Rethinking Land-Use Subsidies: A Natural Capital Approach for a Greener UK

**Researchers from the University of Exeter Business School have uncovered the inefficiencies in the UK's current approach to land-use subsidies.** The government's strategy of using flat-rate subsidies to convert agricultural land into woodland, aiming to achieve Net Zero by 2050, might actually backfire by increasing greenhouse gas emissions. **These subsidies often incentivize landowners on low agricultural productivity lands, such as carbon-rich soils, where tree planting can harm more than help.** The researchers propose a 'Natural Capital' approach to allocate subsidies based on predicted environmental benefits, integrating nature, climate, biodiversity, and recreational value. **Their study, published in PNAS, employed the NEV decision support system to compare three subsidy allocation methods: flat-rate, Natural Capital, and Land Use Scenarios.** While the current method results in poor value for money, the 'Natural Capital' approach delivers superior environmental and economic outcomes. It focuses on urban and ecologically valuable areas, enhancing biodiversity and recreational access, and meeting climate targets by sequestering 13MtCO2 annually by 2050. **Professor Ian Bateman highlights that effective policy implementation involves directing funds to areas of greatest impact, addressing climate change, biodiversity loss, and food security while ensuring taxpayer value.**