The Biodiversity Offsetting Scam

I recently contributed to a Government Consultation on Biodiversity Offsetting.

This scheme aims to replace complex wildlife protection legislation with a scheme to allow developers to destroy wildlife on their development and paying for that 'biodiversity' to be created elseware. On the surface this is actually a good idea and could enhance the overall biodiversity of the UK.

BUT! This is not what will happen, it is in fact just a massive scam (just like the Carbon Offsetting Scheme) to funnel ever more profits into the pockets of landowners and bankers. As you un-peel the onion of the economics of wildlife destruction we can get to the root problem. That destroying wildlife is very profitable as the profits go mostly untaxed into the hands of the lucky few who get permission to destroy Biodiversity & own the land. If we just taxed wildlife/land destruction (shifting the taxes off  income tax and VAT so it would have no negative impact on the economy) we could square this circle and have better use of land, more economic activity and more wildlife! The best way to achieve this is by the tax shift to 'Land Value Tax' and specific taxes on the destruction of priority habitats and wildlife (economist call like to call these taxes on externalities or Pigovian Taxes )

Of course the landowners and bankers would loose their huge profits and be worse off, so we know why mainstream politicians avoid this solution. The loss of monopoly rental income would remove so much of the corruption inherent in our political and economic system, but that system will kick and scream like a spoilt child if we ever manage to achieve it.

Biodiversity Offsetting

In theory Biodiversity Offsetting (BO) is far better than the system than we have at present and one I wholly support. But, and it’s a big but, who judges the quality of offsetting?

If it were to work it must have these characteristics:

1.  Local - only a short distance from the disturbance. This must be firstly done by incorporating wildlife habitats and corridors within the development itself or then very close. A very high multiplier could be used for distance from the development
2. Not affect existing wildlife - it really must come from marginal farmland and not spent on wasteful habitat management schemes that are transitory in nature. (certainly not on paths and interpretation!)
3. Administered by professional ecologists with no conflict of interest, independent of government or commercial pressure
4. Be permanent and inailable. Unlimited time conservation covenants (legal charges on land – held by HMG through Natural England)

Myself & the wider Conservation Community  have justified fears that BO will just be manipulated to create more money for banks, landowners and the other monopolists who own land and are looking for private rental income of the ownership of natural assets through gaining planning permissions. Government policy of the last 30 years while on the surface looking reasonable, by sleight of hand, seams determined on increasing the rental value and capital value of land. The fear is that BO will be no different and will end up with complicated lease & brokerage arrangements that only benefit landowners and the financial services industry in complicated BO ‘banking’ arrangements and see little or no improvement to the quality of wildlife habitat in the UK. Similar carbon offsetting arrangements have lost all credibility due to fraud and abuse on a massive scale.

The real solution would be the tax shift to Land Value Tax, with externality taxes, as a yearly charge on top of an Annual Land Value assessment for loss of protected species, and create a general fund whereby these Land Rents go to the fund which is used only to purchase land (at base agricultural rates & on land which has little biodiversity value) which will have an inaliable right in perpetually and be designed to strategically create a large network of wildlife  corridors linking large nature reserve complexes. This would have little economic impact as this land will be marginal land of little value to farming or developers.

If we analyse the development problem 'Dialectically' between the two major economic counterparties that have force on the political debate we better see these forces at play.

Forces Against Development on New Sites:

By stopping development that harms nature we increase the value of existing developed land as we have expanded use for it. Those who own existing developed land wish to stop development (the Nimby Syndrome) as this increases the capital and rental value of their land.  This has a direct economic impact on the country reducing productivity and the quality of life of citizens but at the same time protecting some wildlife rich land.

Forces For Development on New Sites

In general those with undeveloped land wish to see it developed as the windfall profits of such planning permissions are huge.

Those without land want more land developed as this reduces the overall price of getting access to land for their housing and employment.

Wildlife is destroyed as new developments are often very inefficient in land use and there is no pressure to better use existing brown filed sites and underdeveloped sites.

The Solution:

The solution to this conundrum is the Land Value Tax. Existing landowners will pay an annual charge based on the monopoly or unimproved 'rental' value of their land, so if more land is developed they pay less tax and if less land is developed they pay more tax thus taking away the advantage and disadvantage and neutralising the vested interest they have. As 'nimbyism' works on the local scale this forces development to new areas, such are the problems of green belt land creating environmentally damaging commuter dormitory towns and built up areas very inefficiently utilised such as in London.

