WWF-UK is calling on the Chancellor to put a natural capital ‘stress test’, which highlights the potential risks the economy faces from environmental damage, at the heart of the Budget.
Evidence shows that economic costs of neglecting our natural assets can no longer be ignored:
- Mismanagement of river catchments is a major contributing factor to flooding, which is estimated to have cost the UK at least £5 billion this winter alone.
- The economic value of the eﬀect of small particulate (PM2.5) pollution on mortality in the UK was around £16 billion in 2008 alone, equivalent to 29,000 premature deaths.
- £1.4 billion additional annual UK revenues could be expected if UK ﬁsh stocks recovered to the average levels seen before the 1970s.
WWF UK’s Greener Budget, published today, outlines how the Treasury could use the new ‘stress test’ to assess, for example, the consequences for business productivity should water stress worsen in drier areas of the UK such as the south east – and propose remedial action to be undertaken by government departments.
WWF also proposes that a business-focussed Natural Capital Task Force is needed to identify how the private sector can lead better management of natural resources, incentivising innovation and investment in a business-friendly way. It is calling on the Chancellor to legislate for climate and natural capital-related financial risk disclosures by financial companies, on a mandatory comply or explain basis.
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Trevor Hutchings, Director of Advocacy at WWF-UK, said “George Osborne recently spoke of an economic ‘cocktail of threats’ related to short-term falls in commodity prices and stock markets – and yet he’s said little of the trinity of longer-term risks posed by environmental degradation, resource scarcity and climate change.
“The Chancellor should use the Budget to report on the contribution that the natural environment makes to the UK economy, the risks to businesses and individuals associated with environmental damage, and the measures needed to maintain the healthy natural environment upon which our prosperity depends.”
WWF Ambassador Lord Adair Turner said “In the wake of the Paris agreement, and with the impact of climate change on homes and businesses becoming impossible to ignore, creating a green economy through smarter use of taxes and targeted public spending should be a far higher priority for government. Free markets won’t deliver this on their own. The Treasury needs to take a hard look at how we can use all available policy levers to drive this change, starting with this year’s budget.”
Research conducted for the government’s Natural Capital Committee suggests that investments in natural capital – including the adaptation of England’s farmland to provide a range of benefits from peatlands, forests, grasslands, as well as restoring fish stocks – would generate economic benefits worth over £9bn over 50 years – two to three times larger than the investment costs involved.