Bringing Health and the Environment into Decision-Making: The Natural Capital Approach

This is the final version. Available from the Rockefeller Foundation Economic Council on Planetary Health via the link in this recordPlanetary Health seeks to meet the health needs of present and future humans without compromising the natural systems on which that health depends1. To achieve this aim, society has to adopt a way of making decisions that not only considers their narrow financial costs and benefits, but also their broader effects on human health and the natural environment. Only by bringing all of these elements together can we both understand the financial drivers of business behaviour and the wider set of influences upon human wellbeing. The paper overviews the measures, often called ‘metrics’, available to governments and businesses to understand the health and environmental consequences of alternative decisions and investments. These metrics provide a scientific understanding of the wider effects of change. The paper then shows how these metrics can be brought into conventional economic decision making so they can be considered on a level playing field with other costs and benefits. This approach to understanding decisions from both a business and a wider social wellbeing perspective is commonly referred to as the Natural Capital Approach.Rockefeller Foundation Economic Council on Planetary Healt

Updating the Woodland Valuation Tool: A review of recent literature on the non-market values of woodlands

This is the final version.Woodlands and forests constitute arguably the most diverse environments on earth; diverse not only in terms of the plethora of characteristics and habitats they embrace, but also in terms of the variety of benefits which they offer to people. For centuries forests have been valued as a source of timber for the fibre, construction and fuel industries. However, recent decades have seen a growing appreciation of the value of woodlands, as a source of a much wider array of benefits. Forests are important assets for the sequestration and storage of carbon and, therefore, they play a role in climate change mitigation. Woodlands also contribute to air filtration more generally, removing airborne pollutants and reducing related health risks. Similarly, woodlands help to improve the water environment, providing water purification (enhancing water quality and reducing the costs of treatment) and water regulation (including the reduction of flood risks). Forests also offer highly valued landscapes and views and superb recreational opportunities, in turn generating physical and mental health benefits to visitors. Woodland environments also provide habitat for many of the country’s most treasured flora and fauna, thereby supporting biological diversity, which in turn both enhances the quality of recreational visits and generates benefits for woodland users and non-users, by ensuring the continued existence of species. While this diversity of benefits is widely recognised, incorporating these values into decisions regarding the management and extension of woodland remains a challenge. While the value of some forest products, such as timber, is readily reflected within market prices, this is the exception rather than the rule. Most of the goods and services provided by woodlands have characteristics of public goods. To a large extent, they are not traded through markets and remain therefore unpriced. Benefits such as the removal of pollutants from air and water, flood control, or the provision of biodiversity and habitats are all delivered without the intervention of markets. While these non-market values have been shown to be very substantial, they are not reflected in market prices and, therefore, can easily be omitted from decision-making. The provision of public goods, and in particular their funding from the public purse, has become of central importance to the policy process in recent years. Longstanding recognition of the principle of “public money for public goods” (H.M. Treasury, 2018)1 combined with the regulatory opportunities afforded by Brexit, have resulted in this principle being incorporated into the UK Government’s 25 Year Environment Plan (H.M. Government, 2018)2 and its preparations for a forthcoming Agriculture 2 H.M. Government (2018) A Green Future: Our 25 Year Plan to Improve the Environment, H.M. Government, London, available at www.gov.uk/government/publications and directly at: 3 1 H.M. Treasury (2018) The Green Book: Central Government Guidance on Appraisal and Evaluation, H.M. Treasury, London, available at www.gov.uk/government/publications or directly at: https://www.gov.uk/government/publications/the-green- book-appraisal-and-evaluation-in-central-governent Bill (Defra, 2018)3. While much of the immediate focus of these changes is upon agriculture, the consequences of these changes are likely to have very significant impact upon woodland in the UK. Shifting agricultural support and towards public goods may provide opportunities for farm woodlands, and raise the profile of the woodlands as a major supplier of public goods. As the emphasis upon public goods has risen up the policy agenda, so has interest in the measurement and valuation of those goods. The past five decades have seen the development of a range of methods for estimating the economic value of non-market benefits. These developments have been accompanied by a rapid growth in their empirical application across a range of non-market goods and services. One of the most common foci for such studies has been the valuation of woodland benefits and a substantial, if diverse, literature has accumulated around the world. The UK Forestry Commission has long played a substantial part in the development of this work and in 2015 commissioned a team of researchers to gather together and systematically review relevant studies of the economic value of non-market benefits of woodland (Binner et al. 2015)4. To enhance the use of this review within practical decision-making, the researchers brought the reviewed literature together as a ‘Woodland Valuation Tool’, a spreadsheet-based decision support tool, allowing decision makers to interrogate an assembled database of studies across a substantial range of dimensions designed to inform forest management across the UK. The present report presents an update to that previous work. Specifically, it provides a review of the new literature concerning the economic value of non-market woodland benefits arising since the publication of the 2015 Binner et al. report. This e most recent review of literature has also been integrated into the Binner et al. (2017) report, to produce a more substantive document discussing the most current literature available (Binner et al., 2018). Additionally, an update of the Woodland Valuation Tool is provided, merging these new studies with those reviewed in the previous report. In combination, this is intended to provide up to date decision support for those involved in the management and extension of woodland, who wish to ensure that decisions are based upon an appraisal of the full gamut of benefits, which forests provide

Public funding for public goods: A post-Brexit perspective on principles for agricultural policy