Under Land Value Tax landowners of underdeveloped land will not benefit from the granting of planning permission as that increased rental value will be extracted in tax. Developers can still turn a modest profit from construction but as no huge windfall gains are to be made there will be no incentive for large lobbying efforts to gain planning permission.

Overall the effect of a land value tax will be to concentrate development of existing land and make better use of it, Such as in London improvement in the efficiency of the use of land could take away all the pressure for dormitory towns and development in the South East, leaving more for nature.

The overall effect of Land Value Tax will mean Instead of massive windfall gains falling into the hands of those who own natural assets like land if they manage to get planning permission, now there will be a cost to the yearly use of such natural assets and thus much wiser use of it.

Land Value Tax also benefits industry as a whole as it will promote development of land to its ‘best  use’ creating more efficient towns and transport infrastructure and allow other taxes such as VAT and income tax to be reduced, so stimulating job creation and higher incomes.

We have a simple choice with land value tax, to adopt this economic system will make most of us wealthier, with more jobs and a better environment, not adopting it will mean that there are huge profits to be made from the destruction of our Biodiversity and on top of that ever more of the nations wealth disappearing into the hands (most often offshore secret bank accounts) of an elite group of landowners and bankers from the pockets of the rest of us.

Treason Part 3: The Temple of Doom

The green agenda has been hijacked, reveals Fred Harrison. To inflate corporate profits, the last of the commons (oceans and heaven) are being privatised in a financial scam that will create the Land Barons of the 21st century. Planet Earth is being converted into a Temple of Doom. It will take a new social contract with nature to prevent the looming ecological disaster.

 

Who owns the fish in the sea?

The High Court in the UK  has ruled in favour of redistributing some fishing rights from big producers to small-scale fishermen, a small victory for the 'little Guy' but this poses the Question: Who owns the fish in the sea?

There is a more fundamental issue at stake in the legal battles surrounding fishing subsidies & quota allocation and that is in the legal question: Who owns Nature?

• Do we all own nature?
• Does the state own nature?
• Has the state the right to sell nature?
• Should we all share in the fruits of nature?
• Is there a difference between owning the fruits of our labour as to opposed to the gifts of nature?
• How can we make a economic system that can simply reflect the difference between the free gifts of nature and that which we make ourselves?
• What is nature

Many of the large fishing companies have been auguring a legal case that state given fishing quotas they have acquired are ‘their property’ and not the governments, so they must be compensated if quotas are  allocated differently to what they are now. This legal fiction lies at the heart of many of the economic and environmental calamities that are befalling us.

Fishing quotas are just one of a huge range of free gifts given to us by nature: electromagnetic spectrum, water abstraction licences, intellectual property rights, mineral rights,  airplane landing slots and some types of agricultural subsidies. Ultimately we can extend this question to who owns the land. Economists use the term ‘Land’ to describe all such natural monopolies. Because such huge profits can be made by the acquisition of such rights we see this throughout history, people try to acquire the legal ownership of the bounty of nature, to benefit without personal effort.

This has been extended in to the right to pollute and the awful carbon trading scheme where clued up environmental campaigners have to fight against those less wise in lobbying to stop carbon trading schemes. We also see this reflected in how such ‘ownership rights’ are traded for personal gain.

Everyone loses when such rights are privatised as the rest of society has to bear the cost of these monopoly rights when getting access to these gifts of nature, i.e. when you buy fish. As these rights are being lost by us all, this loss of revenue to Government must be replaced by taxes on the productive part of our economy, forcing a high rate of unemployment and increasing poverty. The higher cost of goods and services are directly related to poverty and unemployment. Economists call this the ‘Margin of Production’ i.e. the point at which someone’s labour becomes economically useful.

My own view is that no one owns nature, if you are of an Abrahamic faith this is the basis of the Covenant, of if you are a wholly greeny like me it is just natural justice.

This is the basis of the moral doctrine of Land Value tax, Land being all of nature’s gifts.

This economic system has the solution to fishing quotas, water use and land use. If we had a system where fishing quotas were auctioned every year to the highest bidder, we would control the amount caught and promote efficiency in our fishing industry. All of the population would benefit as the revenue received by Government from the auction of these fishing rights would offset other taxes creating more economic activity and jobs for us all. Such a system would help make fishing self-policing. The really important effect of such a system would be in the way the rarity of fish, in economics its ‘monopoly value’, would then be internalised in the cost of the fish to the consumer, so self-regulating  the amount we catch of each species and protecting this gift from nature.

We can extend this negative feedback system to all of nature’s gifts, protecting our natural resources for the future, while at the same time reducing poverty and inequality. Such are the concepts behind ‘Land Value Tax’ and ‘Georgist’ economics.

