Institutional contextTransforming economic decision-making for

conservation gains

WWF-UK

2nd July 2014

Toby Roxburgh

(Economics Adviser)

• …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…

The institutional dimension…

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?

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…

“.. 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

…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…

• 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?

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….”