Natural capital approaches for the optimal design of policies for nature recovery.

By embedding a spatially explicit ecosystem services modelling tool within a policy simulator we examine the insights that natural capital analysis can bring to the design of policies for nature recovery. Our study is illustrated through a case example of policies incentivising the establishment of new natural habitat in England. We find that a policy mirroring the current practice of offering payments per hectare of habitat creation fails to break even, delivering less value in improved flows of ecosystem services than public money spent and only 26% of that which is theoretically achievable. Using optimization methods, we discover that progressively more efficient outcomes are delivered by policies that optimally price activities (34%), quantities of environmental change (55%) and ecosystem service value flows (81%). Further, we show that additionally attaining targets for unmonetized ecosystem services (in our case, biodiversity) demands trade-offs in delivery of monetized services. For some policy instruments it is not even possible to achieve the targets. Finally, we establish that extending policy instruments to offer payments for unmonetized services delivers target-achieving and value-maximizing policy designs. Our findings reveal that policy design is of first-order importance in determining the efficiency and efficacy of programmes pursuing nature recovery. This article is part of the theme issue 'Bringing nature into decision-making'.

Does local Natural Capital Accounting deliver useful policy and management information? A case study of Dartmoor and Exmoor National Parks.

Natural capital accounting provides a systematic framework through which to quantify the benefits of natural assets. National-scale applications have demonstrated the feasibility of developing such accounts and their value as a tool to support environmental policy and management decisions. Building on that success, there have been increasing calls for sub-national organisations (for example, protected area authorities and water companies) to develop their own natural capital accounts. As we document in this paper, recent efforts by local organisations in the UK to produce such accounts have tended to rely on a set of 'standard practice' methods, many borrowed directly from national natural capital accounting exercises. In this paper, we review those methods and apply them in producing natural capital accounts for two UK National Parks. Working with the National Park Authorities, we critically assess the usefulness of those accounts to inform local land management. On account of data gaps and significant sensitivity to methodological assumptions, our research shows that these local accounts are considered of limited practical use for land management decision making at a local scale. Through specific illustrative examples, we show that natural capital accounts for local decision-making can be improved through: the inclusion of fit-for-purpose data and valuation methods, the consideration of uncertainties, and the incorporation of ecological information and spatial aspects. We also highlight the need for the development of both standardised guidelines and readily-available tools to quantify and value ecosystem services.

Combined carbon and health taxes outperform single-purpose information or fiscal measures in designing sustainable food policies.

The food system is a major source of both environmental and health challenges. Yet, the extent to which policy-induced changes in the patterns of food demand address these challenges remains poorly understood. Using a survey-based, randomized controlled experiment with 5,912 respondents from the United Kingdom, we evaluate the potential effect of carbon and/or health taxes, information and combined tax and information strategies on food purchase patterns and the resulting impact on greenhouse gas emissions and dietary health. Our results show that while information on the carbon and/or health characteristics of food is relevant, the imposition of taxes exerts the most substantial effects on food purchasing decisions. Furthermore, while carbon or health taxes are best at separately targeting emissions or dietary health challenges, respectively, a combined carbon and health tax policy maximizes benefits in terms of both environmental and health outcomes. We show that such a combined policy could contribute to around one third of the reductions in residual emissions required to achieve the United Kingdom's 2050 net-zero commitments, while discouraging the purchase of especially unhealthy snacks, sugary drinks and alcohol and increasing the purchase of fruit and vegetables.

The Value of Greenspace Under Pandemic Lockdown.

The COVID-19 outbreak resulted in unprecedented restrictions on citizen's freedom of movement as governments moved to institute lockdowns designed to reduce the spread of the virus. While most out-of-home leisure activities were prohibited, in England the lockdown rules allowed for restricted use of outdoor greenspace for the purposes of exercise and recreation. In this paper, we use data recorded by Google from location-enabled mobile devices coupled with a detailed recreation demand model to explore the welfare impacts of those constraints on leisure activities. Our analyses reveals evidence of large-scale substitution of leisure time towards recreation in available greenspaces. Indeed, despite the restrictions the economic value of greenspace to the citizens of England fell by only £150 million over lockdown. Examining the outcomes of counterfactual policies we find that the imposition of stricter lockdown rules would have reduced welfare from greenspace by £1.14 billion. In contrast, more relaxed lockdown rules would have delivered an aggregate increase in the economic value of greenspace equal to £1.47 billion.

