2. • …are crucial to good governance - providing the
architecture within which policy is shaped and decisions
are made
• But are they fit for purpose?
• Do they have the right objectives / duties to deliver what matters?
• Are they structured / resourced to be able to operate effectively?
• Do they work in a coherent way towards a common set of long-
term, cross-government objectives on the environment?
• Do they adopt long-term, systemic and innovative thinking (e.g.
around future generations, economic risk, international linkages)?
• Are they transparent and participatory in the way they operate?
• Are they effectively scrutinised and held accountable?
Our government institutions…
4. HM Treasury strongly influences the
environment via:
• Controlling all aspects of public spending
• Overseeing long-term economic policy
• Influencing private investment flows
• Ownership of / influence over decision-
making rules by which all government
policies are evaluated (HMT Green Book)
• Administration of the property portfolio of
the Crown Estate (CE is part of HMT)
Why is Treasury important?
5. HMT’s structure / duties:
• Short-term financial vs long-term economic priorities
• No duty to consider links between economy / environment
• Lack of independent scrutiny
Decision-making tools/approaches:
• GDP poor indicator of economic progress
• Natural capital not measured / accounted for
• Policy appraisal models / tools weak on environment
(Green Book, CGE, CBA etc)
Policy:
• No clear long-term, sustainable economic policy / strategy
• Over-reliance on markets
• Wrong incentives (perverse subsidies etc)
• Lack of investment in ‘natural infrastructure’
However…
6. “.. to be the 1st generation to leave the environment in a
better state than it inherited” (HMG, 2011)
“The government should:
• fully incorporate natural capital costs/benefits into
decision-making tools”
• maintain and invest in natural assets through a
systematic programme of capital investment”
• incentivise private investment in nature”
• incorporate natural capital into National
Infrastructure Plan” (NCC, March 2014)
Change is happening
7. …become a force for sustainable development if…
• New long-term, cross-government environmental objectives
• New independent arms-length body to scrutinise HMG
environmental performance
• HMT ministerial post responsible for long-term sustainability
• Economic / fiscal policy geared towards future well-being
• UK ‘balance sheet’ (accounting for natural capital)
• Long-term, credible sustainable economic plan
• Evidence, tools and approaches to account for nature
• Integrate natural capital into budget and infrastructure plan
• Re-calibrate incentives to drive private sector investment
Treasury could…
8. • Challenge the rules but make use of the Treasury we have
• Balance outsider/campaign tactics with insider/constructive
solutions-based engagement
• Present solutions/proposals that resonate with Treasury’s
interests:
• economic growth, risk reduction, debt reduction, jobs etc)
• are fiscally-neutral or ideally generate tax / revenue
• tackle key issues/political agendas (e.g. flooding, carbon/energy,
water scarcity, rural growth etc)
• increase the coherence of decision-making across government
(e.g. via improved modelling, decision-making frameworks etc)
• help HMT to help wider government meet existing commitments
(e.g. environmental targets, improve health etc)
• Secure support from businesses / investors (joint
advocacy)
What can the conservation movement do?
9. 03 July 2014 Toby Roxburgh 9
Thank you
“We need to have a conversation about the
budget” (Ian Bateman, UKNEAFO launch)
“The budget position,
after having taken into
account investment in
maintaining natural
capital is….”
Editor's Notes
Effective government institutions are crucial to good governance - providing much of the architecture within which policy is shaped and decisions are made.
But are they fit for purpose?
Do they have the right objectives / duties to deliver what matters?
Are they structured / resourced to be able to operate effectively?
Do they work in a coherent way towards a common set of long-term, cross-government objectives on the environment?
Do they adopt long-term, systemic and innovative thinking (e.g. around future generations, economic risk, international linkages)?
Are they transparent and participatory in the way they operate?
Are they effectively scrutinised and held accountable?
Most of us would probably agree things are not perfect – and there’s much we need to improve.
Whilst things aren’t quite as bad as they are in the Ukrainian parliament – we’ve a pretty dysfunctional government when it comes to integrated, sustainable thinking….
But what of the role of Treasury – an area Chris asked me to delve into a bit more deeply?
Well Treasury influences the environment in many ways, for example:
Control all aspects of public spending. It has a unique ability to influence all areas of government policy because it ‘holds the purse strings’ for all departments. As an associate at FoE put it “If HMT backs a policy, that policy will probably happen; if it does not, it will almost certainly not”.
It’s control of UK economic policy influences how we use and protect natural resources in many ways – e.g.
by defining how we measure growth (GDP)
via policies on infrastructure development / investment (e.g. on renewables) o IUK being a team within Treasury that has a direct say on the future infrastructure pipeline in the UK
It is also responsible for a swath of taxes, subsidies and other market-based policy measures, which have a huge bearing on consumption, production and land-use within the market.
HMT also ‘owns’ the decision-making rules (HMT Green Book) by which all new government policies are evaluated, including the types of costs/benefits considered (which currently is weak on nature)
HMT also administers the property portfolio of the Crown Estate (CE is part of HMT) which includes urban and rural areas, around half of the foreshore and almost the entire seabed around the UK.
