Green and Prosperous Land. Dieter Helm

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 were to cost in excess of £56 billion and Crossrail 2, say, £25 billion, think what more than £80 billion of environmental enhancements might look like in comparison. Add in some all-too-predictable cost overruns and these two projects will cost well 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