Valuing Natural Capital through consensus building. Professor Richard Tiffin, who is working with Defra on ways to value natural assets in his role as chief scientific officer at Agrimetrics, and who is also a professor of applied economics at the University of Reading, has criticised the idea of attaching a price tag to the environment.

Following the announcement of the government’s 25 year Environment Plan, Professor Richard Tiffin, Chief Scientific Officer for Agrimetrics, was asked to present a case-study about valuing natural capital to a Westminister Forum discussing policy priorities for further protecting the environment and conserving natural capital. Prof Tiffin explains that the so-called natural capital framework is becoming widely accepted as a conceptual model to help manage the natural environment. It borrows economic concepts, so natural capital is seen to be akin to a physical capital asset. An example of a physical asset is a farm building. The asset provides services in the shape of accommodation for livestock. It depreciates as it does so and it can be invested in to restore the effects of depreciation.

Likewise a natural capital asset, for example a forest, provides services and it can be depreciated and invested in. Some services can be valued, for example the provision of timber, and others, such as carbon sequestration cannot. As an economist, I have some unease about extending the reach of our discipline into providing a monetary value for those services for which no market exists.

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