March 20th 2024: It was a pleasure to give evidence to the Environmental Audit Committee’s inquiry into the Role of Natural Capital in the Green Economy. A lot of the discussion centred on the recently launched Biodiversity Net Gain policy of the UK Government. My key points:

- Much is made of the incipient implementation efforts of TNFD, but transparency can only be a first step and will not miraculously lead to investment decisions by corporates or any real positive results for nature. This is obvious but it is curious how often disclosure measures seem to be talked about as an end in themselves rather than a first step. Policymakers should make TNFD mandatory, but they should do so much more.

-So, what can the Government do? They can provide incentives. The UK Government knows this very well and is already exploring a range of measures to entice farmers to convert part of their land to nature-friendly activities. There is no need to let this become a battle between food production and nature: we can do both and should continue testing schemes which encourage such co-production (the Wood Pasture funding option of the Countryside Stewardship Scheme seems promising, for example).

-How about the role of private investments? Historically governments have been the guardians of nature (not very good guardians one may add, but be that as it may, some 85% of funding for nature has traditionally come from governments). There are reasons for this, which have to do with the suitability of nature as a publicly managed asset, and while there are areas where we will and should seek private investments they are not going to be predominant.

- A final point on the role of markets: International evidence on the effectiveness of biodiversity offset markets is very mixed and indeed show predominantly poor success rates (20-30%) in achieving these markets’ objectives (see for example Study 1 and Study 2). I brought up this point to underline the crucial role monitoring and evaluation will have to play in BNG and other markets going forward. And to – again- temper expectations of what we can expect from these new markets.

The recording of the session can be found here.