Professor Dieter Helm CBE - Economist

Professor Dieter Helm is an economist specialising in utilities, infrastructure, regulation and the environment. His focus is on the energy, water, communications and transport sectors, primarily in Britain and Europe. He is a professor at the University of Oxford and fellow of New College, Oxford. He is the author of Green and Prosperous Land – a blueprint for rescuing the British Countryside.

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The future of the countryside – building a green future

The decline of Britain’s countryside and wildlife has been meticulously documented by some of the best naturalists in the world. The insects have largely gone, farmland birds have been decimated, and our rivers, uplands and urban green spaces are all in less than a happy state. We can’t turn back the clock, but we can and should do a lot to halt further declines and start to enhance our natural capital.

Most of this damage is well known, and so increasingly are the adverse economic consequences. The environmental damage adversely affects our health and wellbeing — physically and mentally. We pay water bills to water companies to clean up the pollution that spills into our rivers. We pay farmers to own land. We pay to deal with the problems of air pollution. The lack of green spaces for children to play inside cities means we pay for the costs to their lungs and their development. We pay to clean up the waste and lots and lots of volunteers try to fight back against the tide of plastics on our beaches. Most of this is simply a waste of money: it causes serious economic damage.

The key point in my book is that this can also be a green and prosperous land. It makes good economic sense to stop the degradation of our countryside, and to start enhancing it for the next generation.

Where to start? The obvious place is agriculture, not least because it covers 70% of our land. Get agricultural policy right, and we will be on the way to leaving the environment in a better state for the next generation. Agriculture is, proportionately, the most subsidised industry in Britain. It only has a total output worth around £9 billion, 0.7% GDP. To get this £9 billion, we put in £3 billion of direct subsidies, exempt farmers from paying for most of their pollution, give exemptions from business rates and inheritance tax and offer half-price red diesel. We spend so much and get too few public goods in return. The sad fact is that this has not even been good for farmers. The industry, even with all this support, is not very profitable, and most of that profit comes from the subsidies. The average age of a farmer is 60. The perverse subsidies are capitalised in inflated land prices, and make it all but impossible for young farmers to get on the first rung of the ladder. There is a prize to be had here.

It is of course not all about agriculture. Further examples of economic opportunities abound in the river catchments, in the uplands, the urban areas and the marine and coastal fringes. River catchments are currently managed in a fragmented way, wasting money in the process. River quality is not getting better. We need to take on the catchments as a whole, on an integrated systems basis. The uplands remain precious parts of our remaining natural capital, and the scope for improvement is massive. Our national parks could be developed to enhance biodiversity and access, with all the economic benefits that could be obtained from exposure to their green spaces. They could be green and prosperous national parks.

Our cities are obvious places to look for natural capital enhancements. Trees are a good way to handle air pollution, and greenness has its obvious mental and physical health benefits. Greening cities has the added advantage of touching the lives of many people. Most of us live in them. We can have greener urban spaces, better parks and tree-lined streets. Children should have a right to be within a short distance of a green space to play and we should all be able to enjoy genuinely green Green Belts.

A green and prosperous land rests on sound economic principles. Public money should not be used for private benefits. Polluters should not be subsidised to pollute. Polluters should pay. Developers should not be allowed to damage the natural environment without paying proper compensation. There should be net environmental gain.