Green and Prosperous Land. Dieter Helm

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