural Capital Committee (NCC), I grabbed it.

By that time an enormous amount of damage had been done to the natural environment. After World War II, British agricultural policy, and then the Common Agricultural Policy (CAP), had transformed the land, polluting as it went. My grandfather’s farm was sold and turned into one large field in the 1960s, with the hedgerows literally dynamited and mole drainage applied. That put an end to the lapwings, and most of the skylarks too. ‘Progress’ had arrived.

What happened to that farm was but a microcosm of what was happening everywhere at an accelerating rate from the 1960s. Alongside the intensification of agriculture, industrial development, housing and roads bisected the landscape and left fragments of nature in between. Population growth brought with it increasing consumption, and some of this has proved highly damaging. Prosperity came, built on a fossil fuel economy, bringing with it pesticides, plastics and petrochemicals.

The consumer boom drove a wedge between nature and people, and in a highly urbanised society fewer and fewer people experienced nature and, not surprisingly, cared less and less about it, except perhaps the bits they saw on television. There were exceptions and conservation successes, but the trend was abundantly clear. My grandfather’s farm, with all its biodiversity and wonder, would now be regarded by most people as something that might appear in the fiction of H. E. Bates’s The Darling Buds of May, or a nature reserve – an ‘uneconomic’ yet quaint relic of a more primitive time.

Many environmentalists had reached a point of despair by 2011 when the coalition government published its White Paper, ‘The Natural Choice’.² The National Infrastructure Plan, the house-building targets, and the overwhelming emphasis on coping with the fallout from the financial crisis of 2007/08 set other priorities, with nature very low down the pecking order. A quick read of the 2011 White Paper confirms this: it is largely without content. With little to actually contribute to turning the tide on environmental damage, it took the classic Yes Minister approach: it set up a committee to think about it. This was the origin of the NCC.

Why, then, take on the chair of the NCC, apart from sentiment? Why try to work on the inside rather than protest on the outside? Or simply give up? There are several reasons. The past approaches have not worked, despite occasional Pyrrhic victories, and hence the NCC could hardly make matters worse. But the main reason was that I was optimistic that the NCC could really make a difference. For all the vacuity of the 2011 White Paper, there were two elements that could be built on: the clear aim to integrate the environment into the heart of the economy; and the overarching political commitment to leave the environment in a better state for future generations.³

Perhaps naively, I thought both worth taking seriously. I am an economist, not a scientist, and what interests me is the allocation of scarce resources. That is what economics is all about – making the best of what we have, and investing in the best possibilities to improve our lot. While humans have so far got by very well by pitting progress against nature, and especially in agriculture, this does not seem to me a good option going forward. The damage has gone too far, and our prosperity is likely to be compromised if we go on as we are. Put negatively, the environmental damage is going to make us all poorer. Put positively, we can be much better off if we protect and enhance our environment. It is not nature versus the economy; it is investing in nature to increase prosperity. My grandfather’s farm might not have turned out to be so ‘uneconomic’ as was easily assumed in an agricultural context riven with perverse (uneconomic) subsidies.

This is beginning to be understood on the global stage, even if little is being done to address the problems. The climate change penny has dropped, and people are beginning to understand that the mass extinction under way is unlikely to have a happy ending for us. At the local level, the challenges of mental health, of obesity, and of the loss of beauty and wonder in our lives are getting more bandwidth. Added to this broad dawning of understanding, there are lots of specific costs to the pollution we are continuing to cause. Plastics are now headline news. Water companies have reached the end of the treatment road and recognise that it is cheaper to pay farmers not to pollute. The loss of soil is leaving farmers exposed. Poor air quality carries on killing people. None of this makes much sense even on narrow economic grounds.

Perhaps even more encouraging is the recognition that nature has value in itself, and not just for the ways in which it indirectly underpins our economy. Nature is the main organised interest in this country, way beyond football and trade unions. There are literally millions of members of nature organisations. Enjoying the great outdoors is the main leisure activity, whether it be a walk in the park or along the canal or riverbank, or visiting a National Park. People like nature and they care about it. They have what E. O. Wilson called ‘biophilia’.⁴ The BBC series Blue Planet II was watched by 17 million people in the UK. Gardening, that intimate engagement with plants and wildlife close up, is a national obsession. All of this great energy and enthusiasm can be harnessed to protect and enhance our natural capital.

Upon its creation as an independent advisory committee to the government, the NCC set about two main tasks: first, defining what natural capital is, identifying which bits matter most, and creating a conceptual framework around science and accounting; and second, putting the overarching generational objective into a practical and deliverable framework. Against the odds, and in the face of much scepticism from environmentalists, we did this.

The NCC has already achieved a great deal. It established natural capital as the way of thinking about our natural environment, as a hard and rigorous concept, and not simply another slogan that can mean anything to anyone according to their vested interests. Crucially, the NCC proposed a 25 Year Environment Plan, and this has now been published, with broad political support.⁵ It remains to be seen whether it is fully implemented.

In the early years of the NCC I wrote Natural Capital: Valuing the Planet to provide an accessible account of what the concept means, how to measure it, and the broad policy implications that follow.⁶ Now we have the 25 Year Environment Plan, I want to set out the prize that this could offer, and what the environment could look like mid-century. Most of all I want to show why this is in our economic interests, why it will enhance our prosperity, why we can be green and more prosperous at the same time, and why we don’t have to accept as inevitable a world without our insects, our birds, our wild flowers and fungi, and our mammals, reptiles and aquatic life. We don’t have to have the poverty of a silent spring and of monotone landscapes.

That is what this book is all about. It is deliberately broad in scope and content, providing a framework and illustrating what sort of outcomes there might be, and most importantly showing how we can not only deliver on all these individual projects, but also how they can be combined in a great national effort. Most of the examples are already well known to naturalists and ecologists. Many very good people have come up with myriad plans for their own patches. The aim here is to think big, to think about Britain as a whole, and to consider how it can be made to work better for the next generation. I make no pretence of having the scientific expertise to fill in the details – that is for others much better qualified than me. What I do lay claim to is showing how this all works economically and how to implement it.

There are those who decry economic approaches to the environment; who claim that they overlook the beauty and spiritual values and intrinsic nature. They make a good point when the target is a narrow and crude cost–benefit analysis. But they are wrong in two key ways: prosperity is a broad, not a narrow, concept; and the value to people of nature and all its beauty is every bit as important as the health benefits of clean water. The conventional metric of economic success, Gross Domestic Product (GDP), is a pathetically poor measure of what we get out of nature; and if conservation and enhancing the environment does not make economic sense then the evidence from the last two centuries at least is that it will be neglected. Sadly, appealing to intrinsic nature and spiritual values has not worked so far.

LIST OF ABBREVIATIONS

AI, artificial intelligence

AONB, Area of Outstanding Natural Beauty

BBOWT, Berkshire, Buckinghamshire and Oxfordshire Wildlife Trust

BEIS, Department for Business, Energy and Industrial Strategy

BSE, bovine spongiform encephalopathy

CAP, Common Agricultural Policy

CFP, Common Fisheries Policy

CLA, Country Land and Business Association

DDT, dichlorodiphenyltrichloroethane

DEFRA, Department for Environment, Food and Rural Affairs

DWI, Drinking Water Inspectorate

EEC, European Economic Community

GDP, Gross Domestic Product

GM, genetically modified

GPS, global positioning system

HMIP, Her Majesty’s Inspectorate of Pollution

HS2, a planned high-speed railway project

NCC, Natural Capital Committee

NFU, National Farmers’ Union

NGO, non-governmental organisation

NRA, National Rivers Authority

OFWAT, Water Services Regulation Authority

ONS, Office for National Statistics

RSPB, Royal Society for the Protection of Birds

SEPA, Scottish Environment Protection Agency

SSSI, Site of Special Scientific Interest

TB, tuberculosis

Introduction
OUR NATURAL CAPITAL INHERITANCE

Britain’s natural environment is shaped by its past and its biodiversity. Few locations on the planet have had such a turbulent past visibly carved into the landscape. In the Hebrides, some of the oldest rock formations on the planet, dating back 3 billion years, have broken the backs of crofters for generations. The Carboniferous age left coal and limestone not only in the Pennines, but also in the pavements of our cities and the industrial landscape that coal enabled. In the Lake District, the glaciers’ ghosts are all around, while the South Downs show the ripples of the distant collision of Italy and the African tectonic plate into Europe.

The more recent physical severing of the land link to the European Continent, as the rising waters in the North Sea broke through between what is now Calais and Dover, cut off the migration of terrestrial species. The Irish Sea opened up, cutting Britain off from Ireland too. The snakes never made it to Ireland as the ice melted. In a smaller Britain (and even smaller Ireland) without many migratory replacements, it made it all the easier to exterminate some of Britain’s fauna. There are no bears, bison or wolves left. There is no land bridge to return on.

Being cut off has had its climatic effects too. Surrounded by sea, warmed by the Gulf Stream, Britain does not experience the deep freezes of Continental Europe. Its winters are comparatively mild. And its shorelines attract many winter visitors.

This is our inherited natural capital. It is what nature has endowed us with. Yet most of us are unaware of most of this for one very crucial reason. Our natural environment has been massively modified by humans over the last 8,000 years, and mostly in the last 200 years. Where once the Lewisian gneisses and the limestone and U-shaped glacial valleys would have been the hard constraints that people had to work with and around, now these hardly matter at all. We have so modified our world that, for many, nature appears hardly relevant. We may still rely on the land for agriculture, but agriculture is no longer the overwhelming driver of our economy. While, before 1800, the economy was mostly about farming and the trade in agricultural produce, with an empire built on food and crops, this is no longer the case. Farming now represents less than 1 per cent of GDP, and at least half of that is propped up by subsidies. A bad farming year no longer induces hardship and famine. In economic terms it just does not register. Fishing is now an even less consequential part of the economy, employing only a few thousand people.

Nature may not be man-made, but we as the ultimate eco-engineers increasingly shape it. Britain is a leading exemplar of the Anthropocene, a new geological age defined by human impact. There is nothing truly wild left. Much of the fauna has ingested plastic of one form or another, and the fashion for rewilding is best seen as just another form of eco-engineering, a switch from one man-made landscape to another. Wild, as a concept, has lost its practical meaning, even if its cultural power remains.

For all the angst this human transformation of nature causes environmentalists, it is not only a fact on the ground, it is also one that has proved remarkably successful from a human perspective. Over the last couple of centuries, we have broken out of thousands of years of virtually zero economic growth. The Industrial Revolution, and then the Age of Oil in the twentieth century, ushered in a wholly new historical experience. A cornucopia of new technologies raised the population out of poverty and into a material existence that has got better for each generation. Even two twentieth-century world wars could not dent the march of economic growth and prosperity. As nature declined, GDP kept going up.

For the bulk of the population, what was not to like about this? True, there might be fewer swallows and flycatchers, and the sound of the cuckoo might get rarer, but very many people have never seen or heard any of these anyway, and probably never will, except on a screen. They might watch the BBC’s Planet Earth and be sad that so much is being lost (and angry about the pollution), but in our democracy access to housing and health services counts for much more. When it comes to actual spending, the environment comes way down the list of priorities, and where spending does come into play, it has often been to pay farmers to do sometimes dubious things to what is left of nature. The planned high-speed railway project, HS2, has a budget of over £50 billion; the core annual budget for DEFRA (Department for Environment, Food and Rural Affairs) and its associated agencies – spent on foods and farming, rural interests, and the environment – is less than £3 billion. In other words, it would take more than 15 years of DEFRA environmental spending to exhaust the HS2 budget. Already, before even starting, HS2 has burnt through more than one year’s total DEFRA spending.¹

Faced with this onslaught, and the relative indifference of much of the population, those for whom nature really matters have been ploughing their own narrow furrow. Naturalists study in meticulous detail the declines of particular species and habitats. They band together to oppose building on sensitive sites, and they talk to each other in trusts, charities and campaign groups. It is largely a voluntary, amateur and charitable crusade, and it always has been. They feel under siege and try to hang on to what is left. They stand on the beach Canute-like and try to hold back the tide. They count the losses.

It has been a picture of comprehensive defeats, punctuated by the occasional success. These are often hugely symbolic, and where they focus on readily observable species, they garner a lot of support. Farmers may gripe about the impact on lambs, and grouse-shooters might complain about their precious game birds, but the recovery of the golden eagles, the reintroduction of sea eagles and red kites, and the sound of buzzards now over much more of the landscape are all hard-won victories for the small bands of environmental brothers and sisters.

The public can empathise with big birds of prey. They also see the merits of beavers and even lynx back in what passes as wilderness – the managed landscapes of Devon rivers and the Kielder Forest respectively. But what they do not see is the broader tide of destruction that tells a very different story – the insects that have gone; the soils that are depleted and soaked in chemicals; the rivers that are full of agricultural run-off; landscapes that are fragmented; wildlife corridors that are closed off; and the seas that are full of plastic.

