The Department for Environment, Food & Rural Affairs has updated the Enabling a Natural Capital Approach (ENCA)guidance it published in January 2020 for policy and decision makers to help them consider the value of a natural capital approach.

Defra has updated the guidance to make the relationship between ENCA and guidance in HM Treasury Green Book published in 2020 on how to appraise and evaluate policies, projects and programmes clearer.

Defra advises the following organisations to make use of ENCA resources:

• government economist or analyst
• public sector organisation interested in understanding the scientific and economic evidence around the natural environment
• private practitioner, interested in natural capital evidence, tools and resources used in government

ENCA aims to:

• build capacity among users to assess and value the natural environment by providing comprehensive information and resources
• reduce search costs for analysts and decision makers
• provide a platform to update tools and guidance as knowledge develops
• identify new evidence and areas for development

ENCA is recommended for use by HM Treasury's Green Book: appraisal and evaluation in central government (2020) and represents supplementary guidance to the Green Book.

Defra’s ENCA guidance is a comprehensive document providing information and resources for Natural Capital which covers:

• the natural capital framework
• economic valuation of the environment
• how project or policy appraisal can incorporate natural capital
• natural capital accounting principles and methods, benefits and challenges
• applying natural capital at a local level
• ENCA assessment template

Accompanying documents include the ENCA services databook which provides around 200 sources of selected biophysical and valuation evidence for:

• ecosystem services such as food production, flood regulation and recreation
• environmental impacts such as air pollution and noise
• tailored guidance and a simple explanation of each impact

The ENCA assets databook collates over 100 UK data sources, tools and studies for the following 8 natural capital asset categories:

• urban
• enclosed farmland
• mountain, moor and heathland
• freshwaters
• woodland
• coastal margins
• marine
• semi-natural grassland

ENCA featured tools include summaries of tools developed or supported by Defra and its agencies. The tools provide:

• valuation evidence
• biodiversity metrics
• valuation of outdoor recreation
• ecosystem services management

Defra has also published a number of ENCA case studies to provide real-world examples of how:

• natural capital approaches are used at a range of spatial scales
• economic valuation is used to inform decision making
• natural capital accounting works at various spatial scales
• projects attempt to create new streams of income from investment and maintenance of ecosystem services

Yorkshire Water Natured Based Solution Clifton Works

The case studies include a wide range of projects related to a range of water environment issues, including:

• Medway Estuary and Swale Flood and Coastal Erosion Risk Management Strategy (FCERM) strategy
• A study about developing a sustainable approach to managing flood risk through planting 44 hectares of woodland and improving farmland management at Pickering in North Yorkshire.
• A nature based solution applied by Anglian Water to reduce water pollution through the creation of a wetland at its Ingoldisthorpe water cycling centre
• The Ecosystem Services Assessment (ESA) undertaken to integrate environmental considerations into decision-making during the development of the Anglian Water's Water Resource Management Plan 2019.
• Four examples of Corporate Natural Capital Accounting developed using guidance developed by the Natural Capital Committee.
• A first full natural capital account for National Nature Reserves owned and managed by Natural England.
• A natural capital account of Irwell Management Catchment's (IMC) waterbodies, identifying where ecosystem services can be invested into to enhance IMC's natural capital.
• An ecosystems approach including an ecosystems service assessment to secure funding for the regeneration of Mayesbrook Park and its associated floodplain.
• Pilot testing the use of existing surface water drainage charge mechanisms to incentivise increased implementation of SuDS as a means to improve flood resilience and water quality, using Manchester as a pilot location.
• NaturEtrade - a market-based platform developed by Oxford University under EU-funding to generate payments to landowners for their ecosystem services.
• Wessex Water's reverse auction to create a market for delivering nitrogen reduction, using Entrade, an online platform for collaboration with farmers and landowners.
• South West Water - delivery of strategic land restoration in the West Country using Upstream Thinking, an initiative which looks at how land is managed to prevent harmful substances from entering into rivers.
• Qualifying, quantifying, and monetising benefits of integrated water management strategy, incorporating Sustainable Drainage Systems at exemplar site for an eco-town in Bicester, Oxfordshire.
• A retrospective natural capital assessment of alternative capital scheme options proposed for an upgrade project at Yorkshire Water's Rivelin Water Treatment Works site, using the Natural Capital Protocol (NCP).
• Quantification and valuation of ecosystem service benefits of peatland restoration in Bamford catchment to inform cost benefit analysis of Severn Trent's business plan scenarios.
• Cost-benefit analysis of the Thames Tideway Tunnel as a solution to sewage overflows and resulting pollution in the river.

Click here to access Defra’s ENCA guidance and accompanying documents online.