Natural capital is finally being recognised as an essential part of a growing economy, writes Dieter Helm, Chair of the National Capital Committee, which is meeting at The University of Manchester today. After decades of decline the Government is bringing forth a 25 year plan to ensure that the next generation has a better environment than the one we have inherited. And in an attempt to make rapid progress, four pioneer projects are focusing on bite-sized chunks of natural capital – river catchments, urban areas, landscape-wide restorations and marine habitats.

The overwhelming majority of people in England live in urban conurbations. They experience natural capital every day in the air they breathe, the water they drink, the rivers which carry away their wastewater, in the parks and gardens and green spaces, and in the biodiversity which is all around them.

Much of this is seriously sub-optimal, and therefore has serious negative impacts on the sustainable level of economic activity and growth. Urban air quality is a global issue, with choking cities in China and India recently in the headlines.

Poor air quality

But it is also a problem here in England. London’s air quality is so bad that it is technically illegal: it kills more people than die on the roads, and blights the health of millions. It limits the scope for airports, and the diesel related emissions are now a major transport challenge.

Green spaces were built into the fabric of our cities in the Victorian era, as the Open Spaces Society put pressure on providing the lungs of the city for the growing numbers of industrial workers. Later the Green Belts were added to not only limit urban sprawl, but also to provide accessible countryside to the urban populations.

Eroded heritage

Much of this heritage has been eroded, often seriously. Children no longer access green spaces in the way they once did. Part of this is down to fears over child safety, but it is also a reflection of the lower priority green spaces and playing fields have been given in the last couple of decades. Their health, their fitness and their broader well-being have suffered as a result.

Urban biodiversity matters too. It is often not appreciated just how much biodiversity there is in our cities, and more importantly how much more there could be. The peregrine falcon is making big inroads, but so too are bees. Urban waterways now have fish and invertebrate populations that were impossible only half a century ago, when some were so bad as to be effectively biologically dead.

As Britain’s population grows, as physical capital is expanded to provide houses and hard infrastructure, much of what is left could go under concrete. But this would be a big mistake, and seriously damaging to the longer-term economic growth prospects, properly managed. Just in health terms, obesity and the often related diseases of modern times cut not only into the life chances of the individuals affected and their life expectancies;they also drive up the health costs of dealing with the consequences. Children who lack green spaces for exercise and recreation will suffer not just physical health impairment, but mentally too. Providing nature on their doorsteps is a crucial part of giving the next generation better life chances.

Immense opportunities

Manchester has been chosen as an urban pioneer, and as a template for other urban centres to follow, because it has immense opportunities to enhance its natural capital. The cities of the future need what might be called “the Victorian touch” – enlightened long term planning of urban areas considered as a whole, where public goods are deliberately built into the growth and development of the city.

Think what Manchester could be in 25 years’ time. Think how new houses, new developments and new infrastructure could be built around an enhanced natural capital. Think of how Manchester’s Green Belt could actually be “green”, and accessible to the urban population. Think of the ways air quality could be improved, how health and education and life chances could be enhanced. Think how natural capital could enhance Manchester’s global status in new technologies and how the City could continue to attract the brightest and the best. Urban competitive advantage is as much about the quality of a city’s natural capital as it is about its physical and human capital.

Other cities should be able to learn from how Manchester, as the urban pioneer, develops its natural capital – and in doing so creates proper city natural capital accounts, identifies the benefits from enhancing its natural capital and hence builds a faster sustainable growth rate.