In the agricultural battle against nature – to destroy everything that competes with the crops and livestock – agrichemical companies get better and better at doing their job. Now non-selective herbicides like glyphosate can kill off all the vegetation after crops have been harvested, ready for the next, and a host of genetically modified (GM) crops are specifically designed to be glyphosate-resistant. Neonicotinoids (new nicotine-like insecticides) are another chemical in the armoury, and the combination of glyphosate and neonicotinoids is now deemed by the farming lobby to be essential for maintaining crops and farm profitability, even as attempts to ban them gather momentum. Look closely at a crop of oilseed rape. Note the absence of insects and the brown, dead undergrowth. It is an example replicated for maize and other cereals, and is evident in the poverty of biodiversity in much ‘improved grassland’ too.

The technology is advancing at an ever-faster rate, as genetic engineering, precision applications and chemical advances get better at eliminating those ‘enemies of agriculture’. The collateral damage is not something that matters much: the crop is what yields the profit. The farmer does not pay for the consequences to the pollinators, for the river life impacted by the chemical run-off, and for the ‘silent spring’ predicted so long ago by Rachel Carson.² She focused on DDT (the insecticide dichlorodiphenyltrichloroethane), and her silence was about birds. She was right in her dire warnings, and on a scale she could not have imagined. It is a silence not just of birds, but insects, amphibians, reptiles and small mammals. The farmers’ response is predictable: if they are to be persuaded to pollute less, they must be paid to do so. The pollution impacts are other people’s problems.

Yet technology does not need to lead to an ever-greater destruction of nature. It is not the technology itself but some of its uses that is the problem. The tide of destruction is eating away at the very economic growth that has been bought partly at nature’s expense. This recognition is also the consequence of new technologies. The extent of micro-plastics pollution and its consequences for marine life is now beginning to be understood because we can measure it. We have much better technologies to measure air quality, and medical advances allow us to see the link between the pollutants we put in the atmosphere and people dying from the consequences of inhaling dirty air. Just as it took several decades to prove the link between tobacco and lung cancer, so it has taken these new technologies to pinpoint the scale of the impacts on us of the destruction of nature. The impacts on mental health of a loss of nature are now becoming evident and measurable too.

In the past, diffuse pollution was often hard to pin on any one polluter. That is no longer the case. We can increasingly see down to the smallest areas who is doing what. The anonymity of the polluters that allowed them to deny specific responsibility is now being gradually blown away by GPS drones and other high-resolution mapping. While we might forgive those who know not what they are doing, it is much harder to forgive them when we and they do know. And they (the developers, the waste criminals, the packaging companies, manufacturers, service industries and farmers) do now know.

Over this century these impacts will play out and undermine our prosperity unless we actively head them off. The trade-off between more economic growth and less nature that has been the hallmark of human history so far is no longer benign. Destroying nature is beginning to eat into economic progress. Climate change is the obvious example, but in hogging the limelight it has eclipsed the myriad other impacts. The costs of polluted waterways, of polluted seas, and of soil degradation, the loss of pollinators and the impacts on humanity of the loss of nature to anchor our lives by, relentlessly keep going up. One incremental loss after another may eventually trigger systemic consequences as key thresholds are crossed. As we create an increasingly brown world, we create a less prosperous one too.

Among the many reasons why nature matters, one is that it is part of the economy. It is a vital element of the resources that the economy allocates, and the economy can no longer get by with less and less of it. Technology brings with it an increased capacity for destruction, but it also brings routes to a better and greener world – and a more prosperous one too. We can have a greener and more prosperous country. Conserving (and enhancing) nature increases our prosperity. Economic growth, properly measured, is driven by developing human ingenuity, placing in our hands technological tools that previous generations lacked. It need not be in conflict with the environment. We can be green and prosperous.

There is no lack of ideas and projects to make this transition to a greener and more prosperous state. At the national level we know what to do. The river catchments need integrated management, reducing costs at the same time as improving outcomes. The way forward in agriculture is pretty clear too. Just stopping the perverse subsidies and enforcing the law would be a good start. Making polluters pay, and focusing subsidies on the public rather than private goods would greatly improve economic efficiency and transform the agricultural landscape, capture and retain carbon in the soils, and protect the pollinators. Enhancing rather than encroaching on the Green Belt would bring nature next to people, with big health and leisure benefits. Ensuring that there is net environmental gain from development would transform the impacts of new housing. Landscape-level wildlife corridors would give nature a chance to recover.³ The railway lines, road verges and canal paths are obvious ways to build green corridors that millions of people can enjoy. Getting serious about Marine Protected Areas, including prohibiting fishing in them, would allow fish to bounce back and provide more sustainable stocks. Turning the coastal paths around Britain into major wildlife corridors would be good for people, tourism and nature.

At the local level, there is a cornucopia of economic and environmental opportunities. Initiatives here are often specific and highly focused, including restoring village greens; protecting and enhancing urban parks and green spaces; planting trees along the streets; getting children to participate in local environmental projects; enhancing the biodiversity of churchyards; cleaning up the litter on beaches; taking responsibility for local footpaths; and planting wild flowers in every garden.

In between the local and the national, the environmental organisations all have a checklist of preferred measures, from restoring particular habitats, to making road verges and railway lines havens for nature, to bringing back beavers. The general bodies have lots of great ideas for plants, birds and bugs. The national bodies, like the Wildlife Trusts, have plans for key habitats, from the Brecklands and managing the grazing now that the rabbit populations have collapsed,⁴ to restoring wetlands in the Upper Thames like Otmoor by keeping the River Ray wetter,⁵ creating and enhancing green spaces in cities, and managing and enhancing woodlands.

All of this makes very good economic sense. It can all be done. This is not only a prize worth fighting for because nature matters in its own right, but represents good mainstream economic policy. We can stop doing stupid things like wasting £2 billion per year on paying farmers to own land;⁶ wasting money on cleaning up water for drinking, which should not have been polluted in the first place; wasting money on creating hard flood defences when natural flood management can be much cheaper; and wasting money on cutting down urban trees, as in Sheffield. All of this money can be much better spent on actually enhancing nature. This is why we should do it – because we should care about nature, and because we will collectively be better off as a result.

Part one of this book sets out these great opportunities – the prize. The prize is what nature could look like by the middle of this century. It is all about what we could have, what a greener Britain could look, smell and sound like. It identifies the value of halting the declines and moving towards a richer natural environment, and explains how we can all be more prosperous as a result.

Set against this great green prize is the brown alternative: what happens if we don’t seize the opportunities, and what happens if we allow the destruction of nature to continue. The prize of sustainable economic growth is not the same thing as the fool’s gold of GDP. It is all about harnessing technology and human ingenuity to make us all better off, by maintaining the natural environment and seizing the opportunities to get much more out of nature. The brown alternative of business-as-usual is literally a waste of money. It is also ugly and often nasty, as beauty is translated into lifeless monoculture fields and bleak housing estates. The sounds and sights of nature are diminished, replaced by ever-more noise and vistas of the man-made. The scale of the destruction of nature coming down the track if we do nothing should terrify everyone.

Part two is the practical part. It is all about how to secure the prize, what can be achieved, and why it is sensible economics to do so. Pragmatically, it involves five key areas of the natural environment: the river catchments (chapter 3); the agricultural land (chapter 4); the uplands (chapter 5); the coasts (chapter 6); and towns and cities (chapter 7). For each you are asked to imagine what an enhanced nature might look, sound and feel like. For each a practical framework to achieve the greener outcomes is provided, and why we will be more prosperous as a result is explained. To whet your appetite, and to move from the wonders of the imagination to reality, in every one of these areas a few practical examples of initiatives and projects already under way, and potential new ones, are identified.

It is all about river catchment system operators and ensuring the polluter and not the polluted pays; about a new agricultural policy based on public money for public goods, not perverse subsidies for owning land; protecting and enhancing the uplands for their beauty, health and leisure, and the biodiversity, and again not damaging them through perverse subsidies; opening up the coasts and coastal fringes for their full public potential, and stopping destructive fishing practices, most importantly in Marine Protected Areas; and greening towns and cities with trees, parks and Green Belts to improve air quality, childhood experiences, and health and leisure. What is not to like about this, not just from a conservationist’s perspective, but also for the economic prosperity of Britain?

Part three turns to the money – how to pay for it all. Chapter 8 considers public goods, why they matter, why the market won’t deliver them, and how they should be paid for. Chapter 9 looks at the polluter-pays principle, compensation and net environmental gain, and perverse subsidies. The place to start is with the sheer inefficiencies of current policies. An efficient economy is one that internalises all the costs and benefits of economic activities into prices and decision-making. In an efficient economy pollution is charged: it is inefficient not to charge for pollution, resulting in a lower level of economic prosperity. This is both 101 economics, and rarely followed. Not even carbon has a proper price yet. Making polluters pay is the single most radical and effective policy that could be adopted, for economic prosperity and for the environment. The British countryside would be radically different, and radically less polluted, were this simple economic principle adopted. It would not cost anything to the economy in aggregate, and at the same time it would yield lots of revenue, some of which could go to repairing past damage and enhancing our natural environment.

Instead of demanding more public expenditure, conservationists would be better advised to home in on this fundamental economic principle. Why should it be any more acceptable to pollute than to steal? Both take something from others that they do not pay for. Polluters steal people’s health and they force the polluted to pay for what has been done to them. Expecting more public expenditure is something that might motivate protests and campaigns, but most conservationists know that if they wait for the Treasury to open its coffers they will be disappointed. While money is needed, getting to a more efficient baseline is an urgent necessity, making us all better off.

The converse of making polluters pay is to get rid of perverse subsidies. More than £3 billion is spent annually on subsidising Britain’s farmers, £2 billion of which goes on paying them to own land. This absurd policy has been perverse not only for the natural environment but for the farmers themselves, inflating land prices. It came about as a result of trying to get away from the even more absurd consequences of subsidising the prices of agricultural products, resulting in the infamous European wine lakes and butter mountains, and the intensive sheep grazing that has done so much damage to the uplands. Getting rid of perverse subsidies would save a lot of money. It could be better spent. But even if it were just withdrawn, Britain would be greener.

Next comes the fraught subject of compensation for damage to the environment. While there are conservationists who believe that there should be no damage at all, the reality is that there will be. Faced with a population increasing by around 10 million by mid-century, and with more than 200,000 new houses per year for over a decade, more land will be concreted over. Add in the new roads, railways, and energy generation and networks to service all these extra people and the wider growing economy, and damage is inevitable.

Can this damage be squared with enhancing the natural environment? Only if there is compensation over and above the damage to the natural environment elsewhere. This is the net environmental gain principle: any damage must result in not just offsetting it, but by a positive margin. The positive margin is the precautionary principle in action.

Money is currently spent in silos, notably the agricultural subsidies. Winning the prize, and making sure we hang on to it, requires cementing the money into a comprehensive and integrated framework. Chapter 10 sets out how to do this within a Nature Fund. This acts a bit like sovereign wealth funds do for oil- and gas-producing countries. It should include the economic rents from these non-renewable activities like North Sea oil and gas production, mirroring other sovereign wealth funds, but it can also bring together the monies from pollution taxes and charges, from subsidies directed towards public goods and the net gain payments. Crucially it would be for nature, not general public spending.

The net gain principle set alongside the polluter-pays principle together ensure that there is enough money to pay for an enhanced natural environment. Add the money previously spent on perverse subsidies, instead going to environmental public goods, and the numbers stack up. We can have a greener and more prosperous Britain, without extra public expenditure.

A Nature Fund would need to be protected from the host of vested interests and from political opportunism. These interests are not just those opposed to the conservation of nature. They include nature organisations, which are notoriously fragmented and quarrelsome. With a pot of money, the Nature Fund will become a target for each and every interest to look after its own, whether specific species or specific habitats and locations. Its constitution matters, as do the rules of engagement. A Nature Fund should encourage cooperation and coordination for the prize as a whole.

The way to do this is to bring the opportunities together into an agreed practical plan to make it happen – a plan of how to integrate the myriad opportunities into coherent actions, and the necessary institutions to deliver this wonderful opportunity. It is about the full delivery, in spirit and letter, of the 25 Year Environment Plan published in 2018.⁷ Some will say that this is too radical, but the real radicalism is in doing nothing, in allowing the business-as-usual to continue. This radically worsens the opportunities of the next generation, who will not only be deprived of swallows and flycatchers but, in the process of the continued destruction of nature, find the basic necessities of their lives increasingly compromised.

The 25 Year Environment Plan needs to integrate the principles behind it into the fabric of the economy and government. These are the two aims of the earlier 2011 White paper, ‘The Natural Choice’:⁸ putting the environment at the core of the economy; and leaving the natural environment in a better state for the next generation. Although much may be achieved immediately and a number of reforms will help us along this path, to stand the test of economic crises and recessions and the sheer power of the hostile lobbyists, there needs to be an overarching legal and constitutional framework. As with climate change, politicians are good at the rhetoric, and they may well mean what they say, but permanently delivering it requires something more. The 2008 Climate Change Act changed the game. It is very hard to get out of its targets and the carbon budgets. We need something similar, a proper Nature Act that enshrines the principles in the 2011 White Paper and the 25 Year Environment Plan.

