CEPS seminar -Public goods from private land
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The document discusses public goods from private land management in the EU. It argues that environmental market failures related to agriculture are underestimated and undermine food and environmental security. It advocates for paying private land managers to deliver environmental services and public goods through measures like agri-environment schemes and cross compliance to address issues like biodiversity loss, pollution, and climate change. Precisely defining and measuring these public goods is necessary to justify related EU policies and budget allocations.
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CEPS seminar -Public goods from private land
- 1. Public Goods from Private Land CEPS 1 st February 2010 Allan Buckwell Chairman ELO Policy Group Policy Director CLA
- 2. RISE Task Force Report: Public Goods from Private Land Context : The EU Budget and Policy Review Commodity and financial crisis 2007/08 Climate change; Biodiversity Loss The thesis : systematic underestimation of scale of environmental market failures in agriculture the actions and resources to put them right The biggest challenges Clarity on definition and specification of public goods Agreeing the reference level for payments Fitting these principles into the ‘Green Box’ Agreeing the necessary adaptations to the CAP Justifying this for EU policy and budget
- 3. The Food and Environmental Security challenges The interdependence between EU food and environmental security 4/5ths of Europe’s land is farmed or forested The way we ‘do’ our farming and forestry massively impacts the environment The quality of the environment Soils Water Air Genetic diversity hugely affects our food producing capacity
- 4. What does a Food and Environment Security Policy do? It achieves food security by Ensuring there is a profitable farming industry Maintaining production capacity by By protecting best agricultural land Providing R&D & Extension for productivity growth & reducing negative environmental impact Fair share for agriculture in the food chain It achieves environmental security by Precision, highly productive land management Active, appropriately-scaled set of environmental policy measures to deliver public goods from land management Paying particular attention to the marginal areas
- 5. Breadth & components of the interaction between land management & environment We can see this positively as the services provided by land managers - farming and forestry occupy 80% EU land resource protection, biodiversity & cultural landscape Or as market failures: too many environmental ‘bads’ – insufficient ‘goods’ Pollution of rivers and groundwater Over-exploitation of aquifers Insufficient rain absorption, too much run-off Atmospheric pollution Green House Gases + ammonia Soil: erosion, compaction, organic matter depletion Biodiversity, habitat and species loss Landscape degradation Insufficient protection of cultural heritage
- 6. How to internalise these externalities? This is a question of who pays? Food consumers Food producers (but to be sustainable they must charge full social and environmental costs) Direct users of the environment Taxpayers The choice concerns cost/effectiveness & fairness and so, assignment of property rights in land use You would expect us to argue the value of private property rights - that is a contractual basis for environmental service delivery rather than a command and control regulatory approach
- 7. The scale of the environmental market failures - Global Constanza et al (1997) Global ecosystem services worth $33tr, 1.8 x GDP UNEP Millennium Assessment (2003) Substantial and largely irreversible loss of biodiversity WWF (2005) Living Planet report Global footprint 30% > global biocapacity Stern (2006) Economics of climate change Costs & risks if inaction equiv to 5% of GDP/yr Cost of action can be limited to 1% of GDP/yr The Economics of Ecosystems & Biodiversity TEEB (2008) who measured the Cost Of Policy Inaction By 2050 compared to 2000 = €14tr, 7% GDP pa
- 8. The scale of the environmental market failures - European Defra (2008) Environmental Accounts for UK agriculture, figures are annual flows for 2007 £1.2b +ve; £545m –ve; net +£645m ~12% GVA and -£2b air emissions (different calc n . basis) Roewer (2008) Environmental protection expenditure by Industry in the EU 1997-2004 In 2004, €45.6b, 0.4% of GDP, 2.4% of GVA Manufacturing 80%, Elect, gas & water 17%, mining 3% Dutch Min of Ag. Nature and Food “ Nature and landscape pay, reason enough to continue to invest LUPG (2009) UK cost of delivery is £1.99b, current spend is £0.74b. Scale of corrective actions does not yet match the scale of the problems
- 9. Indicate scale of the problem to motivate commensurate policy action Measurement problems : total flows or marginal changes valuation problems benefit transfer and aggregation What resources do we need to deliver Environmental Public Goods - EPGs ? Value of Justifiable Costs of environmental > expenditure > delivery by services to deliver EPGs land managers EU budget review, Budget Heading 2, Protection and Management of Natural Resources
- 10. Delivery by market s , clubs or government Create markets where possible Government role to make this happen e.g. carbon Caps on emissions, mandatory replacement of biodiversity Private or charitable organisations – clubs Acquire land to provide services Public payments to private land managers Costs and benefits of environmental services vary so spatially varied payments Cross compliance, agri-environment schemes, LFA payments, Article 68 approach, the environmental value "pyramid” Incorporate environment in food purchases Organic, local, speciality, GIs
- 11. EU policy and budget or Member States? The five Cs… Relevant policy is already EU Competence Reasons for EU budget contribution Cross boundary effects Common interest Competitiveness Cohesion