Arboreal capital: environmental planning

Accounting for natural assets

6 June 2018

The tonnes of plastic waste polluting our oceans represent just one of the problems that the government’s 25-year environment plan needs to tackle, argue Paul Leinster and Leon Terry

The government’s A green future: Our 25-year plan to improve the environment is much needed in terms of setting out a vision and direction, and as a spur for firm planning and action, and it includes a bold statement of intent for us to become 'the first generation to leave the natural environment in a better state than that in which we found it'.

But while the plan’s launch successfully tapped into the public consciousness, thanks to the popularity of BBC1’s The Blue Planet, most attention has been directed towards the plastic pollution of oceans that the programme highlighted. So where does this leave the rest of the document’s major aims and objectives?

Natural capital

The plan embraces the concept of 'natural capital', that is the national stock of land, minerals, forests, rivers and oceans, which needs to be more widely understood and supported. It recognises the importance of ensuring that the natural environmental assets on which we depend are taken properly into account, and the assessment is used to inform the country’s economic activities, including industry, infrastructure, land management and spatial planning.

After Brexit, for example, there is an opportunity for the UK to develop a farming and land management payment system with protection and improvement of natural assets at its heart, but this will take a shift in attitudes from stakeholders, including the public. We need to stop thinking of the environment as the provider of free services: these depend on natural assets that, at an aggregate level, are declining in value. They will not be able to sustain a given level of services without affecting the environment, health and economy. We also need to move past the typical attitude that the environment is an obstacle to development and a problem requiring conciliation and concessions, and instead encourage people to recognise that it is one of the assets with which we are working and from which we benefit.

If we are to identify opportunities in natural capital, we require systemic, integrated thinking. So, for example, why not pay farmers for allowing land to act as floodplains, diverting water away from homes and businesses? In this way they are providing public goods of a particular value that could allow huge savings for public services and individuals. If landowners were given incentives to restore peatlands and uplands there would be less soil erosion, and thus fewer nutrients escaping into water systems and less need for water treatment.

Of course, organisations and landowners can’t be paid to comply with the law, and what is being proposed is something different – a recognition that protecting and improving natural assets can offer benefits with a clear and measurable economic return. Natural assets need to be included on balance sheets as other assets are, and there should also be a risk register and action plan to ensure these assets are maintained. Natural assets often provide multiple benefits, depending on location. For example, trees provide timber but also areas for recreation, and contribute to health and wellbeing, carbon sequestration and flood risk reduction.


An important aspect of implementing the plan is to identify what success will look like in 25 years’ time, how it will be measured and to have milestones for checking progress, with robust governance to oversee implementation.

Pioneer projects testing the principles of a natural capital approach have been running since 2016, looking at a river catchment in Cumbria, at Manchester as an example of an urban area, at landscape in north Devon and at marine areas in Devon and Suffolk. These offer insights into how the theory works and a template for future projects, and a workbook has been created for planners, landowners, councils and communities. No one would deny the seriousness of plastic waste in oceans, but this is only one of the challenges to address if the government’s central pledge is to be realised.

Paul Leinster is Professor of Environmental Assessment at Cranfield University, a member of the Natural Capital Committee and former Chief Executive of the Environment Agency

Professor Leon Terry is Director of Environment and Agrifood, Cranfield University

Further information