There is a choice: we can impoverish ourselves by continuing down the current path, or we can have a greener and more prosperous land, and one that is pleasanter too. The book concludes with this choice.

PART ONE

1
THE PRIZE

Imagine what our natural environment could look like in 25 years. Imagine bright colourful hay meadows full of wild flowers, birdsong and butterflies. Imagine cities with green trees along the streets, green parks and green Green Belts. Imagine the sounds of uplands, of golden plovers and curlews. Imagine beaches without plastic, and the loud noise of winter waders in the estuaries and marshes. Imagine wildlife corridors all around the coastline and across the land and along the rivers, roads, railways and canals. Imagine a marine world full once again of fish and free from the harrowing of the seabed by trawling. Imagine colour and beauty restored to the landscape. Wouldn’t it be wonderful?

This prize is not just a dream. It is perfectly practical and achievable, within our reach, and it would greatly enhance our lives and our economy. We don’t have to ‘go back to nature’, become austere and abandon capitalism. None of that is likely to happen anyway. Instead we need to embrace the most important type of capital: natural capital – the stuff nature gives us for free. We would be much more prosperous as a result. To make this possible, stand back and think big.

The prize comprises two parts: holding the line against further deterioration of existing natural capital; and creating and enhancing more of it. That is what leaving the environment in a better state for the next generation means. Not to go down this path is to court a significant loss of prosperity and make the next generation worse off. The question is just how much worse off. This chapter is about that prize; the next is about what happens if we don’t halt the destruction.

No more declines

The natural capital that really matters is the renewables – the stuff that nature keeps on giving us for free for ever, provided we don’t deplete it below a threshold so it cannot continue to deliver its free bounty. Nature at threshold risk is the stuff of red lists and endangered species, and some of it is well known. To hold the line means that the sounds of cuckoos and turtle doves and nightingales and corncrakes are going to continue – for ever. But it also means protecting those renewables that are less obvious to the casual eye, and those assets we take for granted but that are actually in considerable danger. It is about the things we no longer see so often, like insects and butterflies, and about the once-common that is slipping from our grasp. How many people realise that the rabbits, which were ubiquitous, have now almost vanished from some areas? That the hares may follow? And how many have failed to notice that the swallows are harder to sight now? It means fertile and productive soils, lots of pollinators, clean water and clean air, and natural flood defences too. These rely on a host of creatures at the more microscopic level, and beneath the soils and under water.

The focus is often on the more iconic species at risk, since these are usually easy to measure and easy to design conservation strategies for. In almost every case, what is required is a habitat within which they can thrive, and an end to persecution. Species protection is all about these underlying critical natural infrastructures, which are every bit as important as man-made infrastructures in energy and transport. Although it might not actually matter greatly in the scheme of things if there are no bitterns or ospreys, it would matter if the reed bed ecosystems are gone and there is more eutrophication of rivers and lakes. Protecting particular species on the brink of their thresholds is typically good conservation generally, and the result is all sorts of other species benefits.¹

Holding the line is not straightforward for the obvious reason that we are going backwards. Simply stopping more direct damage would not stabilise the natural environment. It is clearly on a downward path, notwithstanding a host of projects to turn things around in specific areas and for specific species. So much damage has been done over the last half-century that resilience is low. Even where there are attempts to halt the declines, as in the case of river quality, the cumulative damage means the underlying conditions could continue to worsen. In the case of rivers, the fly life continues to decline and groundwater pollution will worsen even if the polluting stops now. It is not enough to cease further damage. We need to stop the slide through remedial actions – the natural capital maintenance we should have done long ago.

There are various ways of going about this. We could start at the species end or we could start at the habitat and ecosystem end. In practice it will be both. This book looks in detail at each of the main habitats – the river catchments, the landscapes and agriculture, the uplands, the coasts and the urban countryside. But first let’s just take a preliminary look at each to get a handle on the overall prize.

Stopping the environmental damage in river catchments starts with the chemical inputs into rivers and the silting from soil erosion. As urban centres developed and the Industrial Revolution got going, rivers were treated as sewers. The Great Stink of London in July and August 1858 is but one example of what was going on in all the great rivers that had the misfortune to flow through towns and cities. The Taff in Wales and the Mersey in northwest England died because of mining and industrial effluent.

Both of these forms of gross pollution have been tackled at source, but sewage still ends up in rivers and industrial pollution remains in some pockets. The river sediments contain lots of heavy metals, and many estuaries – like the Thames – have serious residuals. Dredging to develop the new Thames Gateway container port revealed its scale. Halting the decline means not only stopping further pollution, but also dealing with the continued and long-lasting damage it has caused. We have to deal with not only our mess, but that of previous generations too.

When it comes to sewerage, existing systems continue to overflow in heavy rain through the storm overflows. Stopping the declines means increasing the capacity to contain sewage and prevent overflows. The Thames Tideway aims to do just that, carrying it all to the east of London to the Beckton Sewage Treatment Works. What happens there continues to be a problem, and the estuary remains the final repository. For many sewerage works, it means going down the natural capital route with reed beds and other natural options, and dealing with the sewage at source too. This is both cost-reducing, so our water bills don’t go up, and it creates great habitats for birds, insects, amphibians and aquatic life. The phosphates the water-treatment works pump out into the rivers need to be reduced, partly by stopping them at source from getting into the river in the first place, and partly by better treatment.

The decline of heavy industry and the development of sewerage systems have put a stop to some of the grossest pollution, but river pollution is a moving target. Since the middle of the twentieth century, intensive and agrichemical agriculture has done immense damage. Stopping the further declines here means the creation of significant buffers between the rivers and the arable fields, limiting fertilisers near rivers, putting an end to maize and cereal crops close to rivers to stop the silting, and seriously controlling the application of pesticides and herbicides. It means stopping the treatment of sheep with chemicals near rivers upstream, and it means strict controls of slurry storage to prevent it ending up in the rivers. All are economically good things to do anyway, and this prize will make all our rivers assets rather than liabilities.

Agricultural impacts on the land continue the degradation of the environment more generally, perversely incentivised by the subsidy regime. The decline in insect life is one of the major impacts, and this has contributed to the falling populations of farmland birds. The soils are often in a poor state and are in many areas deteriorating, and this is bad for farming productivity. Hedgerows and field boundaries do not look after themselves. Doing nothing allows the degradation to go on. Stopping the further damage in agriculture requires quite radical surgery. Fortunately, in such heavily subsidised industries the costs of changing practices are low, and especially so when compared with the benefits. Arguably, these improvements can be made and less public money can be spent – much more for less. The prize is a healthier and more vibrant farmed landscape at lower cost, and hence we will be doubly better off as a result.

Because they are harder to plough up, because the weather is less benign to farming, and because the soils are poorer and thinner, the uplands often remain the last bastions of once-widespread wildlife. Once-common lowland birds, like red kites and even house sparrows, have been pushed back to the uplands, back behind the natural constraints that limit intensive farming. Unfortunately, even though upland agriculture is barely, if at all, economic, it has been environmentally damaging. This can and has to stop. Intensive sheep grazing has seriously damaged much of the remaining habitats, stripping the vegetation and exposing peat to the elements. Stopping further damage means reducing sheep intensity, as well as preventing slurry, sheep-dip and other pollutants from entering the rivers. Because the sheep are of very little economic value, the costs of this surgery are negligible. Sheep sale value minus all the various subsidies equals zero, or even less than zero. There is economic gain to be made here.

Stopping the declines along our coasts again comes back in part to agriculture. Most environmental things do. It requires dealing with the run-off of fertilisers, phosphates, pesticides and herbicides, and also dealing with the declines caused by overfishing, by fishing that damages the seabed, and by a wide range of pollution. As with farming, subsidies and especially regulation are an important part of the current system, and the economic value of Britain’s fishing catch, net of supports, is very low. In many areas the obvious answer is simply to ban fishing in exclusion zones. This will mean more fish and a larger sustainable catch than that provided in a business-as-usual scenario. In other areas it needs sustainable fishing plans, which are properly enforced, so that stocks can recover.

In the emerging aquaculture industries, the initial ‘wild west’ of the salmon farms has had serious environmental costs that the producers first denied, and still neither fully pay for nor take sufficient mitigating action against. Indeed, in the west of Scotland this economically inefficient damage is accelerating. Stopping the further damage means sustainable regulations and making the polluters pay. This is all the more important as aquaculture in general is growing and can make a greater contribution to food production over the coming decades, provided the environmental impacts are taken fully into account.

In the urban areas, halting the declines means stopping the further erosion and loss of green spaces, and the chipping-away and degradation of public parks and gardens. It means preventing further loss of urban trees, most notoriously exemplified by Sheffield City Council cutting down thousands of mature trees in the name of utility works. The lack of a full statutory duty to preserve urban green spaces is a serious threat, as councils struggle to pay for social care and other increasing demands on their budgets. Green streets and green parks have very large economic benefits.

What all these measures, which will be elaborated on in subsequent chapters, have in common is that they are all ways of increasing prosperity immediately. They are all sensible economic policies, as well as making a better and greener world. Improving rivers improves our drinking water, and stopping further pollution reduces our water bills since less treatment is needed. Indeed, so great are the economic benefits that some water companies are already paying farmers not to pollute, and to keep the ground covered with crops and grass over winter. Sewage in the river from overflows directly affects people’s welfare. It is not only a health hazard, it deters people from the riverbanks, from exercise and therefore from the health and well-being benefits.

Measures to clean up agricultural pollution would result in seriously large economic gains. Much of the pollution is encouraged and paid for by us as taxpayers. It is heavily subsidised and, as we shall see in chapter 4, reforming agricultural policies to ensure that subsidies are only for the provision of public goods is sound economics. When it comes to the uplands, the subsidy element becomes overwhelming. We pay taxes to subsidise the overgrazing of sheep that are simply not economic. We even subsidise sheep that get live-exported to Europe, with all the animal welfare consequences that such transportation brings. Stopping the damage by reducing grazing intensity would increase the economic value of the uplands, and if the subsidies went towards public goods instead, the economic prosperity of the hill farmers would improve. They are trapped in a system that keeps many of them both poor and marginal.

Stopping overfishing, particularly of shellfish, around our coasts improves the value of the fisheries, and helps to solve the classic free-rider problem that the ‘tragedy of the commons’ reflects.² It will increase fish stocks generally inside and outside the protected areas. Unregulated fishing is a disaster for the industry and the public and, as with the upland farmers, inshore-water fishers do not come off well. They are at the economic margins. The economic prosperity of coastal communities is much more about services, tourism and amenities, and these in turn improve the health of the population. But even where it is about catching fish, protected areas excluding fishing is in their interests.

Stopping the environmental decline in cities is an economic no-brainer. The health benefits of access to green space are well documented. It bears directly on mental health, on the quality of the air and hence on limiting respiratory diseases, and it increases physical activity and therefore helps to fight obesity. The costs of these diseases and the bad health outcomes are considerable; the costs of holding on to green spaces is trivial in comparison.

No more declines means more economic value – now. In narrow terms, it is worth achieving. Prosperity goes up if we halt the damage. Yet it is not going to happen on its own. The reason why we can go on depleting the natural environment is that there is little pressure to pay for its capital maintenance. Where physical infrastructure is concerned, it is obvious that failure to carry out the necessary maintenance is economically costly. The potholes in the roads not only cause damage to cars and bikes, they undermine the roads themselves. Eventually they have to be fixed, and because the early damage is often left unchecked, the eventual repair costs escalate. Similar issues arise with the maintenance of water pipes, sewage-treatment works, railway lines and signalling, and electricity distribution cables.

Exactly the same economic logic applies to the natural environment. Failure to maintain natural capital stores up problems for the future, and stores up extra costs too. We can pretend, like the company that allows its buildings and machines to deteriorate and reports inflated profits as a result, that we can spend the gross surpluses, when economics tells us we should do our accounting properly, and set aside the costs of the maintenance. It is simple: not to do proper capital maintenance is to live beyond our means, and store up trouble, leading to lower living standards for the future. This is precisely what we have been doing: living off nature’s bounty without recognising the thresholds and safe limits.

It works for a while. Sometimes it works for a long time. But eventually it catches up with us. The farmers who fail to take care of their soils will run into trouble eventually. The Fens will one day cease to deliver,³ just as swathes of the badlands in the USA did in the 1930s, and China’s expanding deserts are today. The loss of pollinators will cost farmers dear, and the loss of the urban parks is already having a detrimental impact on health. Just because we do not account for these costs properly does not mean they are going to go away.

The first part of the prize – no more declines – is best seen as basic housekeeping. It will save us from a lot of costs later and provide natural capital to future generations that is at least as good as we inherited ourselves. This book sets out the sorts of measures necessary to achieve this – all practical and economic.