This is the final version. Available on open access from Elsevier via the DOI in this recordRaw data for the Gini coefficient and safety-net income calculations use Defra’s 2016 figures available at: http://cap-payments.defra.gov.uk/Download.aspxIn early 2019 the United Kingdom is due to leave the European Union and with it the Common Agricultural Policy. The UK Government has announced its intentions to formulate a novel agricultural policy following the principle that public funding should be restricted to the provision of public goods. However, the acceptance, interpretation and application of this principle is the subject of intense debate. We overview the background to this debate, reveal the major flaws in present policy and identify and provide our answers to three key questions which future policy must address: (1) What are the farm related public goods that public money should support?; (2) How should that spending be allocated?; (3) How much should be spent? We believe that these questions and their answers will be of general interest beyond the UK.This work was supported by the Natural Environment Research Council (NERC) through the SWEEP project [grant number NE/P011217/1]

Revealed and stated preference valuation and transfer: A within-sample comparison of water quality improvement values

Benefit transfer (BT) methods are becoming increasingly important for environmental policy, but the empirical findings regarding transfer validity are mixed. A novel valuation survey was designed to obtain both stated preference (SP) and revealed preference (RP) data concerning river water quality values from a large sample of households. Both dichotomous choice and payment card contingent valuation (CV) and travel cost (TC) data were collected. Resulting valuations were directly compared and used for BT analyses using both unit value and function transfer approaches. WTP estimates are found to pass the convergence validity test. BT results show that the CV data produce lower transfer errors, below 20% for both unit value and function transfer, than TC data especially when using function transfer. Further, comparison of WTP estimates suggests that in all cases, differences between methods are larger than differences between study areas. Results show that when multiple studies are available, using welfare estimates from the same area but based on a different method consistently results in larger errors than transfers across space keeping the method constant.ESRS - SEER projectEU DG Research - AquaMoney projec

EAERE Award for the Best Paper Published in Environmental and Resource Economics During 2013

This is the author accepted manuscript. The final version is available from Springer Verlag via the DOI in this record

Preference uncertainty as an explanation of anomalies in contingent valuation: coastal management in the UK

This is the final version. Available on open access from Springer via the DOI in this recordDirectly asking respondents in contingent valuation surveys their willingness-to-pay is one of the few quantitative methods available to assess full economic value (including both use and non-use values) of non-market environmental goods. It therefore remains vitally important to better understand the reasons for consistently observed violations of procedural invariance in such surveys. This paper describes an empirical experiment designed to examine whether uncertainty might provide an explanation for three commonly-observed violations of procedural invariance in contingent valuation. In each case we present a plausible explanation for each anomaly through decision heuristics brought about by respondents trying to answer the question truthfully when their underlying preferences are stable but uncertain. Using a novel semi-parametric estimator we find little evidence to support the idea that anomalies can be resolved through an uncertainty explanation but our experiment provides noteworthy insights into the ways uncertain preferences may be shaped by the nature of contingent valuation questions

EAERE Award for the Best Paper Published in Environmental and Resource Economics During 2014

This is the author accepted manuscript. The final version is available from Springer Verlag via the DOI in this record

The value of urban green space in Britain: A methodological framework for spatially referenced benefit transfer

Author version of article. The final publication is available at Springer via http://dx.doi.org/10.1007/s10640-013-9665-8.© Springer Science+Business Media Dordrecht 2013A meta-analysis of studies valuing urban greenspace in the UK is undertaken to yield spatially sensitive marginal value functions. A geographical information system (GIS) is used to apply these functions to spatial data detailing the location of such greenspace resources in five British cities and monetary values are computed. This procedure is repeated for the six future scenarios used in the UK National Ecosystem Assessment and changes in values calculated for the period 2010-60. These findings are then extrapolated to all major British cities to obtain per household and aggregate valuation estimates for each scenario both with and without distributional weights. While subject to a number of shortcomings in both data availability and methodology, this represents the first systematic and comprehensive attempt to value marginal changes in urban greenspace while accounting for spatial heterogeneity.Economic and Social Research Council (ESRC

The natural capital framework for sustainably efficient and equitable decision making

This is the author accepted manuscript. The final version is available from Nature Research via the DOI in this record.The concept of ‘natural capital’ is gaining traction internationally as recognition grows of the central role of the natural environment in sustaining economic and social wellbeing. It is therefore encouraging to see the first signs of a ‘natural capital approach’ to decision making being accepted within government policy processes and the private sector. However, there are multiple different understandings of this ‘approach’, many of which misuse or omit key features of its foundations in natural science and economics. To address this, we present a framework for natural capital analysis and decision making that links ecological and economic perspectives.Natural Environment Research Council (NERC)Turing-HSBC-ONS Economic Data Science Awards 2018Wellcome Trus

Valuing the social and environmental contribution of woodlands and trees in England, Scotland and Wales

Final published report. This publication is also available on the Foresty Commission website at: www.forestry.gov.uk/publicationsFirst published by the Forestry Commission in 2017.A second edition of this report is available in ORE: http://hdl.handle.net/10871/36539The diverse resources provided by trees and woodlands contribute to the production of a wide array of benefits ranging from timber to wildlife habitats and from carbon storage to water purification. This diversity is further complicated by the fact that, while some of the goods associated with forests are traded in markets and hence have associated prices, others arise outside markets and, while valuable, lack prices. The need to make evidencebased decisions regarding woodlands, including decisions such as how much public funding should be allocated to support the non-market benefits they generate, has necessitated the estimation of the value of those benefits. This scoping study provides a structured review of the state of knowledge regarding the economic valuation of social and environmental benefits derived from trees and woodlands in order to support policy and practice. Particular (although not exclusive) attention is paid to recent extensions to the literature since previous reviews (especially Eftec, 2011)