AG INSIGHT | 01/07/2022
The UK Infrastructure Bank should lead on net zero and nature
James Cameron, Senior Advisor at Pollination, outlines why the UK Infrastructure Bank must lead the way in delivering net zero and nature restoration – and discusses how this can be achieved in practice through new policy measures.
The UK Infrastructure Bank (UKIB) should establish itself as a leader on how the infrastructure of the future should be designed in order to deliver both a net zero and nature-positive economy. To do so, it must formally redefine infrastructure as inclusive of the natural systems foundational to the nation’s success and set nature as a priority investment area for achieving its dual objectives.
Ideally, we would want HM Treasury (HMT) to value natural capital, the Office for National Statistics (ONS) to account for it and our new national infrastructure bank to invest in the enhancement of natural capital for the good of the nation. The best way to give expression to that ideal is in law.
The Chancellor’s letter to the UKIB, setting out the results of HM Treasury’s review of the UKIB’s environmental objectives, captured the importance of nature, but only to a limited extent. The letter called for nature-based greenhouse gas removals to be treated as within the UKIB’s scope and set a government view that there is a role for the UKIB to play in novel markets for nature. Finally, it established that the UKIB should embed environmental impacts into its decision-making.
Unfortunately, the Chancellor’s stated support for the UKIB to invest in nature is not visible in the UKIB’s implementing legislation. Indeed, the UK Infrastructure Bank Bill was published devoid of any mention of nature, which was relegated to a single line in the Bill’s explanatory text. The note states that Government’s policy for the Bank to invest in infrastructure projects to enhance the UK’s climate resilience includes nature-based solutions.
As written, the Bill provides an insufficient foundation for investment into nature at the scale needed across the UK. Further, it completely fails to acknowledge first, that the UK cannot meet its Net Zero target without investments in the restoration of its natural systems, as well as the contribution of these investments to levelling up through a green recovery.
The UKIB Strategic Plan does provide an opening on nature – recognising the potential role of green infrastructure solutions and the opportunity for investment once the project pipeline matures, particularly in the water sector. The Plan also notes the UKIB can invest in nature-based solutions to Greenhouse Gas Removals. Yet stronger support for nature as a priority investment is needed.
Enhancement of the nation’s natural capital will deliver jobs, along with the social benefits associated with improved access to green space. For example, jobs in the nature-based sector represented 7.5% of Scotland’s workforce in 2019 – totalling 195,000 jobs. This sector grew at five times the rate of all jobs in Scotland over 2015-2019, accounting for one-third of job growth. This sector is only projected to expand, owing to commitments for increased woodland planting, peatland restoration, and blue carbon projects.
The contribution of nature to enhancing productivity by improving physical and mental wellbeing is also increasingly well documented, in particular in mitigating the urban heat island effect, flooding risks and air pollution. Improved community access to green space further has the potential to foster social cohesion and shared societal values in an increasingly fractured time. In response, civil society has called for a legal right to nature under levelling up.
The UKIB has an opportunity to drive a step-change in investment in the UK’s natural capital. Further, there are clear blueprints to draw upon. Big Society Capital and the Green Investment Bank provide concrete examples of how the UKIB might catalyse new markets for nature. The work of the Natural Capital Committee and The Dasgupta Review further provide a clear foundation for the importance of investment in natural capital, much like the Social Investment Task Force and the Green Bank Commission which preceded them.
A specific and clear commitment to the enhancement and restoration of natural capital is in the interest of the nation. It is further integral to the UKIB’s success in delivering on its objectives. This reality should be enshrined in the new institution’s implementing legislation. Without a robust foundation set in law, the UKIB risks missing this transformational opportunity to achieve the UK’s domestic ambitions on nature, climate, and economic inequality.