Enhancements

The gains from stopping the declines pale almost into insignificance when compared with the gains from enhancing the natural environment – not just holding the line, but improving our ecosystems across the board. This is the real prize for the next generation.

If you ask what the main physical infrastructure networks of Britain will look like in 2050, in every case the answer is both different and much enhanced compared with now. Take the electricity system. By 2050 it will be digitalised and decentralised, and linked into the transport system and electric cars. It will be transformed from the passive, centrally controlled electricity grid of today. Take communications. By 2050 it will all be fibre; we can expect to have massively enhanced 5G mobile and fibre networks. Train networks will be more integrated at the international level, and there may be High Speed 2 (HS2), Crossrail 2 and full electrification, whether overhead or with batteries. Roads will be intelligent digital highways. We have a National Infrastructure Commission to look into all this and come up with a 30-year plan to present to each parliament.⁴

When it comes to the natural environment – the critical infrastructure on which all else depends – this sort of ambition is largely absent. There are two possible reasons. First, it might be widely assumed that there is not much economic gain from an ambitious transformation. Second, the ambition itself might be thought to be beyond our capabilities. People have lowered their sights: they simply expect it all to get worse, and at best not to get much worse.

Both of these are wrong. The economic gains from enhancing the natural infrastructure are considerable, and may be greater than some of those projected for physical infrastructures. A major enhancement is well within our grasp, and the costs are not that great in getting there, especially when compared with the costs of some of the physical infrastructure ambitions described above. If, for example, HS2 costs £50 billion and Crossrail 2, say, £25 billion, think what £75 billion of environmental enhancements might look like in comparison. Add in some all-too-predictable cost overruns and these two projects will cost over £100 billion. It is unlikely that the gains from the environmental enhancements would be less than those claimed for HS2 and Crossrail. It is not just a failure of imagination that holds us back, but also a basic failure to do the economics properly.

Part three of this book tackles the economics head-on, showing why the benefits exceed the costs, and in many cases way beyond the narrow margin for HS2. The trick turns out to be all about how to measure economic prosperity properly. Once the costs are seen to be less than the benefits, the funding and financial frameworks can and should fall into place.

But before we get into the economics, let’s raise our eyes to the prize itself: what our natural environment could look like in 2050. As with the measures necessary to halt the declines, more of the detail is provided in subsequent chapters; here we take a high-level look at the opportunities.

There are two ways of going about this exercise. The first is to focus on the outputs. This looks at what we can expect to get out of the natural environment in the future. The second is to look at the underlying state of the assets, and the opportunities these assets provide for future generations. The first is very much about utility and hence is utilitarian; the second is about the capabilities and choices people will have about how they choose to live their lives. It is therefore a distinction between direct and narrow benefits and the broader opportunities natural capital offers to future generations.

The two are of course related. You need the natural assets to get the utility; the ecosystem services and the natural assets that are going to be given priority are those that have the greatest direct benefit to people. The differences come in the practicalities as much as the philosophy. Natural assets come in systems, not discrete lumps, and hence mapping the outputs onto the assets is far from straightforward.

Let’s take a look at the two approaches and see how the prize might be defined. Taking the outputs approach, there are some obvious direct-benefit prizes. In 2050 we can have much cleaner air. Children can grow up in cities without clogging up their lungs with particulates. By 2050 the air should be ‘clean’. Drinking water could be of better quality, drawn from cleaner rivers and aquifers. There should be increasingly diverse plant and animal populations. Wildlife should be thriving. People should get more out of nature, and benefit from landscapes that are more beautiful. These are all ambitions included in the 25 Year Environment Plan.⁵

The great advantage of starting with the high-level outputs is that they are measurable. The content of air in different locations can be directly measured. The health outcomes can be measured too. The quality of drinking water is measured all the time already, and we can measure whether it is getting better. The number and diversity of plants and animals can be measured too. How many people spend how much time doing what in nature is measurable. We can also measure mental health and obesity and relate all these to the time spent with and experience of nature (or the lack of it).

These outputs are every bit as measurable as the time saved by HS2 or Crossrail; by the speed of internet access, and the use time people get out of the internet; by the impacts on carbon emissions of renewable energy technologies; by the convenience and use of electric car charging and other outputs from physical infrastructures. Natural capital infrastructure is on an empirical par with physical infrastructure.

The fact that these things can be measured gives the 25 Year Environment Plan traction. Governments can be held to account for identified failures. There may be many environmentalists who claim that we cannot measure the beauty and wonder of nature, or the spiritual values and so on. They are right. But the trouble is that this does not get us very far. The Treasury can easily wriggle its way out of the capital maintenance and investment in the enhancements. Whether the benefits of the prize can all be measured or not, the fact remains that the costs can, so there is no avoiding the question of how much should be spent on the various competing outcomes and ends. There is a good reason why the Treasury thinks in numbers.

In narrow utility terms the value of these prizes can be assessed and compared with the value from investing in other infrastructures in the economy. Just as the value of HS2 depends on the other infrastructures that connect with it and support it, so too on the environmental side. HS2 will not work unless other bits of the road, railway and airport transport networks interconnect with it, and unless it has fast broadband fibre to facilitate its operations. Similarly, clean water depends on what happens in river catchments and in agriculture. The specific projects get their economic rationale from the coexistence and interaction of the rest of the networks. Ultimately, none of them works unless there is a natural environment to support them.

This creates a big problem for the application of crude cost–benefit analysis. Take HS2. It makes little sense to calculate the costs and benefits of the link between Birmingham and London without including the rest of the high-speed rail network to the north. Similarly, whether or not HS2 is connected to HS1, and hence the main European cities, makes a big difference to the potential benefits in the cost–benefit calculation.⁶

Carried across to the natural environment, these problems arise because the environment comes in ecosystems. Everything is connected to everything else. Hence the outputs depend on the overall environmental context. This means that achieving these headline outputs in 2050 will require attention to be paid directly to the underlying environmental infrastructures – to the state of the catchments, the farmed land, the uplands, the coasts and the urban countrysides. Even taking these separately is a questionable heuristic, since the catchments depend on the uplands and the farmed land, and the costs depend on what happens in the rivers and the estuary and coastal towns and cities.

We have to start somewhere, and the pragmatic approach is to divide things up into our five categories, while always accepting that it is going to be at best a roughly right answer.

The attention to the systems leads into the second perspective, starting with the natural capital assets, and setting the prize as having these in much better shape by 2050, rather than trying to calculate the utilities of each bit. Natural capital is about making sure that the next generation has these assets, so they can choose how they want to live. They can do their own utility calculations: it is not for us to prejudge these.

Taking each of our five categories in turn, again as a preview of what follows in the book, the catchments natural capital in 2050 could be much enhanced by looking to natural capital solutions to both river quality and flood prevention. Many rivers are a sad shadow of what they were before they were tamed. Since the Middle Ages and sometimes even earlier, they have been straightened out and controlled for energy through weirs and hard physical flood barriers.⁷ The results are not only far from pretty, they are often inefficient. Imagine a river catchment where the upstream is allowed to meander, creating oxbow lakes and slowing down its flows. Imagine trees taking up more of the shock of heavy rain. Imagine reinstating flood meadows to hold the water in winter.

These natural capital measures would restore and rebuild what has been lost, improve flood defences and avoid the costs of more hard concrete. This is something that can start now. The Cumbria catchment has been designated as a pioneer for the natural capital approach, and has already identified lots of opportunities. The new concrete canal being built around Oxford might not be needed, or could be constructed at a reduced scale, were money instead spent upstream on trees, meadows and better land management.⁸

Natural capital approaches would greatly contribute to biodiversity outcomes, and these in turn would open up additional health and recreational benefits to people. Imagine the wonders that restored water meadows might bring in snake’s head fritillaries, cowslips, barn owns, curlews, redshanks and lapwings. All of this is possible not only in the Upper Thames, but throughout our river catchments, and it is much more cost-effective even in the narrow flood defence context. The Severn lends itself to a similar approach, as does the Ouse above Pickering.⁹ The more pertinent question is whether there are any major river catchments where it would not be a sensible approach to prefer major enhancements to the natural environment at lower cost and with less emphasis on the alternative hard solutions.

Consider the cost–benefit comparison between all that concrete and natural capital approaches. The reintroduction of beavers could help slow down flows. Imagine if all of the main river catchments had thriving beaver populations in their upper river stretches. Imagine rivers as green corridors through towns and cities.

Turning to the broader landscape and agriculture, imagine if the monochrome fields were replaced with an enhanced patchwork quilt of many colours. Imagine if the harsh vivid green of ‘improved grassland’ were replaced by the complexity of shades of green that unimproved land still hangs on to. Imagine if rye grass were not the only species, but rather that sweet vernal grass, Yorkshire fog, crested dogstail and other grasses were once again peppered across our landscape. Imagine if the countryside were colourful again, and the simple delights this world has were set against the stresses of everyday life. Imagine if the hedgerows were put back, and the dry-stone walls repaired. Imagine if beauty was brought back into the landscape – and most of the landscape, not just the protected areas.

To do this requires a wholesale reconfiguration of agricultural policy. The vested interests would no doubt protest that all of the above is just a romantic ideal, and a dangerous one at that. They would point to the need to produce food, and even argue that food security is of overriding importance. They would want to claim that this ideal is not remotely realistic. But they would be wrong. For what the vested interests cannot claim is that current agricultural policy is remotely economic, or even that it focuses on the core food products or provides for food security. The fact is that it isn’t economic. It is chronically inefficient, greatly distorting production. It is hard to think how the economic costs of the current agricultural systems could be more adverse. The vested interests would probably not want to admit that the net economic value of agriculture as it is – the agriculture that has produced the monochrome landscapes, destroyed insect life and led to great declines of farmland birds – is in fact approximately zero.

In chapter 4 the startling arithmetic will be set out, and it is this that needs to be compared with the prize of the colourful, beautiful, vibrant and noisy landscape we could have instead, with all the economic benefits it would bring.

The prize would have pay-offs beyond the landscape and biodiversity. The river catchments cannot live up to their potential, and hence their part of the prize, without dealing with the agricultural pollution and silt. The coasts cannot escape the plumes of algae from river mouths. That is why it all keeps coming back to agriculture: it is the key to an enhanced environment. Without a radical change the ambitions will be disappointed. The fact that it makes economic sense to do this brings the prize within our grasp.

Of all the natural capital that agriculture relies upon, soil plays a central role. Even holding the line here is a big ask. The Fenlands will carry on losing soil for a long time to come.¹⁰ The prize is a healthy soil. Soil, like many marine habitats, may be largely out of sight, but it contains a mass of biodiversity, and it is the foundation of the food chains of almost everything else. The bacteria and fungi make plant growth possible. It harbours invertebrates and insect larvae. The prize of healthy soil is an economic necessity if farming is to continue, and if the broader biodiversity is to thrive. Even in the narrow context of carbon emissions the soil is critical. Improving the carbon content, which farmers have been depleting, increases the soil’s ability to support crops and helps in the battle against climate change. Economically it is yet another no-brainer.

Many of our uplands are a shadow of what they once were. To the untutored eye the rolling hills signify ‘wildness’ and ‘raw nature’ – they are anything but. These are managed landscapes, and they have been managed with specific interests in mind. These are mainly extensive agriculture and game in a mix of small marginal farms and large private estates. Our uplands are overgrazed by sheep and manicured for the shooting fraternity. Imagine if the heather moors were managed not just for grouse and deer, but also for the wider public benefit. Imagine if the hen harriers were not persecuted, so people could watch the male bird pass its prey in mid-air to the female, and watch as the birds hunt low over the land. Imagine if the wild flowers were given a chance by much reducing the uneconomic sheep densities. Imagine if deciduous trees thrived alongside the Scots pines and the larches, and dark and dense timber forests were diversified.

The costs of transforming our uplands are even lower than for the lowlands. Reducing grazing densities saves money. For the deer-stalking, the grouse and pheasant shoots, the problems are rather different. They are about incorporating the costs these activities give rise to, reducing the deer numbers and the destruction they cause, regulating the deposits of lead shot and the poor management of feed for the game birds, and enforcing the law. As so often happens when businesses do not pay for the pollution and environmental damage they cause, they get over-extended. Making the polluters pay would improve the management of the uplands. Making those who break the law face the consequences and pay the proper costs for crimes would be a big win for the economy and the overall economic prosperity of the uplands.

When it comes to the coasts, we are already on the way to opening up a path around the whole of England. Imagine what will have been achieved when this is finally in place. Imagine the economic gains it will bring to those whose health and well-being benefit, and to the tourist industry (which is much more economically significant than agriculture and without large subsidies). Imagine if the beaches were cleared of all their plastic rubbish; if the fish and the seabirds had enough to feed on; if fishing were managed for the long term; and if the cold-water corals and the underwater wonders were allowed to return to where they were before fish farms polluted them and trawling and dredging scoured them away. Imagine if there were no longer any need for Surfers Against Sewage, and it was no longer possible to see the algae plume from the Thames right out into the North Sea (joining the plume from the Rhine).

