Economic growth and
environmental performance must
go hand in hand.
Working on environmental policy makes Defra staff constantly aware of the complementarities
between a healthy natural environment and prosperity. So it is frustrating that economic growth
is often seen as necessarily at odds with the environment. In this paper we aim to put that right,
drawing on analysis from across the world and our own experience as an environmental policy
department addressing the complementarities and trade-offs between economic growth and
protecting the environment.
Like all government departments, Defra designs and implements policies which contribute to
economic performance, productivity growth and economic prosperity. In doing so, our core
responsibility is to ensure that the natural environment – itself a large part of the UK’s asset base –
is managed in a way which establishes the conditions for sustained economic growth in the
long-term.
Economic and environmental performance must go hand in hand. The natural environment is central
to economic activity and growth, providing the resources we need to produce goods and services,
and absorbing and processing unwanted by-products in the form of pollution and waste.
Environmental assets contribute to managing risks to economic and social activity, helping to
regulate flood risks, regulating the local climate (both air quality and temperature), and maintaining
the supply of clean water and other resources.
This underpins economic activity and wellbeing, and so maintaining the condition of natural assets
is a key factor in sustaining growth for the longer term. Correspondingly, economic growth
contributes to the investment and dynamism needed to develop and deploy new technology,
which is fundamental to both productivity growth and managing environmental assets.
It is critical that we address these issues now. We face significant environmental challenges, both
in the UK and globally, from tackling dangerous climate change to managing threats to our water
resources and biodiversity. Far from reducing the urgency of this challenge, the economic downturn
and subsequent recovery provides an opportunity to shape the future economy and set us on a
sustainable growth path.