Last week’s PolicyLab saw the launch of the government mandated Natural Capital Committee (NCC). The committee was established earlier this year and has been tasked with advising government on when, where and how the UK’s natural resources are being used unsustainably; how action to protect and improve natural capital should be prioritised, and to advise on research priorities to improve future decision making. The event aimed to help the NCC engage with its stakeholders. The committee members were joined by the Rt Hon. Owen Paterson, DEFRA Secretary of State, who expressed his wholehearted support for the NCC. The Secretary of State also took the opportunity to outline the reprioritisation of DEFRA to have a ‘laser-like focus’ on growing the country’s economy, improving the environment and controlling animal and plant diseases. The NCC is the first of its kind in the world and, as noted by the Secretary of State, it is fitting to hold the launch at the Royal Society, which has long acknowledged and supported the work of pioneers.

The NCC was established based upon the work of the UK National Ecosystem Assessment (NEA) and the government’s Natural Environment White Paper. The NEA highlighted that the direct and indirect benefits we derive from the natural environment underpin economic growth and contribute to our overall well-being. Despite this, the environment is consistently undervalued and treated as an add-on in public policy making and conventional economic analyses. The NCC aims to tackle this problem by integrating natural capital into national accounting. The need for this was highlighted by the recent Royal Society ‘People and the Planet’ report. One of the key recommendations from the report was that national governments should accelerate the development of comprehensive wealth measures and improve natural asset accounting. Fittingly, one of the People and the Planet working group members, Professor Georgina Mace FRS, is now a member of the Natural Capital Committee.

It is not just the Royal Society and the government that recognise the benefits of incorporating natural assets in accounting methods; companies are increasingly realising that their profits rely upon a functioning natural environment. The Natural Capital Declaration is one example of the financial sector working towards full consideration of natural capital in decision making. A key part of the NCC’s work plan will therefore be interacting with the corporate sector and major accounting bodies.

Unfortunately, it is one thing to say that the natural environment needs to be taken proper account of in decision making, and another to actually incorporate it. The NCC Committee members admitted that they face quite a challenge in achieving their mandate. They will need to develop an understanding of what the UK’s natural capital is, how it fits together and how it relates to well being and economic growth. Realising this will involve assessing complex systems, interdisciplinary work, a maze of value judgements, and the harsh reality of too many things to do combined with limited resources.

We will be able to see how the NCC has dealt with these challenges when they publish their first yearly report in February 2013. The turnout and audience enthusiasm at the PolicyLab event suggests that the report will be eagerly awaited. Whatever their output, it is almost certain that a new measure of the country’s natural capital will be a closer reflection of reality than the current default of zero. As the Chair of the NCC, Professor Dieter Helm, succinctly put it, they will definitely be ‘less wrong’ which will hopefully equate to ‘about right’.