It might even be possible to make an economic merit out of cleaning up the beaches. It could be a form of national service, or a task taken on by local communities and local schools. They could take ownership of keeping their patch of the coastline clean, and in the process gain from the community involvement and mental health benefits – as well as the exercise it would involve. Many economic activities are outside the formal measured GDP, but they matter for prosperity.

Finally, imagine what our towns and cities could be like if we invested in their green infrastructure. Imagine how much healthier and more vibrant they might be. Imagine if every child had access to a green space within a few hundred metres of their home. Imagine if today’s developers actually built houses with proper back gardens. Imagine allotments for many more people, green roofs and green walls, and new and enlarged parks. Imagine if the parks were vibrant healthy environments, with lots of biodiversity, instead of the mown monochrome lawns. Imagine if plants were encouraged alongside railway lines, road verges and urban canals, and trees planted in every street. Imagine if nature’s much more messy beauty replaced the ugliness and sterility that straight lines and tidiness bring.

Britain’s gardens comprise an area the size of the Norfolk Broads, plus Exmoor, plus Dartmoor, plus the Lake District. Acres of Britain are gardens and they have an enormous potential as wildlife havens.¹¹ Indeed, they already are: gardens can be much more biodiverse than intensive agricultural land. Imagine if every garden had a small pond and a patch of wild flowers, besides the conventional palette of garden plants, fruits and vegetables. Imagine if all of these were chemical-free. This would be a great refuge for bumblebees and honey bees, lacewings and spotted flycatchers, swallows, frogs, newts and toads, and hedgehogs too. It would also bring many who have nature-deprived lives, and especially children, face to face with the beauty of nature. They might even dig up their concrete driveways and allow water to be absorbed by the ground, reducing flooding and creating sustainable drainage.

Putting all this together would create much greater genuine prosperity. It would be the right thing to do, because it would be both the economic thing to do and, in the process, would deliver the environment that many environmentalists who reject economic approaches would want too. It would also be ethically right, fulfilling our duty as stewards of the natural environment on behalf of future generations. There would be hen harriers and golden plovers and curlews and flycatchers, and there would be all sorts of plants, insects and other fauna.

It would not be a wild world, and it certainly would not be a ‘re-wilded’ world. It would be every bit as managed as it is today. Even those areas left aside would be deliberately chosen for intentional neglect. Deer would be culled, hedges would be reinstated and managed, rivers would be built around natural capital deliberately put in place, and city streets would be planted with trees. The prize is not an abandonment of the land to the ‘forces of nature’, but the replacement of a badly managed natural environment with a much better managed one. We have witnessed the disastrous consequences for people of taking the nature out of their lives, and we can redress this, but we cannot take the people out of nature.

Wouldn’t it be wonderful if this was what we could pass on to the next generation?

2
BUSINESS-AS-USUAL

Imagine waking up in May 2050. You might remember the May mornings before 2020. This was a time of bright yellow oilseed rape fields. There were still some swallows, a few swifts and the occasional cuckoo. In the right place you might have heard a curlew. If you were really lucky you might have seen a spotted flycatcher. In 2050 it will be very different if we go on as we are. By then, all these birds will be rarities. There will be even fewer insects, agriculture will be more intensive and the fields barren of anything but the chosen crop.

There will be 5 million more houses, and little left of the Green Belt, except perhaps in name. Lots more roads, railway lines, solar panels and wind turbines will have industrialised the countryside. There will be very few wild salmon left, but lots of fish farms and more Trump-style golf courses. Nature will be ever-more confined to reserved areas – like zoos in an increasingly urban and industrial landscape.

There will be compensations. You will have communications technologies that cannot even be imagined today, just as I have an iPhone now, which was unimaginable a couple of decades ago. Everything will be digital, with robots, 3D printing and artificial intelligence (AI) fulfilling many of your needs. You will know your genome, and have medical treatments available to you that again are hard to imagine now.

Some economists continue to think that the natural capital you will have lost is a price worth paying for all these new benefits. But much of this can’t be simply substituted, because natural capital is not like that, open to a marginal loss here and a marginal loss there. Nature isn’t marginal, and it does not come in discrete bits to trade off against discrete bits of man-made and human capital. Worse still, it might bite back: you may know your genome, but you might not have any antibiotics that work.

This is the silent, grey and impoverished natural world we could leave to the next generation. It is what it might look like if we don’t act now, and confront the stark reality that we face if current trends continue. We cannot and should not shy away from thinking through what will happen if we carry on damaging nature and allowing our stock of natural capital to continue to decline. It is not just about the loss of nature, and all the spiritual and emotional underpinnings to what makes us fully human, but about our economic prosperity, which depends on nature and natural capital. The land would be a dull, brown and unprosperous land – and a lot less appealing to share pictures of on whatever replaces Instagram by then. We really would need a virtual and screen-based reality to console ourselves with.

Being brown, not green, means a lower level of sustainable economic growth, and perhaps even no growth at all. It is against this background that the case for nature is to be seen as a great opportunity to make us all better off: better off in a narrow economic sense, as well as a wider sense. May 2050 could be noisier and more vibrant and exciting than May 2020, and more prosperous too. But not unless we make this happen.

A damaged inheritance

The decline of nature in Britain has been extensively documented by some of the world’s best naturalists. There are books about the decline of particular species, and studies and reports on the more general declines of life on farmland, uplands and in the soils. Even where things appear to have got better, as with water and urban air quality, some of this is not what it seems.¹

Much of this evidence is specific to particular species and habitats, and it is supplemented by anecdotes and personal memories, and in novels and films. It is a spiritual and aesthetic loss, as well as a scientific one. Laurie Lee’s world of Cider with Rosie in the Slad Valley in Gloucester, Flora Thompson’s Lark Rise to Candleford, and the novels of Thomas Hardy describe a landscape full of colour and variety, with wild flowers, songbirds and elements that could almost be called wild, even though they are all man-made.² The early landscape painters and the Romantics eulogised nature and developed concepts of the ideal landscape and the picturesque, and Wordsworth underscores the special powers of the natural world to heal our minds – a point made repeatedly down the ages.

This art and literature, often dismissed as ‘romantic’, has a hard scientific foundation. Over the twentieth century the colour and vitality of the British landscape has been replaced by monotones of green, yellow and brown. There are dark and dense conifer forests, vivid green fertilised fields of grass, and the yellow and brown of cereal landscapes. The people have gone too: farmland, which makes up 70 per cent of the country, is now managed largely by fertilisers, agrichemicals and machines, and in time it might be autonomously farmed by robots. To the silent spring of the birds has been added the silence of people.

It has not all been downhill. The pea soup fogs have gone from the cities and the gross pollution of the mid-twentieth century has been gradually unwound. There are few rivers now that could be called biologically dead, as the Mersey and even parts of the Thames have been until relatively recently. Sewage is no longer dumped at sea, and DDT has been banned.

Some species have recovered, and these are often trumpeted as ‘successes’. The peregrine falcon is becoming quite common again (albeit as much in cities as in the uplands where illegal persecution remains); the buzzard has broken out of its southwestern enclaves; and the odd salmon has even made it up the Thames. The red kite is back in the Chilterns and mid-Wales, and is spreading fast. The cirl bunting has been pulled back from the brink of extinction in the southwest of England. Even the pine martens are showing tentative signs of recovery, and the fortunes of the otter have been transformed.

The optimists get terribly excited about these very visible improvements. Such success stories can be tracked, filmed and shown on screens, unlike the bulk of the biodiversity that lies beneath our feet in the soils. But welcome though they are, they don’t tell us much about the underlying adverse trends; nor do they indicate some quick and miraculous improvement. Like the climate sceptics who point to the odd colder year, or even just a cold snap, they mistake exceptions for the trend. It simply is not true to suggest that as people get richer, they reverse the declines and get back to anything like what has been lost. Ecosystems are complex; they require firm foundations, and many of the building blocks have been knocked away, diminishing resilience to what is coming. There is not much chance of simply going in reverse gear back to the status quo ante. We can’t just have a couple of hundred years of industrialisation, take a big environmental hit, and then, Humpty-Dumpty-like, try to put it all back together again. Nature doesn’t work like that: much has gone for good – because of us, and the inefficient short-term economy we have built.

The fundamental building blocks of natural capital – the soils, groundwater, the river catchments and the air – are not getting much better. Soils are still deteriorating from a terrible baseline; groundwater will continue to deteriorate for at least another 60 years even if we limit current pollution;³ the carbon in the atmosphere has exceeded 400 parts per million and does not appear to have peaked;⁴ and the mayflies in many rivers are now scarce. Statistically, adding more and more aliens as the globalisation of species plays out may increase the narrow measure of species biodiversity, but this is not the same thing as improving ecosystems. Counting species does not tell us much about the health of our environment. Zoos have lots of species, but not lots of nature.

While it is true that the chemicals applied to the land are sometimes used to a lesser extent than they once were, and in a narrow sense water quality has improved, in a dynamic ecosystem stopping pollution inputs does not halt the decline in the underlying assets. A tanker can stop its engines, but it will plough on for a long way before coming to a halt.

What is missing, and what matters, is the aggregate measure of the overall state of our natural capital, as well as the constituent parts, and the overall state of the natural environment that has been lost since the Industrial Revolution, and especially since the coming of industrial agriculture. A full picture will have to wait until proper national natural capital balance sheets have been developed and populated with good data. In time and with the explosion of new digital technologies to do the measuring, this will be possible and the numbers for the past can be added, in the way in which numbers for populations and economic performance in past centuries have been added to the national statistics by painstaking research.

In the absence of an aggregate, the best that can be done is to piece together the evidence for the main categories of our natural capital. This is something that naturalists and conservationists and ecologists have been doing for a long time. There are bird atlases, plant atlases, insect and butterfly atlases, and reptile and amphibian atlases, and there are New Naturalist studies on specific species and habitats. The non-governmental organisations (NGOs) have brought much of this together in the ‘State of Nature’ reports, led by the RSPB (Royal Society for the Protection of Birds).⁵ Steps to develop more comprehensive databases, using the full panoply of digital mapping techniques, will shortly give us a real-time and extremely detailed understanding of exactly what is going on.

This is not the place to try to provide a comprehensive summary. It is both beyond the scope of this book, and well beyond the abilities of an economist to construct. The direction of travel is, however, pretty clear, and it is this that we need to bear in mind in being realistic about the baselines, the scale of the challenges, and the disastrous consequences that will follow if we do nothing to hold the line.

More declines

The easy bit is the non-renewables which, as the name implies, can be used once.⁶ Nature has endowed us with them – they are natural – but they do not renew themselves except over geological time. They include the coal, iron ore, tin, oil and gas upon which our economy has been built and remains utterly dependent. Unsurprisingly, we know a lot about them. There are detailed measurements of the volumes mined and extracted, and there is also price data. This least interesting dimension of natural capital is the easiest to measure. It is also the dimension of which, by 2050, much will have been exhausted or, in the case of coal, oil and gas, hopefully left in the ground. In chapter 10, we will see that we should compensate future generations for what we have consumed, and for the legacy of carbon and other mineral pollution we have left behind from our largely selfish use of these non-renewables.

When it comes to the really important stuff, the renewables – the natural capital that nature can keep on giving us for ever – there are two obvious starting points. The first is the bits we are familiar with: the birds, plants, mammals, fish and invertebrates. The second, the one we concentrate on throughout, is the habitats and ecosystems, including the river catchments, the farmed lands, the uplands, the coasts and the urban areas.

How bad could the river catchments get in a business-as-usual scenario? Think of the stresses they already face. If you drink tap water in London it is often said that it may have already been through up to seven people.⁷ That water will have been abstracted from rivers and cleaned of all the chemicals that have leached into it, and will be again after your sewage has been collected, processed and discharged back into the river. It might also include raw sewage from storm overflows. The sewage, before it is treated, will be contaminated with pharmaceutical products. Take a look in the cupboard under your sink. See the cleaning fluids you put down the sink and the toilet. Take a look in your bathroom at all the products you use. Many of these end up down the plughole, and we all just expect the environment – in this case the rivers – to absorb them. You turn on the tap and you expect clean water to flow. You water your garden and wash the car with this costly, treated water, and you don’t want to pay much for it.

Yet that is just the beginning. We go on tipping more and more fertilisers, pesticides and herbicides into our watercourses, and allow the silt to run off the land from intensive farming practices. Industry adds its pollution too. Add all the plastic and other rubbish that gets thrown in and you can see the results alongside any major river.

