Perspectives on Environmental Land Management Schemes in England by reference to weak and strong sustainability and Doughnut Economics 

Introduction

Following the UK’s departure from the European Union (EU), the UK government introduced a new policy for farm subsidy payments in England[1].  Prior to this, agri-environmental support schemes were determined by the EU Common Agricultural Policy (CAP).  The CAP needs to be suitable for the whole of Europe and left little room for national flexibility (Defra, 2020a). Most recently, farm subsidies were based on the area of productive land, which had a number of consequences: increasing field sizes, destruction of hedgerows and wildflower field verges and the bulk of subsidises going to the wealthiest farmers (Defra, 2020b).  This in turn has resulted in a number of widespread negative impacts for the countryside, for example, reduction in biodiversity and flood resilience and economic challenges for smaller farms.

The intent of the new Environmental Land Management Schemes (ELMS) (Defra, 2020b) is to pay subsidies for work to maintain and improve the environment alongside the production of food, broadening the benefits to the public from subsidies and repairing some of the damage resulting from previous regimes. Specifically ELMS looks to tackle climate change; contribute to “net zero”[2]; enhance biodiversity; and restore landscapes (Defra, 2020b). It is also intended to play a significant part in delivering the goals of the UK’s 25 Year Environment Plan (HMG, 2018). The new schemes will be introduced over 7 years (2022 to 2028) and will pay subsidies against specific projects or initiatives related to: sustainable farming, creating habitats for nature recovery and making beneficial landscape-scale change (e.g. woodland creation).

The development of this policy has been underpinned by widespread stakeholder engagement over a number of years, including dialogue with the farmers, foresters, land owners and other stakeholders with an interest in the topic (Defra, 2020a).

( [1] As a devolved issue, equivalent policies are in development for Wales, Scotland and Northern Ireland by their respective administrations)

( [2] Net Zero is the UK’s effort to “reduce emissions to as close to zero as possible, with the small amount of remaining emissions absorbed through natural carbon sinks like forests, and new technologies like carbon capture” (BEIS, 2021))

Frameworks

The purpose of this study is to characterise and analyse the main tenet of the new policy from an economic perspective. The new policy represents a significant shift from paying subsidies based on potential productivity (by area) to one in which subsidies are linked to environmental services and public gain. This suggests a message change from government, that productivity is no longer the highest priority.

To investigate this change, the extent to which ELMS represents a switch from weak to strong sustainability (Barbier & Markandya, 2012) is considered and what that tells us about how the environment is valued.  The extent that ELMS is a step towards Doughnut Economics (Raworth, 2017) will also be considered and how that framework can guide policy development. Both frameworks are characterised by a change in perspective regarding the importance of the environment compared to other factors and will therefore provide insight into the policy change represented by ELMS.

Weak vs Strong Sustainability

ELMS increases emphasis environmental issues and sustainability. There is no suggestion that previous policies didn’t intend agriculture to be sustainable, however, a focus on production (from the end of the second world war onwards) incentivised behaviours that are now seen to have been detrimental, for example: hedgerow removal (RSPB, 2023); increased field sizes; destruction of native woodland for alternative crops and coniferous forests; and, over production (The Economist, 1997).

The concepts of weak and strong sustainability differ by the treatment of natural capital. In weak sustainability it is considered acceptable to exchange natural capital for physical or human capital, so long as the economic opportunities available to future populations are maintained (Barbier & Markandya, 2012). This contrasts with strong sustainability, in which there are aspects of natural capital that are unique and/or irreplaceable and therefore cannot be exchanged.

UK Government guidance characterises natural capital as: “environmental assets, such as soils, from which beneficial services flow supplying resources to the economy, for example, agricultural crops, and disposing of its wastes, such as treated sewage effluent” (POST, 2011, pp1). If a field or a coniferous forest is considered natural capital, then previous farm subsidy schemes haven’t specifically sought to exchange natural for physical or human capital, they have changed one type of natural capital for another (e.g. hedgerow to larger field) whilst attempting to increase its value in terms of supply.  Somewhat counterintuitively, the previous policies could therefore be considered strong sustainability.

Perhaps a more granular perspective on the approach to valuing natural capital would be more insightful.  Previous policies may be considered to have increased the natural capital through artificially increasing productivity (field sizes, monoculture, intensive cultivation) but we now better understand the detrimental effects, including: reduction in biodiversity; impacts on pollinators (Friends of the Earth, 2023); and degraded soils (Begum, 2021; Soil Foodweb School, 2023). More recent perspectives on the value of different types of natural capital and ecosystem services, especially in the long term, would suggest a net loss of natural capital from past policies and most notably, a failure to “keep essential natural capital intact” (Barbier & Markandya, 2012, pp43).

Whilst this loss appears to be happening within the definition of “natural capital” perhaps this is indicative of a problem with nomenclature or definition. When an area of land becomes a crop field, should we actually consider it to be switching from natural to physical capital? In effect, it is becoming a factory or at the very least an enabler to generating human capital through provision of food. Either way, this new perspective is indicative of a net-loss of the total stock of capital and therefore the old system appears to be weak sustainability after all.

An apparent weakness of this framework is limited granularity (because not all natural capital is the same) and, perhaps more pertinent, the risk of there being gaps in data and changes in how society assigns value over time.  Under previous policies there was a view that natural capital was being increased because provision of food had a very high value (particularly in post-war years).  By today’s standards, we have been degrading natural capital because we value nature more highly and don’t subscribe to a perspective of food provision at any cost.

