Measuring and monitoring natural capital

1. Measuring and monitoring natural capital Stewart Clarke Natural England & Natural Capital Committee Secretariat

2. Outline • What is natural capital and why does it matter? • The Natural Capital Committee • Measuring and monitoring natural capital • Data gaps and recommendations

3. Defining Natural Capital Natural Capital : the stock of our physical natural assets (such as soil, forests, water and biodiversity) which provide flows of services that benefit people (such as pollinating crops, natural hazard protection, climate regulation or the mental health benefits of a walk in the park) (Natural Environment White Paper, 2011) 1) produced or manufactured capital (roads, buildings, machines) 2) human capital (health, knowledge, culture and institutions) 3) natural capital (available from nature) http://www.forumforthefuture.org/project/five-capitals/overview#sthash.Xmo2hc70.dpuf

4. Stocks and flows capital stock of soil and trees flows from stock benefits or services timber drugs clean water aesthetics shelter

5. The problem: state of natural capital stocks There is a growing body of evidence to suggest that natural capital stocks have been and continue to be degraded: MEA 2005: Nearly two thirds of the services provided by nature to humankind are in decline worldwide. ‘Ineffect, the benefits reaped from our engineering of the planet have been achieved by running down natural capital assets’ UK National Ecosystem Assessment concluded that although UK ecosystems are currently delivering some services well, others are in long-term decline

6. What has the NCCbeen set up to do? NCC Independent Advisory Body to Government 1 3 2 Provide advice on when, where and how natural assets are being used unsustainably Advise the Government on research priorities to improve future advice and decisions on protecting and enhancing natural capital. Advise the Government on how it should prioritise action to protect and improve natural capital, so that public and private activity is focused where it will have greatest impact on improving wellbeing in our society. AUDIENCE: Senior ministers and civil servants, reports to Economic Affairs Committee of the Cabinet

7. Who is on the Committee? Dieter Helm (Chair) Giles Atkinson Kerry ten Kate NCC Secretariat Ian Bateman Georgina Mace Rosie Hails Robin Smale Colin Mayer

8. Outputs and timeline... Second State of Natural Capital report to EAC Third State of Natural Capital report to EAC First State of Natural Capital report to EAC Research Priorities advice Advice to SoS on CAP reform Advice to SoS on biodiversity offsets Case studies on corporate accounting May 12 Jan 13 Advice to SoS on CAP reform Jan 14 Jan 15 Research report on metrics and risk register Advice to SoS on valuing non-market benefits from woodlands Advice to SoS on Habs Regs review Working paper: metrics for natural capital Working paper: economic growth?

9. An illustration – Lower Yangtze Basin RS = Regulating services index – biodiversity, sediment regulation, soil stability, sediment quality, water quality, air quality (Dearing et al., 2012)

10. Other capital inputs Natural Assets Species Ecological Communities Soils Freshwater Land Atmosphere Minerals Sub-soil Assets Coasts Oceans Major land-use categories (NEA Broad Habitat Types) Goods Food Fibre (inc. Timber) Energy Clean water Clean air Recreation Aesthetics Hazard protection Wildlife Equable climate Benefits (Values) Ecosystem Services Ideally we need metrics linking assets directly to changes in goods and benefits but data gaps on status of assets are significant. No metrics exist. Dispersed, interconnected & dynamic

11. Thresholds, targets and limits Target Safe Limit Threshold Reference level Target Benefit Value (£) Benefit Value (£) Safe limit Threshold Natural asset condition time

12. Tracking natural capital changes

13. Data on natural capital

14. UK Species Data Key: Red – limited suitable data; Amber – data inconsistently collected across components, time or space; Green – good data at appropriate spatial or temporal scales

15. Current status of natural assets

16. Summary of findings

17. Aggregation and Composite Indicators • Reporting on status and trend can be complex – we need simple records of change • Need to be able to aggregate assets and components of assets • Composite metric: a single measure which combines a range of condition measures to provide an overall summary of state or condition • Simple and ideal for communication but can hide problems or trends in specific components • How do you combine different components? What weights should be applied?

18. Conclusions • Long history of data collection in UK – voluntary and statutory • To monitor and make informed decisions about natural capital may require different types of data • We have enough data to give some indication of status/trend; for most assets this generally only provides a partial picture • Tendency to measure structural aspects of assets rather than processes and underlying functions. (Many benefits are driven by those processes) • In addition to plugging data gaps, we need to be able to aggregate measures for different assets and components to provide an overall status assessment.

19. Acknowledgements Natural Capital Committee members (Georgina Mace, Rosie Hails) Julian Harlow (Natural Capital Committee Secretariat) The review of existing data sources was led by Lindsay Maskell (Centre for Ecology and Hydrology); the results of this review can be viewed on the Natural Capital Committee website. www.naturalcapitalcommittee.org