Now add another quarter-century of all this. Add more and more chemicals, and more demand for more water for everything from land irrigation to servicing the expanding population. The National Infrastructure Commission⁸ recommends a new water grid to connect major rivers just to meet demand (and without much regard for the environmental consequences of the mixing of waters).⁹

Now add climate change on top. You may be confused by the various claims about the impacts of climate change. Droughts, floods and plagues make the headlines, and dire warnings may induce scepticism or, worse, fatalism, but behind the hysteria lie some very inconvenient predictions. Heat in summer means more demand for water.¹⁰ Floods in winter mean more silt and more pollution. The river life is adapted to what we have, not the climate we might get. For the river catchments, business-as-usual for another quarter of a century looks bad.

Agriculture plays a big part in both water demand and pollution and much else. A common theme in all these sad tales of decline is the impacts of modern farming not just on specific species, but on farmland birds generally and on the state of our rivers and on inshore marine environments and on the emissions and air-quality consequences and on the loss of invertebrates and mammals and the serious decline in the soils. It is beyond doubt that it is the intensification of farming, and in particular the application of chemicals, that is a primary driver of this major environmental damage.

By 2050, targeted chemicals should be able to get rid of almost anything that competes with or damages crops. Indeed, many can now. Almost all arable weeds (and in some robotic applications every individual weed) can be killed off with the non-selective herbicide glyphosate. That is why one well-known brand is called ‘Roundup’. As glyphosate comes under increasing regulatory scrutiny, replacements are on their way. Without a change of direction in agriculture, by 2050 herbicides will be completely and selectively engineered for specific crops, and pesticides will finish off specific insects. Ultimately nothing will be left for wildlife to eat. By 2050 it will largely be over.

The uplands will not escape these pressures in the business-as-usual scenario. Being home to a lot of biodiversity now does not mean they will continue to be so. The economics of marginal upland farming is already precarious. If and when the main elements of the CAP wither away, and in the absence of proactive efforts to protect and enhance the uplands, things could go downhill very quickly. This farmed landscape could revert to ranch-style extensive farming, to intensive game-shooting and to development. Worse still, it might simply be abandoned. The rewilders might like this idea. Let the scrub grow back and then the woodlands re-clothe the hills. Except it will not be like this. The uplands are farmed landscapes. It is farmers who have shaped the landscapes that so many people, and so much of nature, enjoy. Farmers created the hedgerows, and the ditches and the lanes and the meadows. Grazing stock is the essence of the uplands. Woodland birds and woodland mammals might benefit, but this will not conserve the nature and landscapes we so admire today. By 2050 the uplands may be playgrounds still, but not the playgrounds we know now. Few think that zero subsidies will produce a helpful answer, except those who simply want us humans to abandon the land.

The impacts of farm pollution are exacerbated by other developments. Fish farms bring direct pollution to our coasts, and perhaps even more pernicious is the harvesting of sand eels and other small marine life to feed the farmed salmon. Direct pollution from shipping, from oil slicks and the washing of tanks at sea (including now palm oil), to the illegal dumping of waste and chemicals, all contribute to the declines. Plastics have become ubiquitous in our seas and along our coasts. Their sources are all largely out of sight, diffuse, and able to escape the law.¹¹ These are largely out of control. By 2050, with lots more trade and shipping, with lots more fish farms, and with global warming impacting on already stressed ecosystems, there may be no puffins, few gulls, and below the surface a more lifeless habitat. By 2050, eels and wild salmon might be an occasional rarity, as their populations decline below the thresholds for renewing themselves naturally.

The threats to our urban environment out to 2050 are about both its size and its content. There can be little doubt there is going to be a lot more ‘urban’ in 25 years’ time. More greenfield and brownfield sites¹² will be built on, new villages and towns will be built, and the built land area will absorb more and more of the Green Belt. There will be quite a lot of semi-urban sprawl for the ‘executive homes’ so beloved and profitable to the building companies. It is not inevitable that all of these developments will have less biodiversity than the land they concrete over. But concrete they will, and without strong net environmental gain compensations, the aggregate impacts are probably going to be worse. For every showcase green development project, there are many that are anything but.

In terms of the content of urban areas, the temptation to concrete over the green spaces in our towns and cities will become increasingly intense. The parks and gardens are going backwards for a variety of reasons, and over the next quarter of a century, if we carry on as we are, these will gradually disappear. What remain may be turned into amusement parks, and nature will get squeezed out. Brownfield sites, even where they have surprisingly high levels of biodiversity, will go under concrete.

What is coming next

The above stock-taking is a picture of general declines, with some noticeable exceptions. Almost all of the causes are known and persistent, and all can and should be dealt with. Yet what dramatically raises the stakes are the new challenges the natural environment is facing. Without positive action, all the trends described above will continue. It will be a picture of gradual declines, punctuated by sudden population collapses and occasional trumpeted successes. As resilience is tested, one day you will look up and there won’t be any swallows and swifts in May. The scary thing is that you might not even notice. For the next generation, it may be a case of not missing what they have never seen, except in pictures and films.

These extrapolated trends could get a whole lot worse without immediate action. Over the next few decades through to mid-century, Britain faces a rising population, and rising consumption. These together mean more houses, more developments and more hard infrastructures. On a business-as-usual basis, the results will in aggregate be negative for the natural environment. It is not only the present baseline that needs to be addressed, but also the ‘known unknowns’, and resilience against the ‘unknown unknowns’ of the future.

More people

Britain is one of the most densely populated countries in the world, even though large areas are sparsely inhabited. There are the great conurbations, and then there are the Scottish mountains, the Pennines and mid-Wales. Although London and the surrounding area is being overtaken in scale by the mega cities of Southeast Asia, the southeast is as densely populated as parts of the Netherlands and Hong Kong. The corridor that runs north to Birmingham and Manchester is dense too, and HS2 will make it more so. The new Oxford–Cambridge corridor, with more than 1 million new houses planned, is going to add another dense conurbation. The clamour to build on the Green Belt is getting ever louder.

In the 1970s and especially the 1980s, the assumption was that Britain’s population would peak and then perhaps gradually decline, and in the process it would age. The assumption was that Britain would go the way of Japan and Germany – with an ageing, static or even declining population. British women have already gone through the so-called ‘demographic transition’, and the silver lining to the silver age should be less pressure on resources. The depopulation of the rural areas that followed the great urbanisation of Britain in the nineteenth century, indeed since the enclosures, would continue relieving environmental pressures. We could, it was thought, become an older, less populated and greener country.

This has been turned on its head by immigration. For much of its recent history, and especially in the nineteenth century, Britain exported people (and Ireland more so). The displaced rural populations colonised the USA, Canada, Australia and New Zealand, and countries throughout the British Empire. It was the safety valve as mortality rates fell.

Britain started the twentieth century with a population of around 25 million, and ended it with around 60 million. Nature was bound to suffer as a result, especially as the 60 million were many times wealthier than the 25 million. Immigration picked up as the Empire slowly wound down, with notable flows from the Caribbean and then Uganda and East Africa, and from India and Pakistan.

The initial numbers were quite small, but the game changed in the twenty-first century. European immigration was added to the non-Europeans, notably after 2004 when the Eastern European countries joined the EU, and freedom of movement applied to them. Britain made few objections at the time, and assumed that immigration from Eastern Europe would be marginal – perhaps 50,000 per annum – and would enhance economic growth.

The immigration figures started to edge up from the mid-2000s, reaching a gross 600,000 per annum in 2014/15, with net migration peaking at over 300,000. Such levels are unprecedented in British history. Net migration is still around 250,000 per annum (the average since 2004), with non-Europeans taking up the slack as European net migration falls.¹³

Few societies find it easy to cope with what now could be described as mass immigration, and for Britain it was a crucial factor leading to the Brexit vote. The political ambition is clearly now to limit the number of European immigrants. Whether this objective is met, those who are here in the main expect to stay, and there will still be positive net immigration for years, and perhaps decades, from non-European countries.

There are two effects on the natural environment. The first is the aggregate resources, including housing and infrastructure, that will be required to address the needs of a growing population. The second is the impact on composition. By 2020 the population is expected to reach 67 million, rising to 77 million by 2050.¹⁴ Although this population will continue to age, it will have more young people than anticipated a couple of decades ago. The European immigrants have turned out to be young and well educated. For the European and non-European immigrants, birth rates are typically higher than for the rest of the population. We have built population growth into the long term.

Without mitigating action now, the environmental consequences of some 10 million extra people will be a repeat of what happened throughout the twentieth century. They will place 10 million more demands on the environment for consumption – for water, energy, housing and food. They will have a higher standard of living than those in the twentieth century, and therefore they will consume more per head. This is the equivalent to adding one more London, and one that is wealthier at that. None of this suggests that immigration is a bad thing: these extra people would have an environmental impact wherever they live, just as we do. The important point is that if we want a green and prosperous land, we have to factor in the inevitable consequences of a growing population.

More houses

With the growth of population has come an assumption that Britain needs more houses, and all the main political parties have committed to building more. The Conservative and Labour parties are competing to come up with ever-higher targets. These extra houses could pose a great challenge to the natural environment, and the impacts depend on where and how they are built and what supporting infrastructure is provided. On a business-as-usual basis, it could mean more ribbon development, more incursions into the Green Belt, more loss of greenfield land and more traffic and associated infrastructures. Every city, town and rural village is getting houses added and, with housing a political imperative, there is so far scant evidence that the environment is going to do anything other than suffer, as it did in the 1930s with the creation of ribbon development and suburbs, and in the 1960s too. There is little beauty in this business-as-usual world.

The increase in population does mandate more houses, but the demand for houses is more complicated. Britain has a high level of owner occupation (even if it is falling), and owning a house is the main way in which citizens acquire wealth by what is in effect forced savings. British people want to own houses, in addition to needing housing. It is still a core part of the ‘British dream’ for young families, in a way that young Germans would not appreciate, even as fewer can afford it.¹⁵

The emphasis on ownership reinforces a further trend, which is household break-up. More people are choosing to live alone and still own houses, and this is reflected in a fall in occupancy rates. Whether there are enough houses to go around depends on how many people live in each of them.¹⁶

The point about occupancy rates drives a wedge between the simple equation of population and the number of houses needed. It gets worse: as people get richer they want bigger houses; they want more privacy and seclusion, and they may even want more than one house. The constraint on housing demand is income. House builders know this. It is one of the reasons why they prefer to build large ‘executive homes’ and not affordable small ones.

Changes in housing size and occupancy in turn have implications for the environmental footprint. A row of small tenements or blocks of apartments and flats in inner cities have radically lower environmental impacts than those of larger houses and housing estates on the periphery of towns and cities. Dense urban housing creates fewer carbon emissions and less traffic, and brings economies of scale and density. Imagine a world where most people lived in cities, and most of these in the city centres. It would be a world of public transport, not private cars, and of radically greater energy efficiency. It would leave most of the rest of the land open and green, and indeed it would create more scope to green the suburbs with lots of natural capital for these urban populations to enjoy.

What these considerations illustrate is that housing left to market forces will be an environmental disaster and will replicate some of those disasters now being witnessed in a number of rapidly developing countries. Market forces drive up demand for houses in line with income. If the next decades witness 2 to 3 per cent GDP growth per annum, it is not hard to see that much of the Green Belt, and lots more green fields, will be concreted over by 2050. If each development does not have to pay for the environmental and social costs it imposes on the rest of the population, it will impose them. Imagine how quickly the Green Belt would fill up if the landowners could sell to the highest bidders without worrying about planning permission and paying for the environmental detriments caused. Paying for top lawyers and using consultants, lobbyists and PR companies to influence legislation and planners’ decisions has worked for them in the past, and it could go on doing so. Indeed, it is.

This is why planning is essential to housing and housing development. Britain needs to decide how many houses should be built, what sort of houses should be built, and where they should be built. That was the step taken in the 1947 Planning Act, and with the creation of the National Parks (which were largely planning bodies – more on this later). It has now fallen away.

It is perfectly possible to house the growing population without a net detriment to the natural environment. Indeed, the environment can be enhanced as part of the process. Nor is it necessarily the case that house prices have to rise, provided that the impacts of developments on the rest of the natural environment and us are properly priced, compensation is paid and prudently spent on new and enhanced natural capital, and, overall, houses are not protected from taxation to make them particularly attractive ways of accumulating wealth. But to do this requires much more efficient policies, to which we will return later.

More infrastructure

There are probably not many people who think that Britain’s physical infrastructure is in good shape. Sitting in a traffic jam on the M25, experiencing the delays on the Great Western main line, trying to make a mobile phone call on Exmoor, let alone trying to get a decent broadband connection, are daily reminders that all is not well with Britain’s infrastructure.

Along with these basic service failures there are additional pressures. Water supplies are taken for granted, but the pressure on abstractions and the growth in demand with new housing have considerable implications for the natural environment. The attempts to reduce carbon emissions are leading to the need for new electricity transmission lines, new wind and solar farms, and new nuclear power stations.

It is not hard to argue that Britain’s infrastructures are generally not fit for purpose, even before we add the extra 10 million people and all the houses that are planned. If we do add these, and work out how much transport, energy, water and sewerage, and communications demand they will add on top, the scale of the new infrastructure development requirements that emerge is very large – with potentially massive implications for the natural environment.