The question here is whether the new policy approach represents a switch to strong sustainability. Certainly the new schemes are looking to: “improve soil health and water quality, enhance hedgerows”, “restore wilder landscapes” and “building back nature into…farmed landscapes” (Defra, 2020b, pp5).  This is as a direct response to loss of wildlife-rich habitats and species decline and as a contribution to meeting Government intentions to deliver “Net Zero”. Additionally, there is a recognition that past practices have been delivered at the expense of nature (Defra, 2023).

The ELMS policy indicates that Government adopted a position in which nature has value in its own right because they are willing to use taxpayer money to pay for it. There are limited tangible or direct monetary returns on this investment; therefore, the policy appears to be an effort to restore natural capital (ultimately, an admission that past policies have eroded natural capital). As Barbier & Markandya (2012, pp43) note, in order to deliver strong sustainability, there is need to keep the “non-substitutable and essential components of natural capital constant over time”.  ELMS looks to redress the loss of natural capital from past policies and therefore could indeed be considered a strong sustainability policy because it is saying that nature is not substitutable.

Doughnut Economics

Doughnut Economics (Raworth, 2017) provides an alternative perspective on the value of a proposition, movement or policy with respect to impacts on people and the planet.  The main principle behind the Doughnut is that a future based solely on growth (informed by the majority of economic thinking to date) is inherently unsustainable and if humanity is going to thrive in consort with planet Earth, how we judge the value of what we do needs to change (Raworth, 2018).  That economies based on endless growth are unsustainable is a perspective that has gained greater attention over the last decade, even developing an underground pervasiveness in popular culture, for example Muse’s album “The 2nd Law” (Muse, 2012), which invokes the 2nd Law of Thermodynamics as the case against endless growth.

Doughnut Economics is typically represented by a diagram (Raworth, 2017), adapted for this essay in Figure 1.  The zone inside the Doughnut represents a “social foundation”, in which the needs of people are met when all of the elements in the zone are sufficiently delivered.  The outside of the Doughnut is defined by a series of planetary boundaries that specify a safe zone for Earth systems.  Beyond this boundary, the earth’s systems are suffering harm.  The Doughnut itself represents a region of balance in which the needs of people are met without harming the planet (Raworth, 2018).

Figure 1 shows the output from a brief analysis of the ELMS policy document (Defra, 2020b) and the UK 25 Year Environment Plan (HMG, 2018) against the Doughnut. It shows where policy initiatives coincide with zones in the Doughnut, potentially moving agriculture in England towards the Doughnut.  For example: initiatives to reduce organic fertiliser use (nitrogen and phosphorus loading), restore habitats (biodiversity loss), limit the effects of drought (water) and create sustainable jobs in the rural sector (income and work) etc. 

Figure 1 shows that both policies incorporate initiatives that address many aspects of the Doughnut.  The 25 year plan has a broader remit and addresses a broad range of concerns, although typically acting more in the zone outside of the Doughnut. ELMS is more targeted, and fewer arrows are seen outside of the circle. Interestingly, ELMS includes initiatives that have effects inside the Doughnut that aren’t specifically associated with the 25 Year Environment Plan.  This is likely to be because ELMS is endeavouring to strike a balance between environmental concerns, delivering food security and providing sustainable jobs in the rural economy.

The analysis against Doughnut economics is insightful, acting as a useful checklist as to whether a policy is providing holistic benefits, in particular highlighting social and environmental improvements. A concern, is that in such an analysis it is easy to identify positives, but harder to see potential negative impacts because policy documents are typically written to highlight only positive action.  A more detailed and data-driven assessment may be more helpful, however, there is a risk that potential negative impacts remain unseen and the policy suffers from optimism bias.

Another concern is that looking at one policy provides an incomplete picture.  Without looking at the entirety of a Government's policies, we can’t necessarily know the extent to which we are existing within or outwith the Doughnut.  Other policies, where the focus is not on environmental or sustainability issues could easily be moving society away from the Doughnut. And in many cases the real effects of policies are difficult to predict.  Collating all policies in one analysis would be challenging, if not undeliverable.

As such, Doughnut Economics has its limits, in some ways acting more as a policy in itself, than a model or a framework for analysis. The only path to successful deployment might be the bold step by a Government to adopt it as government policy, in turn requiring that all other policies demonstrate alignment to it.  This would be a very bold step indeed and a significant break from current trajectories.  As Raworth notes (2018) successful countries would be very reluctant to risk losing their place in the G20 club, which is exactly what such a change in emphasis could mean.

Conclusion

It is not wholly clear that ELMS represents a shift from weak to strong sustainability, but this is mostly because the framework is insufficiently granular to capture all of the issues and because the definition of natural capital has been developed through a productivity based mindset, i.e. natural capital is those aspects of nature that can be harnessed as part of a system of productivity. That nature has inherent value is not captured by such a definition.

Doughnut Economics is more insightful in characterising the potential social and environmental benefits of the ELMS.  There are however limitations and the potential for harmful effects of the policy to go unseen. This is partly the result of the positive terms in which policy is couched when documented.  A beneficial action would be to develop a series of metrics that would illustrate the performance of the policy against the factors captured in Doughnut Economics.  Determining the real benefit or otherwise of this policy by these means would take many years, however, the information gained for future policy development would be invaluable.

In summary, the shift in approach by the ELMS policy has been analysed and characterised. The limitations of the frameworks have been described and opportunities for further beneficial deployment of Doughnut Economics has been set out, for example, by inclusion in Government policy or as a tool for monitoring policy implementation.

References

Barbier, E.B., & Markandya, A. (2012). A New Blueprint for a Green Economy (1st ed.). Routledge

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