Developing a new approach to how we value and price environmental public goods

Banner image: Ashridge Forest viewed from Ivinghoe Beacon Hills, Buckinghamshire, UK | The Flowering English Countryside

Reported by Alex Wendland, CSaP Policy Intern

CSaP worked with the Department for Environment, Food & Rural Affairs to organise a Policy Workshop to explore the challenges associated with the design of England’s new Environmental Land Management system, which will come into effect after the UK leaves the European Union.

The new Environmental Land Management (ELM) system will pay for the provision of environmental public goods in lieu of a market. It will be up to land managers to decide what types of goods they want to produce, in what proportion and how they do this. For this approach to be consistent with delivering the benefits which citizens want – nationally and locally – there are challenges to develop a new approach to how we value and price environmental public goods.

Until now, the UK has been subject to the rules of the EU’s Common Agricultural Policy (CAP). The main function of CAP was to provide direct payments to farmers based on how much land they used to produce agricultural goods.

CAP is the main expenditure of the EU and is criticised for causing considerable environmental damage. When the UK leaves the EU (expected to be 2021) it has an unprecedented opportunity to reinvent the way we manage our land and restore the environment.

The ELM system is part of the Government’s 25 Year Environmental Plan aimed at increasing biodiversity, protection from and mitigation of hazards, and tackling climate change. An ELM will be a voluntary scheme that pays for environmental outcomes such as clean water and air, development of natural landscapes, and ecological restoration.

“This is a policy area on which I hope we can be very optimistic. Whatever our views about Brexit, this is a wonderful opportunity for us to do something positive in an area on which I know everyone here feels very passionately.” Dame Helen Ghosh

The workshop, chaired by Dame Helen Ghosh, brought together participants from academia, government, industry, and the charitable sector, reflecting the multifaceted issues faced in designing the ELM to address some of the big questions currently being faced by policymakers such as:

• How do we understand the benefits we gain from the natural environment – in particular extending to health, wellbeing, recreation, leisure, spiritual and other vital, but hard to value, benefits?
• How do we use this to practically assign values for different environmental goods and services, in particular places, times and contexts?
• How do we use these values to determine what we should pay for those goods, in particular places, times and contexts, to make the most of the limited funds available?

Internationally, ELMs have existed for a decade and England is well set up to support such a scheme with world-renowned leaders in ecology monitoring, good scientific infrastructure, and an engaged public body. There are exciting opportunities to use recent developments in satellites and big data to support the ELM.

One of the major recurring themes at the workshop was to marry local and national needs in the design of the ELM, ensuring national policy is locally appropriate and deliverable[i].

Moving away from CAP – a policy that supports farmers with standard payments – towards the ELM – which provides variable income based on outcomes – would be a sizable shift in the business structure of many farmers.

Participants of this workshop were hopeful that the ELM will advantage those who think forwardly about reviving the environment instead of thinking only about commodities. Restoring landscapes however is unlikely to be achievable by any one individual, so people will need to work as collectives and this will have to be reflected in the ELM.

[i] To read more on how to make environmental policy locally appropriate, empowering and deliverable, see the report from a previous CSaP Policy workshop here.