Infrastructure comes in lots of shapes and sizes. There are massive projects like HS2, Crossrail, Hinkley nuclear power station, the Thames Tideway and new airport runways. Then there are significant increments to the existing systems: to roads, electricity and gas networks, and to the water and sewerage systems.

On top of all this, there are the connections to all the new houses. Travel around many smaller towns and villages, and you will see 500 houses being added here and there on the outskirts. Semi-rural Oxfordshire is littered with them – from the housing developments at Didcot linking up to the A34, to the housing estates added to villages without many amenities – in effect dormitories. One or two cars per new house on the existing roads is going to have obvious consequences, and yet the developers have only limited liabilities to address these.

Many conservationists take a hostile stance towards new infrastructure and new housing developments. Across Britain there are community initiatives to try to halt the bulldozers. Dismissed by the housing industry and their lobbyists as driven by ‘nimbys’ (‘not in my back yard’), these campaigns are typically about much more than the impacts on their individual properties. To many these look like a repeat of tagging housing on to existing communities in the 1960s, or, worse, the ribbon developments of the 1930s that helped to precipitate the planning legislation of the 1940s. They have much to fear and much to protest about if they want to protect their local communities.

The problem for these objectors is that they will mostly lose. Central government has pushed through a series of planning acts to tip the balance away from local communities, encouraged by the massive lobbying of developers. There are now national plans and national strategies, and local authorities are in effect told to get on with it.¹⁷

While there are good reasons for particular campaigns and objections, something more is needed if the impacts are not to be seriously damaging to the natural environment. This requires not only a return to planning, but also the urgent application of the ‘net environmental gain’ principle to infrastructure and housing developments, properly and comprehensively measured.

It also requires an intelligent approach to technologies. Electricity transmission lines no longer need to be a blot on the landscape. They can go underground. Roads and railways can be fully digital. The need to travel to work can be tempered by video links and ever more efficient communications. The comprehensive roll-out of broadband and fibre could reduce the demands for other physical infrastructure. Better measurement and management of energy supplies and water can reduce demand too. It is possible (and in the above examples it is necessary) to improve infrastructure and at the same time protect and enhance the natural environment, but only with an integrated and planned approach. The unconstrained application of market forces will not deliver this.

More consumption

The pressures of population growth, housing and infrastructure are multiplied through the rising levels of consumption. As GDP goes up, so does consumption. Indeed, most of the increases in economic growth in Britain are driven by spending ever more. Britain has a very high propensity to spend all of its income – and indeed more than its income – by increasing debt levels. In 2018, this was reflected in the average household spending £900 more than their income.¹⁸

Some numbers help to bring a perspective to this challenge. If GDP grows at 3 per cent per annum, it will double in less than 25 years. It is just the power of compound interest. Britain probably won’t quite make 3 per cent, but, as a rough guide, by 2050 a doubling is a plausible assumption to make.

Imagine what this would look like in 2050. Although the extra income would be spread over more people, think what would you spend twice your current income on. The better-off might buy bigger homes or even more second homes. The bulk of the population will buy more holidays, more clothes and more services. Most of this stuff has the potential to further damage the natural environment and create even more waste.

It is this that leads more radical greens to question whether we should be allowed to keep on spending so much or whether a more frugal lifestyle is required to ‘save the planet’. It is not hard to empathise with this sentiment. Looking beyond Britain, growth rates in China, India and increasingly in Africa are more like 5 to 7 per cent per annum. China has spent nearly 30 years growing at around 10 per cent per annum, which is a doubling of the size of its economy every seven years, and this is reflected in the new affluence of the emerging Chinese middle classes who now turn up in Britain in significant numbers as tourists. Whatever the benefits of all that extra consumption to the Chinese people, from a global environmental perspective, the spectacular GDP growth of China since 1980 has been a disaster for climate change, water resources, the state of the seas and for biodiversity. And it is one that continues to gather pace.

There are two dimensions to this extra consumption that impact on the natural environment: how much is spent; and what it is spent on. How much is spent should not be based on the 2 to 3 per cent GDP growth number, and there is a lot to be put right before economic growth can be accommodated, including the impacts of all the fiscal deficits, trade deficits and quantitative easing that pumped consumption up artificially high since the financial crisis of 2007/08. Current growth and spending levels are not sustainable: we are living beyond our means. It is not that these numbers cannot rise without damage to the environment. They can. Rather, it is that the numbers need first to be adjusted so that they are in fact sustainable.¹⁹

The amount of consumption growth after these corrections depends on technical progress, and there is lots more of this to come. Rebased, what will the resultant incomes be spent on? This depends on prices and planning. Current spending does not properly take account of all the external negative impacts on the environment – the externalities – and it should. What this requires is that these externality costs are reflected in the prices we pay online and in the shops. Food is artificially cheap because farmers do not pay for the pollution they cause. New houses are artificially cheap to build because the builders do not pay for all their wider impacts and the infrastructures they require. Packaged goods are artificially cheap because we don’t pay for all the cardboard and plastic. Once all these externalities are included – if the polluter-pays principle is properly applied – what we spend our money on may turn out to be rather different than business-as-usual suggests.

An even quieter spring?

Business-as-usual is not a stable equilibrium, a world where we just live with the damage done in the twentieth century and allow it to worsen in this century. The damage is dynamic and, if allowed to run on, it will not bode well for the natural environment. More people, more houses, more physical infrastructure and more consumption is a world in which the chances that nature will hold its own are slim without action now. There will be some successes, but this is a world of instant gratification in almost all human activities.

The housing lobbyists argue that there is lots of land, and that building on more of it leaves lots left. Similarly they argue that the Green Belt is large, and a few more houses make little difference. Tracks up hillsides for wind farms, trucks to fish farms, cutting down a few ancient woodlands for HS2, and bisecting the Gwent Levels with a new motorway are collateral damage for a claimed greater economic good.

This marginal argument, a marginal difference for each project and each marginal development, when set against a much larger whole plays out in business-as-usual. At each point along the way, one more housing estate is too small to make much difference to the whole. But it is a deadly argument. The trouble with this marginal argument is easy to see, but almost entirely ignored. Each time the marginal card is played there is a bit less left of the ecosystem and habitat of which it is a part. And so it goes on, until there is nothing left. In the words of the song by Joni Mitchell, ‘you don’t know what you’ve got ’til it’s gone’.²⁰ You will hear developers say that the Green Belt is not really very green anymore anyway because it has been intensively farmed. But why has it been intensively farmed? Because each new marginal addition to the chemical arsenal has been added on a case-by-case basis.

The tyranny of the marginal is the route to an increasingly silent spring. It is what business-as-usual means. Lots and lots of marginal losses end up with a catastrophe for insect life and for farmland birds. To seriously head off the damage that business-as-usual will bring – through more people, more houses and more hard infrastructures – the starting point needs to be the public goods, and not the marginal changes. It is these public goods that are being eroded in a death by a thousand cuts. Make no mistake, business-as-usual is likely to tip many ecosystems over the edge. By 2050 there could be very little left, and in a world with perhaps 500 or more parts per million of carbon in the atmosphere. The intensification of farming, industry, towns and cities could result in a silence of nature – of the birds, of the remaining insects and most of our mammals, reptiles, fish and invertebrates. It doesn’t have to be like this, but it will unless we act, and act now.

PART TWO

3
RESTORING RIVERS

What could rivers, nature’s plotlines, be like in 2050? How might they be enhanced? The water quality could be good and free from pollutants. They could follow more natural paths, with meanders and oxbow lakes, rapids and gentle floodplains. They could flood from time to time, creating and sustaining the floodplains. The wildlife could be plentiful, with otters and dippers and kingfishers and grey wagtails. Salmon and other migratory fish could be better able to breed. There would be abundant aquatic plants and invertebrate life. The rivers would be accessible for boats and children and recreation. There could be river paths for walkers, stretches for canoes and for anglers and birdwatchers.

How could we achieve a much better outcome by 2050, and why would it enhance prosperity? The main steps are obvious: protect and enhance the peat bogs and upper river catchments; go for natural capital solutions in the upper valleys; keep farm pollution and soil from entering the rivers; reduce phosphorus, pharmaceutical and other emissions from water-treatment works and, better still, stop them getting into the sewerage system in the first place; stop storm overflows pouring raw sewage into the rivers; manage abstractions more effectively, and address leakage; stop industrial pollution entering the rivers and limit surface run-off; and, finally, open up access so we can all enjoy greener and more prosperous rivers.

Do all this and our rivers will thrive, and we will all be better off as a result. Each and every one of these steps is practical and can be implemented now. They all fit together. What is needed to get from here to there is to treat the catchment as a system, and to take a whole-system approach.

Protecting the upper rivers

Rivers start with a trickle from springs on hills and moorlands and mountainsides, and become streams. It is here that the rain tends to be most persistent and floods start. What matters is the ability of the headwaters to hold onto the rainfall and to turn a downpour into a trickle. Damage to river catchments at the source is mapped onto the rest of the catchment.

Run-off is a big problem for many of our rivers, and it has been exaggerated by farming practices. Moorlands drainage and overgrazing has done much damage. Farmers seeking to improve their upland grazing have added drainage. Overgrazing exposes peat and fragile soils, and once the vegetation is stripped off, the waters run much faster. On lower elevations, river catchment sources have sometimes been ploughed up for crops, further increasing soil exposure.

These problems are among the simplest and cheapest to fix in a catchment. The sheep densities can be reduced, the drains blocked up, and the ploughing of the uplands limited. Digging peat can be stopped, and peat bogs restored. All of these measures have economic costs, notably to sheep and, to a lesser extent, cattle farmers, and to maize and other crops lost. But the economic equation is heavily tilted in favour of these measures. Upland sheep farming (more on this later) is at or below the margin of economic viability in any event and heavily dependent on subsidies. Without the subsidies it would be very different, and since the subsidies are public money, redirecting them in the uplands to better water management practices would be a net economic gain.

Indeed, so great are the economic benefits to the water industry just in the narrow terms of managing water quality that water companies have been taking direct action, including through the management of land owned by the companies in the headwaters and by payments to farmers to change their practices. United Utilities helped on its land in the Forest of Bowland Area of Outstanding Natural Beauty (AONB) to rewet and restore blanket bog and add woodlands, and South West Water has been helping the Exmoor Mires Project to conserve and enhance peat bogs at the top of the Exe and Barle river catchments – in both cases out of self-interest. To give an indication of the economics, the Exmoor project has been estimated to have benefits that exceed the costs by a very high eight times.¹

In ploughing up some of the steeper slopes, and in particular planting maize on them in the Somerset Levels catchment, soils can be left very exposed, and indeed maize farming has directly contributed to the silting-up of the River Parrot and River Tone, which in turn helped to worsen the great flood of the Somerset Levels in 2014. The farmers then demanded that the Environment Agency dredge the rivers to remove the silt that they had contributed.²

These costs, and the value of the lost soil to the farmers themselves, easily outweigh any possible profits from the crops.³ The Somerset Levels – the ‘summer lands’ – are mostly below sea level and the sea level is rising with climate change. It is an integrated catchment system, not a series of discrete bits to be addressed separately by farming policy, flood defences and dredging, and conservation measures. Natural capital approaches are integrated and offer much better economic returns. Cultivating maize on exposed slopes should be banned on both economic and environmental grounds.

Stopping farm pollution

Once the trickle becomes a stream and then a proper river, it becomes vulnerable to direct pollution. Few upper river catchments have a lot of industry, so the main pollution comes from farming. Upper river valleys are typically given over to grazing and pasture, rather than cereals, and hence it is livestock farming practices that pose a threat.

Perhaps the worst is the release of slurry into rivers, depleting their oxygen and destroying their biodiversity.⁴ There are two principal ways this can happen. First and most reported is the failure of slurry-holding pits and tanks, usually as a result of poor maintenance. Such incidents are surprisingly common and often devastating. But there is also the spreading of slurry: while the intention is to retain the liquid manure on the fields to promote grass growth, it can nevertheless run off into streams and rivers. This is particularly problematic if the slurry is applied in winter to frozen fields. The frost makes it possible to get tractors and machinery onto the land, but it also forms a barrier to absorption. The lethal (for the fish) combination is slurry-spreading on frozen ground, quickly followed by heavy rain.