In terms of whether it’s fit for purpose – we feel there are one or two areas of improvement needed within the institution that is Treasury – eg:
HMT’s structure / duties:
HMT is both finance and economics ministry. This creates tensions, as balancing the books in the short-term tends to undermine delivery of truly sustainable long-term economic growth (because in many instances this requires accepting short-term costs for long-term gain). There is a perception that HMT stifles innovation and strategic thinking as a result. Most other developed economies separate their economics and finance departments.
No duty – or the means - to consider or publically report on links between economy / environment.
No ministerial post with the role of ensuring Treasury considers issues around sustainability and natural capital.
Lack of independent scrutiny.
Decision-making tools/approaches:
Overreliance on GDP – a poor indicator of economic progress and potential – an issue we probably all agree on.
Natural capital not measured / accounted for – at least yet, though progress is being made in this area.
Policy appraisal models / tools weak on environment (Green Book, CGE, CBA etc)
Policy:
No clear long-term, sustainable economic policy / strategy
Over-reliance on markets
Wrong incentives (perverse subsidies etc) – which do not always incentivise goods and disincentivise bads
Lack of investment in ‘natural infrastructure’ – despite the fact that nature provides vital services to the public like other forms of infrastructure, and all for free, assuming we use it at the right level!
Thankfully – change is happening…
There is a rapidly growing constituency of support around the need to mainstream nature’s value - for ambitious long-term thinking, recalibration of priorities and objectives, new tools/frameworks for decision-making, collection of more evidence – and, potentially, for institutional reform.
Treasury could become a force for sustainable development if it:
Was acting within the context of a new legal framework - including long-term cross-government objectives on sustainable development and restoration of nature – perhaps delivered via reformed, permanent, statutory Natural Capital Committee
Was held to account by another, separate new arms-length body that had the legal teeth to trigger parliamentary recourse if targets weren’t met
Had a ministerial post responsible for long-term sustainability – and the resources / capacity to support them
Had a duty to ensure economic / fiscal policy was geared towards future well-being – moving beyond GDP
Had a duty to report publically - alongside the budget - on the UK ‘balance sheet’ and future economic outlook, taking into account natural capital stocks, and associated future risks and liabilities.
Adopted a long-term plan for delivery – based on an ‘invest today to save money tomorrow’ approach - moving away from short-term financial priorities that too often act as a barrier to long-term sustainable policies
Had the evidence and tools to take nature into account, and justify to the public why investing in nature is in the public interest.
Integrated ‘natural capital’ investment requirements into the budget and infrastructure plan – ludicrous that nature not even mentioned! And that Nat Infrastructure Pipeline = £370bn (£100bn public) vs. Defra’s budget of <£3bn year
Re-calibrate incentives to drive private sector investment in natural and low-carbon assets
What can the conservation movement do? We feel we have a vital role to play, to help transform the economic and financial decision-making for the good of environment and future generations.
We do think there’s a balance here though – much as we bemoan the influence of Treasury, imagine what an ally it could become if it had the remit, evidence, tools, and shared outlook to help restore nature – using it’s cross-governmental influence in a constructive way. There’s definitely an argument for working with what we’ve got - whilst challenging the rules over the longer term.
We also need to balance being critical and challenging - publically if needed - with being relationship-based, and offering solutions.
We think there’s a strong case for helping Treasury to see for itself that investing in nature is in its own interests.
To do this – we might present solutions that - for example demonstrate how investing in nature can help:
secure economic growth, reduce risks, jobs etc
are fiscally-neutral or ideally generate tax / revenue
tackle key issues/political agendas (e.g. flooding, carbon/energy, water scarcity, rural growth etc)
help HMT to help wider government meet existing commitments (e.g. environmental targets, improve health etc)
The UKNEA work on forests is a great example – there’s already a clear case for investing whole scale in new forests in close proximity to towns and cities, to improve health and recreation – and that’s based on Treasury’s own existing rules! There’s good existing evidence in other areas to – from fisheries to river catchments. We now need action.
It is also vital – we feel – to continue to articulate private sector support for our asks. Investing in nature makes commercial sense too. And we know how closely Treasury listens to business.
WWF is committed to pushing this area forward – working with others in the movement. We’re also pushing forward specific work around, for example:
Treasury advocacy - an EAC inquiry into Treasury’s sustainability is still a possibility, we’re planning parliamentary events around Natural Capital, and continue to engage on issues around the 4th carbon budget
Supporting the Nat Cap Committee, especially around their 25 year plan – eg. integrating our thematic work on marine, freshwater, forests etc, including our work with corporate partners
We’re also anticipating a strong push around the 2015 budget – something I’d be keen to talk to others about
We’re also engaging heavily in the party manifesto process, supported by research around institutional / legal options for mainstreaming the environment into government.
So, busy times – and we look forward to working with like minds.
We might be a long way from the Chancellor announcing new measures on nature in his budget – but we’re confident his successors will, and are committed to making sure this happens sooner rather than later.
