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

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

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)

timber drugs clean water aesthetics shelter capital stock of soil and treesflows from stockbenefits or services Stocks and flows

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. ‘In effect, 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

What has the NCC been set up to do? NCC Independent Advisory Body to Government Provide advice on when, where and how natural assets are being used unsustainably 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. Advise the Government on research priorities to improve future advice and decisions on protecting and enhancing natural capital AUDIENCE: Senior ministers and civil servants, reports to Economic Affairs Committee of the Cabinet

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

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

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

Natural Assets Species Ecological Communities Soils Freshwater Land Atmosphere Minerals Sub-soil Assets Coasts Oceans Major land-use categories (NEA Broad Habitat Types) Ecosystem Services Goods Food Fibre (inc. Timber) Energy Clean water Clean air Recreation Aesthetics Hazard protection Wildlife Equable climate Benefits (Values) Other capital inputs 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

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

Tracking natural capital changes

Data on natural capital

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

Current status of natural assets

Summary of findings Asset Significant monitoring issues or data gaps Species Current focus is on rare species or certain groups. Uncharismatic and difficult to identify taxa are currently underrepresented (many of these are important for key ecological processes). Ecological communities Current focus is on habitats which may be a good proxy for the structural components of ecological communities but our understanding of the link to processes and interactions is less well developed. Soils Currently no systematic soil survey across the UK. Data on soil depth limited and biological elements poorly represented. Land Monitoring is confounded by poor definition and delineation of this asset. Some aspects may combine elements of built capital (landscape). Minerals and sub-soil assets As non-renewable assets a different approach is required to determine status. Current data are for production volumes and estimates of the size of asset base. Freshwater Small water-bodies (ponds, lakes, ditches and headwaters) are currently underrepresented in the current monitoring network. Coasts Current monitoring focuses on the aquatic elements of the coastal system, habitat data provides some information on more terrestrial components but has limitations (see ecological communities). OceansLarge areas of sea-bed are unmapped. AtmosphereCurrent emphasis is on monitoring air pollution i.e. impact upon the asset rather than overall status.

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?

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.

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.