Slurry, badly managed, is a serious threat to the natural environment, but it is not the only way in which animal husbandry can adversely impact on rivers. Sheep-dipping to tackle a range of parasites, worms and foot rot is another detrimental element of (non-organic) farming practices, and it involves water. The residual liquids, after the dipping, have to go somewhere, although their disposal is regulated. Too often this has been out of sight in the watercourses, with sometimes devastating results.⁵

All these activities can be mitigated, often at minimal cost. The release of slurry and maintenance of slurry tanks are already subject to regulation. Spills are illegal and the problem arises not from the regulation but rather the inadequate penalties and enforcement. As budgets have been squeezed, the Environment Agency, Natural Resources Wales, and the Scottish Environment Protection Agency (SEPA) have retreated from the effective policing of the rivers. Catchment system management requires catchment system regulation and enforcement. A large number of incidents go unreported, or when they are investigated it is often too late to identify the source. The fines are clearly not a serious deterrent to farmers. Properly resourced policing and significant fines could all but eliminate these sources of river pollution. The use of drones and new advances in digital technologies to detect diffuse pollution will help to transform detection. There would be costs to the Environment Agency and the other bodies, but the balance of the damage versus these costs points towards more enforcement. The polluters may be fairly diffuse, but the pollutees are diffuse too, all down the river. Slurry in rivers can and should be stopped. Diffuse pollution should be limited. Both make good economic sense. The fact that the costs of the damage may well exceed the value of the total economic output of the farm tells us a lot about the perverse economics of much farming practice. Pollution is under-priced; agricultural output is therefore also under-priced.

Once the river gets to its middle stage, the ratio of grassland to arable land usually shifts towards arable. Conventional arable farming adds several layers of pollution and stress to rivers. It uses intensive fertilisers, pesticides and herbicides, and as with maize and the Somerset Levels example, it leaves the soils exposed to run-off and the depositing of silt in the rivers. It may also take water from the river for irrigation.

Farmers operating in these middle river areas are themselves vulnerable to the flooding that their activities can help give rise to, and hence they want to get the water quickly off their land and into the river, so the rate of run-off is artificially increased by ditches that take the chemical cocktails directly to the river much faster and hence in more concentrated forms. This raises flooding risk downstream, exporting the dangers to others. This was a process once managed through water meadows and vegetation cover along the rivers, in part because this made economic sense in a predominantly mixed farm system, but also because ploughing up riverside meadows required heavier and more powerful tractors and machinery. That can now be done. Once flooding was a resource for farmers to exploit in order to enrich their land. Now it is a menace to get rid of as quickly as possible.

The results are economically very inefficient and the economy would be much better off if many of these practices were curtailed or even stopped altogether. The central issue from an economic efficiency perspective, which we keep coming back to, is that some farmers are polluters who do not pay for the damage they cause others. Instead, they are polluters who expect to be paid not to pollute.

As discussed in greater detail in the next chapter, this should be reversed. If farmers paid for the pollution they caused, they would use chemicals in smaller quantities and target them more accurately. In the case of flooding, if farmers paid for the services that the river provides in taking excess water away, the ditches might not be so deep. They could also store more water. Finally, in a polluter-pays model, silt exported to rivers from riverside ploughing and cropped fields would come with a bill, and fewer of these fields would be ploughed.

With a polluter-pays policy, and hence the right relative prices, the rivers would be in a much better state. Biodiversity would go up, abstraction would go down, more ponds and reservoirs would be created, and the land would be wetter, especially in winter. It is all just good economics, and leads to a much more sustainable farming industry.

Dealing with the industrial legacy

Coal mining has wreaked havoc with rivers for a couple of centuries, and whole river systems have effectively been killed off by the spillages and run-off from mines. Mining tends to attract industrial processing to locate nearby, which adds to the pollution.

When it comes to mining and heavy industry, it is only relatively recently that polluters have been expected to pay. It is a surprisingly new idea. Mining has historically taken the same approach as that taken by the farming industry: the rivers are there as free waste-disposal systems.

As with farming, the economically efficient answer is to make the polluters pay. But it would still leave a horrible legacy. The toxic chemicals remain evident in the silts and muds of the rivers, and will do so for a long time to come. There have been many measures to deal with the legacy of asbestos in buildings, yet in the case of mercury, lead, radium and other nasty chemicals and substances in river muds, few such measures have been applied. Instead they just lie there in the sediment, largely out of sight, and off the agendas of the regulatory bodies. Roughly 2,000 miles of over 400 of our rivers may be affected by substances like cadmium, zinc, lead and arsenic. All have their unique pollution fingerprints – from examples like Bleaklow in the Peak District and the efforts to save the peat moorland from acidification, to the coal and industrial wastes affecting the coasts of the northeast.

In many, perhaps most, cases, there is little that can be done to make the polluters pay for legacy pollution, since the companies are typically long gone. The burden falls to the state to sort it out. In the case of coal mining, there is the Coal Authority, still grappling with the coal industry legacy, the flooded and polluted waters in old pits, and the groundwater problems.⁶

The economics of cleaning up these past legacies is often finely balanced. It very much depends on the precise pollutant, how stable the deposits are, and how fast the rivers can ‘cure’ themselves by washing the heavy metals out to sea – and then pollute some other marine environment.

Most of the mining has now gone. The ordinary economics of the markets has done for coal and most other mining, although open-cast mining still poses a threat and the use of water for fracking requires regulation. There are still the clay pits, and tin mining and even cobalt and lithium extraction may return in Cornwall. These aside, the main problem is no longer so much about the mining, but dealing with its legacy.

As mining and heavy industry have declined (often to be replaced by imports and production doing its environmental damage elsewhere), the various pharmaceutical and chemical concoctions that make up our daily lives and end up being washed down the sink and flushed down the toilet, are among the new challenges. Contraceptive pills lead to oestrogens impacting on fish life. Antibiotics can be toxic for the bacteria and algae that form the basis of aquatic ecosystems. Anti-depressants can change bird behaviour. Shampoo, soap and washing powders increase phosphorus content in water courses.

The pharmaceutical industry is a major threat when it comes to our rivers and water supplies. As with earlier industrial pollution, the rivers are treated as waste-disposal systems, especially when the companies can pass on what ought to be a producer responsibility to the consumer. They supply the drugs and products, we use them, the rivers then collect them, and water companies try to remove them from our drinking water and wonder what to do about them in our sewage.

A radically different approach is needed before we end up leaving the next generation with major new damage and another industrial pollution legacy. The catchment-based approach starts by trying to limit what goes into our environment. Drugs are tested for their effects on human health, but less so for their waste disposal. Producer responsibility, and therefore polluter liability, could change the game. Imagine if GlaxoSmithKline were liable for the environmental damage caused by its products. Imagine if Unilever were responsible for the disposal of all its beauty and personal hygiene products. The result would be a radical shake-up of the chemical composition of their products. They would have a direct incentive to minimise the risks.

But what about us, the consumers? The problem with a pure producer responsibility approach is that it leaves us free to dump our waste, without any thought as to how we do this. We should learn the lesson from municipal waste disposal and recycling, making the householder responsible for the safe disposal of their rubbish. We have separate bins, and there are regulations about the safe disposal of white goods and batteries. These may be imperfect processes, but they go in the right direction. Sewage is just another form of rubbish. To secure a better environment, household waste needs to be considered holistically. All of it needs to be regulated. In the case of sewage, consideration should be given to using pricing too. As technology advances, it will be increasingly possible to monitor the content of our wastewater and sewage. We can meter water coming in. In due course we may be able to analyse what is going out with real-time information. Might you change your behaviours if you really knew what was in your waste and the damage it might do? And if you paid for the consequences?

The water companies

Water companies are obviously key players in the river catchments. Water is for the companies a ‘crop’, to be harvested as a renewable that nature will keep giving them for free from rivers (and groundwater sources). The companies want ‘clean’ water and hence want to limit pollution from others. Cleanness in drinking water is a chemical concept: it does not necessary mean that it is biodiversity-rich, and indeed there are many organisms that water companies would rather not have in their water supplies. We want to drink clean water, pure H2O, not a host of other things that live in the river environments. Solving jointly for clean water and for biodiversity is not the same thing as just wanting the former.

In providing us with clean drinking water, water companies abstract water, which reduces flows, and they discharge our sewage and the waterborne waste of industry, suitably treated. The management of river flows and the consequences for river biodiversity is a complex business, further complicated by the building of dams and other water-storage facilities. Reservoirs on the middle rivers (and sometimes the upper rivers too) have economic and environmental costs and benefits, all dependent on the catchment system as a whole. Water abstraction is rarely marginal: it has a system impact.

The abstraction problem arises partly because there is no price for water.⁷ Once water becomes a valuable resource, it pays to address the 30 per cent leakage rates from water company pipes, and the companies have a stronger incentive to encourage water efficiency. Universal metering plus abstraction charges transform the incentives. Water may be freely provided by nature, but it has alternative uses. It should be priced at both the abstraction and the consumption points, and in the process capture the leakage costs in between. Otherwise it will be inefficiently used. Indeed, it is.

Water pipes leak treated water. With a marginal cost of water of mostly zero, it does not make economic sense to have a zero leakage policy. Yet the incentives to fix the leaks are distorted by the low cost of abstraction. Because there is no price, the choice between fixing the leaks on the one hand, and taking more water from rivers, groundwater and lakes on the other, is skewed towards the latter, and as a result in times of shortage, it is the rivers that suffer because of the leakage levels. It is not the water companies’ fault: it is the incentives they face. The water regulator can tell the companies to cut leaks, but this is a crude approximation of what is needed, which is a proper balance, reflecting all the environmental costs, of the alternatives, and the locations too.

This feeds through into the storage question and the crazy idea that we need high-quality water fit for drinking for use in watering the garden, cleaning the car, and a host of other non-consumption activities. So-called grey water is not only perfectly adequate for these other purposes, it is also of much lower cost. In some cases, such as using rainwater from water butts in the garden, it is better for the plants. The more expensive the purified water, the greater the incentive to do the right thing and store water.

What is missing is a grey water system and comprehensive metering. The former is probably not economic, except at the household level, although there is potential. Hence it is all about decentralising water, as part of a decentralised utility system. Future houses should be able to generate their own electricity, provide a place for work instead of commuting, and store quite a lot of water. They can have smart energy and smart water.

Sewerage is where the historical damage from water companies’ activities has been most apparent. In the past, rivers were sewage-disposal systems, and most of it was simply dumped in the rivers and out to sea. Over time this has been somewhat refined, but it is still the case that the capacity of sewerage networks cannot always cope in the event of storms. When it rains a lot, the sewerage systems overflow into the river. The argument is that it will consequently be very diluted (because of the storm flows). Yet this is far from convincing, and little consolation for those whose houses are flooded with it.

Fixing the sewage problem is not only about having big enough sewerage works. It is also about how the effluent is treated, and what happens to the resulting sludge. As with the deployment of natural capital approaches to the supply of water through the management of uplands, so sewage lends itself to natural methods too. It is just a form of muck and, like muck, it can be broken down and taken up by plants. It can be an asset. Reed beds are one method of doing this, once natural processes have begun degrading it. The methane, a by-product of decomposition, can be used for energy supplies. The insect life is a bonus, especially for birds.

As with abstraction, this is a problem of incentives. Water companies are not charged for disposals, and they have skewed incentives to prefer hard concrete infrastructure solutions rather than natural approaches. This is because of the way the economic regulation of their physical asset base works. It is much easier to solve once a whole-catchment approach is taken, but much harder when the water companies are regulated in a silo and neither benefit from the impacts on biodiversity of natural capital approaches, nor face the costs of their activities on the catchment as a whole. In order to get a better environmental and economic system, the water companies need to be brought directly into the catchment system economics. Below I explain how this can be done.⁸

Towns, housing, roads and sustainable drainage systems

Housing, concreted urban centres and roads bring further pollution and flooding problems to rivers, and they are as much a part of the catchment and its management as the farmers and the water companies. Run-off from roads is often nasty and fast, and housing and factories displace water that would otherwise have soaked into the ground, to be gradually absorbed. Towns and villages were traditionally built to have access to water, and they are often built right up to the riverbanks, which are in turn concreted over and reinforced. The houses and infrastructure reduce the ability of their land areas to absorb rainfall, and increase the speed and rate of run-off.

The solution here is better planning, regulation and pricing. Planning needs to steer development away from floodplains and to require porous roads and driveways to reduce run-off. Better still, unpaved and unconcreted driveways can be planted to encourage biodiversity. Plants absorb water too. The costs of the run-off need to be incorporated into the economics of new developments, thereby creating an incentive to build houses in the right places, and with the right porous green footprints.

Like the mining and the abstraction along rivers, the economic incentives on house-building produce perverse environmental outcomes. Flood insurance should reflect the risk of flooding, but it doesn’t. Instead the flood risk is socialised, so that house prices do not fully capitalise this risk. If others pay some of the costs for locating near a river that floods, more houses will be built in the wrong places. Even worse, the Environment Agency prioritises reducing the risk of flooding to those most at risk. You buy a house in the wrong place, you get your flood risk insurance subsidised (through schemes like Flood Re), and then public money is spent on protecting you.⁹

Town populations have other great economic interests in the state of the rivers. Rivers are an immediate source of leisure for them, and they need access to the clean water. Green banks and riversides bring wider physical and mental benefits too. Many benefit from the tourism that rivers bring. Towns like Ross-on-Wye, Hay-on-Wye, Lechlade, Eynsham and Carlisle all have significant leisure industries and the associated services. The tourism is often more economically important than agriculture, and hence the economics points to an enhanced river environment.

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