How Property Markets Determine Welfare Outcomes: An Equilibrium Sorting Model Analysis of Local Environmental Interventions.

This paper examines the pivotal role played by property markets in determining the magnitude and distribution of welfare changes resulting from localised environmental change. We address that issue using an equilibrium sorting model (ESM) calibrated, by way of example, to the circumstances of a road infrastructure project in the English town of Polegate. Previous ESM research has tended to assume that all households rent property from a fixed property stock. The narrative that arises from those models concerns environmental gentrification, wherein access to environmentally improved locations is appropriated by the relatively wealthy through their ability to out-compete the less wealthy in the rental property market. Our research shows that to be only part of a much more complex story. We develop a model that extends the sophistication with which ESMs replicate property market dynamics, allowing for households to choose whether to rent or purchase their home and introducing greater realism into housing supply responses to changing market conditions. Our research shows that property markets redistribute welfare gains across the population in complex ways in which tenure choice and housing supply constraints play central roles.

Spatially explicit integrated modeling and economic valuation of climate driven land use change and its indirect effects.

We present an integrated model of the direct consequences of climate change on land use, and the indirect effects of induced land use change upon the natural environment. The model predicts climate-driven shifts in the profitability of alternative uses of agricultural land. Both the direct impact of climate change and the induced shift in land use patterns will cause secondary effects on the water environment, for which agriculture is the major source of diffuse pollution. We model the impact of changes in such pollution on riverine ecosystems showing that these will be spatially heterogeneous. Moreover, we consider further knock-on effects upon the recreational benefits derived from water environments, which we assess using revealed preference methods. This analysis permits a multi-layered examination of the economic consequences of climate change, assessing the sequence of impacts from climate change through farm gross margins, land use, water quality and recreation, both at the individual and catchment scale.

Bringing ecosystem services into economic decision-making: land use in the United Kingdom.

Landscapes generate a wide range of valuable ecosystem services, yet land-use decisions often ignore the value of these services. Using the example of the United Kingdom, we show the significance of land-use change not only for agricultural production but also for emissions and sequestration of greenhouse gases, open-access recreational visits, urban green space, and wild-species diversity. We use spatially explicit models in conjunction with valuation methods to estimate comparable economic values for these services, taking account of climate change impacts. We show that, although decisions that focus solely on agriculture reduce overall ecosystem service values, highly significant value increases can be obtained from targeted planning by incorporating all potential services and their values and that this approach also conserves wild-species diversity.

The market triumph of ecotourism: an economic investigation of the private and social benefits of competing land uses in the Peruvian Amazon.

Annual revenue flow to developing countries for ecotourism (or nature-based tourism) could be as large as US$ 210×10(12), providing an enormous financial incentive against habitat loss and exploitation. However, is ecotourism the most privately and/or socially valuable use of rainforest land? The question is rarely answered because the relevant data, estimates of profits and fixed costs, are rarely available. We present a social cost-benefit analysis of land use in an ecotourism cluster in the Tambopata region of Amazonian Peru. The net present value of ecotourism-controlled land is given by the producer surplus (profits plus fixed costs of ecotourism lodges): US$ 1,158 ha(-1), which is higher than all currently practiced alternatives, including unsustainable logging, ranching, and agriculture. To our knowledge, this is the first sector-wide study of profitability and producer surplus in a developing-country ecotourism sector and the first to compare against equivalent measures for a spectrum of alternative uses. We also find that ecotourism-controlled land sequesters between 5.3 to 8.7 million tons of above-ground carbon, which is equivalent to between 3000-5000 years of carbon emissions from the domestic component of air and surface travel between the gateway city of Cusco and the lodges, at 2005 emission rates. Ecotourism in Tambopata has successfully monetized the hedonic value of wild nature in Amazonian Peru, and justifies the maintenance of intact rainforest over all alternative uses on narrow economic grounds alone.