The policy agenda around the creation of functional UK natural capital markets has advanced again today with the publication by the Environmental Audit Committee of a report setting out its recommendations for government on the development of natural capital markets. Inter alia, the report calls for an assessment of the impact of the measures in the Planning and Infrastructure Bill that establish a Nature Restoration Fund (NRF) would interact with and impact upon the operation of biodiversity net gain and of broader Government initiatives to encourage investment into nature markets. That reflects a concern that the use by Natural England of new compulsory purchase powers to purchase land for nature with NRF funding would undermine the private sector players looking to provide BNG and other nature market credits for sale to those that need them to offset degradation elsewhere.
The report recognises the development of the nature markets framework but also flags up the need for government to clarify in the forthcoming Land Use Framework how environmental land management schemes and other nature funding for farmers ought to complement wider nature restoration efforts and funding for nature restoration projects alongside delivering food security.
Another key ask is for the government to clarify rules around stacking and bundling of natural capital assets.
All the recommendations in the report are well-founded and based on extensive oral and written evidence that the committee took during its deliberations. They serve as a reminder that the creation of nature markets is a new and rapidly evolving concept and that clarity is required on how the many and various policy strands will fit together so that all players in the market have the information they need to make what are very long term business decisions.
