How new farm policy could use private money to improve the environment

The government plans to replace the Common Agricultural Policy (CAP) with a new environmental land management (ELM) system which rewards farmers who manage their land in the public interest - producing food alongside enhancing the environment. This new report Funding nature’s recovery: how new public spending can unlock private investment outlines three ways in which the government’s ELM system could unlock private investment in environmental enhancement to supplement public payments.

The Green Alliance have previously shown that the economics of markets for ‘slow, clean water’ stack up. But there are other barriers to these markets emerging. Schemes need to reach sufficient scale to be effective, and they require a number of partners to work collaboratively in new ways.

To overcome these barriers the report calls on the government to use the new environmental land management system to:

• create a new type of collaborative private enterprise, ‘Natural Infrastructure Delivery Companies’, jointly owned by farmers and downstream beneficiaries to deliver environmental enhancements;

• introduce formal accreditation for brokers with the authority to facilitate both public and private funding; and verify compliance; and

• provide match funding for private investments in natural capital under the new ELM system, to lower the risk and cost of investing in natural solutions.