The countryside is dying – markets can save it

We are losing our green and pleasant land. From rare temperate rainforests, to winding chalk streams, to precious peatlands, what makes our countryside English is slowly diminishing.

Sam Hall | Director

Since Edmund Burke, a key plank of conservative philosophy has been the responsibility we have to steward and hand on what we have had the privilege to enjoy to future generations.

As the Conservative Party continues its journey of renewal in opposition, a revitalised vision for our relationship with nature is needed. 

Fortunately, the Conservative Environment Network’s Kitty Thompson’s latest paper, ‘Paradise Regained’, provides the intellectual roadmap, rooted in conservative principles, to guide the next stages of the party’s policy development.

It argues that the conservative goal of being good stewards of our natural inheritance must be achieved through conservative means.

After all, the state does not have sufficient resources to foot the bill for turning the tide on nature’s decline. Nor is the work of building back lost species and habitats best undertaken by government quangos. Private enterprise must become our ally in the recovery of our natural world, defying the left-wing fallacy that capitalism is the enemy of the environment. And by reforming environmental regulations to unleash private investment for nature’s restoration, we must also accelerate the delivery of much-needed infrastructure and housing. 

CEN’s paper proposes an authentically conservative solution: natural capital markets. These work with the rules of economics, rather than ignoring them. They represent a practical, scalable and efficient response to the challenge of biodiversity loss. By turning nature into a recognised asset, these markets are creating a mechanism through which biodiversity can be measured, valued, invested in, traded and ultimately restored. 

Some environmentalists recoil at the notion of ‘putting a price on nature’, but conservative environmentalists should not. While there is no doubt something spiritual and sacred about nature, this is ultimately about recognising the economic value of our natural environment. Without it, nature will continue to be valued at zero, ignored and starved of the investment it needs to recover. 

Free markets do need some rules, and the government has an important role in setting a framework for natural capital markets too. Strong standards will help convince investors to put their money into natural capital assets. And market rules will clarify when land managers are allowed to stack multiple credits generated by the same parcel of land, so the same projects aren’t double counted. 

But once robust governance arrangements are in place, government can get out of the way. Ministers should designate private sector bodies to accredit and monitor projects, using the rigorously designed nature credit standards developed by the British Standards Institute. 

The final piece of the puzzle is to boost market demand by expanding the number of potential buyers of nature credits. Currently, only a few forward-thinking companies take nature seriously. For these markets to develop at scale, more businesses must be encouraged to value nature. Demand for credits could be stimulated, for instance, by requiring listed companies to monitor harms to biodiversity across their operations and supply chains. It is however essential that any new requirements are integrated with other environmental reporting duties, to minimise compliance costs.

There are positive economic gains from this approach too. Establishing the UK as a leader in natural capital is both an opportunity for UK financial services firms who will operate these markets, and an opportunity for rural businesses, who will generate the credits. Liquid natural capital markets will make it both cheaper and more predictable for businesses to discharge environmental obligations like biodiversity net gain, lowering the cost of building much-needed new homes.

This is not about adding more regulation – it is about less but better regulation. Legacy EU environmental rules, which are delivering too little nature and too few homes, desperately need to be overhauled. Rather than the current site-by-site approach that led to the £216 million ‘bat tunnel’ for HS2, we need a strategic approach to mitigating biodiversity harms. These reforms would both unlock more demand for nature credits and expedite planning for infrastructure and homes.

By favouring a system which lets the market do the heavy lifting, we can end the dominance of public money to fund nature recovery and prop up our rural economy. And by streamlining regulation we can create new opportunities for private capital, unlocking more growth, cheaper infrastructure and more nature.

Natural capital markets are not just a pragmatic solution to end our addiction to spending public money, they are a deeply conservative means of allowing us to meet the terms of our intergenerational contract. Kitty Thompson’s ‘Paradise Regained’ shows us the way to unleash their potential.

First published by CapX. Sam Hall is Director of CEN.