Natural Capital Committee

Natural Capital - The Great Fen Project

The Natural Capital Committee (NCC) is an independent body set up in 2012 to advise the UK Government on how to ensure England’s ‘natural wealth’ is managed efficiently and sustainably. Natural capital is a broad term that refers to those elements of nature that are valuable to people, including minerals, water, trees and wildlife.

The Secretary of State for the Department for Environment, Food and Rural Affairs, Owen Paterson, described his ambition for the natural environment and how the work of the Committee fits into this at the first public NCC event in November 2012: “I do not, however, just want to maintain our natural assets; I want to improve them. I want us to derive the greatest possible benefit from them, while ensuring that they are available for generations to come. This is what the NCC’s innovative work is geared towards”.

What does the NCC do?

The NCC’s role is broadly to advise the UK Government on how to ensure England’s ‘natural wealth’ is managed efficiently and sustainably, thereby unlocking opportunities for sustained prosperity and wellbeing.

The Committee has three Terms of Reference:

  1. to provide advice on when, where and how natural assets are being used unsustainably;
  2. to 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; and,
  3. to advise the Government on research priorities to improve future advice and decisions on protecting and enhancing natural capital.

The NCC's main form of advice to Government is in the form of annual reports to Government, containing a series of recommendations on what it thinks needs to be done to put the economy on a sustainable footing (as far as the environment is concerned).

In addition to these annual reports to Government, the Committee is also involved in natural capital accounting, both at the national and corporate levels. At the national level, it is working with the UK's Office for National Statistics and the Department for Environment, Food and Rural Affairs to help incorporate natural capital into the national accounts. At a corporate level, the Committee is currently developing and testing a new framework for corporate natural capital accounting to go alongside traditional financial accounts. The aim of this project is to work with a small group of organisations to pilot corporate natural capital accounts and then use the lessons from the pilots to produce high level guidance and a template account which will be useful for other organisations to follow and use. It will also use the lessons from this work to help inform its advice to Government.

The Committee also provides ad hoc advice to Government when requested. As of April 2014, it had provided advice on forestry, reform of the Common Agricultural Policy and biodiversity offsetting.

In line with the Committee's third Term of Reference, it has produced an advice paper to Government on research priorities. The paper explains what needs to be done in order to fill the gaps in our knowledge and understanding of natural capital.

State of Natural Capital Reports

The NCC’s advice mainly takes the form of annual reports to Government. It produced its first report in spring 2013 and its second was published in March 2014. It is expected the third State of Natural Capital report will be published in early 2015.

First State of Natural Capital Report The first report set out a framework for what the NCC thought was needed. Basically this was: to measure and value natural capital in order to better manage it. It highlighted that better management of natural capital can produce economic and wellbeing benefits.

Second State of Natural Capital Report The second report contained three key messages: 1. Some assets are currently not being used sustainably. The benefits we derive from them are at risk, which has significant economic implications; 2. There are substantial economic benefits to be gained from maintaining and improving natural assets. The benefits will be maximised if their full value is incorporated into decision-making; and, 3. A long-term plan is necessary to maintain and improve natural capital, thereby delivering wellbeing and economic growth.

In order to arrive at the first key message, the Committee undertook some work which has started to identify those assets that are at risk and record them in a risk register. Perhaps the main message of its second report was the recommendation to establish a 25 year plan for restoring the country's key natural assets.

The Government has yet to respond to the recommendations in this second report.

What is the basis for the NCC?

The NCC was set up as an independent advisory Committee following a key UK Government Natural Environment White Paper commitment in 2011. It has a three year term and formally reports to the Economic Affairs Committee. The Government's Economic Affairs Committee is chaired by the Chancellor of the Exchequer. It will be reviewed towards the end of this three year term to decide whether or not it should continue.

NCC Members

The Committee is chaired by Professor Dieter Helm. It has seven members from academia and business who have expertise and experience in ecology and environmental science, economics and business. The members are:

The Committee is supported by a small, but full-time secretariat.

A selection of NCC Publications

References

  1. NCC website
  2. Natural capital
  3. First State of Natural Capital Report
  4. Second State of Natural Capital Report
  5. Natural Environment White Paper

Further reading