To answer the question as to who owns the fish in the sea? we all should, but the fisherman can earn his wages from when he brings it back to land. 

So the fishing rights saga has a small positive but globally we are losing the battle as a rapacious financial system buys exclusive ownership of all of nature’s gifts so they can charge rent for access to those gifts from all humans and our future generations. Mass poverty will continue, no matter how much progress mankind makes and a new class of landed Barons can live like parasites upon us as we squander what nature has bequeathed.

Zen and the Art of Land Value Tax

 Or why the green movement has trouble accepting the one policy that will guarantee their objectives.

 Land Value Tax (LVT) in its full theory is very complicated and to understand it properly requires a lot of thought and to mechanistically work out how it is fundamental to the protection of nature & natural assets.

I myself have been attacked at conferences by well-meaning greens who’s hostility and almost zeal at condemning LVT leaves me depressed and confused as to their thinking. Why such people should have such anger, denial and almost willful need not to educate themselves of the economics of environmental destruction needs further investigation.  My best answer for this came from the similarities to the title theme of Robert M. Pirsig's bestselling book ‘Zen and the Art of Motorcycle Maintenance’ exploring the ‘Metaphysics of Quality’.

Even though LVT is official Green Party Policy, explaining LVT to the leaders of the green movement can be arduous and their efforts to promote it both within and without the green party can seem lacklustre and unconvincing.

I am a huge fan of our one Green MP Caroline Lucas who bravely put forward a private members bill on LVT this year. Caroline has presented the bill in the media, on shows such as Radio 4's Today Programme, so well done. But I can tell from her tone in interviews that she does not truly see why LVT is the one policy that will achieve all of the Green Party’s aims and does not have the ability to communicate it. (then again who does….)

For those that need to investigate LVT the basic idea is that any ‘tax’ taken from a natural monopoly is good for the economy as it is taken from ‘the unearned income of monopoly’ and not from the productive economy, so more jobs and a healthier economy. The Land Value tax shifts the economic topography to make natural resource efficiency a certainty. It costs more, so all the decisions made by everybody will naturally tend to the more efficient use of the natural resources that are subject to tax such as land, oil, carbon and minerals etc. LVT is also the most redistributive of taxes and will vastly reduce income inequality. So with LVT we can have our cake and eat it. A world that will eliminate poverty, use natural resources as efficiently as possible, create more areas for wildlife and make our overall economy better, what’s not to like! Or more precisely why do so many people not understand.

While pondering why people in the ‘green’ movement have trouble understanding just why LVT is so important, often becoming hostile. My own thinking on this is because LVT, as a policy, is a mechanistic approach to environmental protection, it is logical and is formed from a deep understanding of economic processes. Some people fear mechanistic approaches and look to cultural and emotional solutions.

I now refer to this as the ‘Zen and the art of Motorcycle Maintenance’ problem. In so much that one of the central messages of  the book; that a motorcycle rider did not want to maintain his bike because he blamed science and scientific approaches as responsible for hurting humanity, war famine, environmental destruction and so distrusted any mechanistic approach to life. This caused him to fear maintaining his bike properly and it would regularly break down causing a vicious cycle of distrust in mechanical things. The protagonist used this example to look at the relationship between peoples thinking and how that affects their ability to cope with real day to day problems and how to get them to adopt simple mechanistic approaches that aided their everyday lives. Such is Zen

In my critique of those in the Green Movement that are hostile to LVT they are like the protagonist’s friend ‘John Sutherland’ who refuses to maintain his motorcycle. These people are often the personality types that are interested mostly in gestalts; the romantic viewpoints, focused on being culturally and emotionally ‘green’ and not on rational analysis.

Myself and my Fellow LVT supporting greens are like the protagonist and those who seek to comprehend the details and inner workings, and master the mechanics of either motorcycles or the economics of environmental destruction and world poverty.

To the Green sceptics of LVT – please read Prisig’s book and replace the motorcycle with the science of economics. An understanding of economics is not ‘ugly’ or ‘dehumanising’. You must open your mind so it is capable of seeing the beauty of technology & economics. Economic science, just like motorcycle maintenance, may be seen as dull and involve tedious mental drudgery or it could be the most enjoyable, enlightening and rewarding pursuit in trying to protect our planet and those that live upon it; it all depends on attitude.

Prisig did not discuss economics and he himself was not that aware of it, but to those of us who ponder the issues of creating a ‘green economy’ we can look at a wealth of books that have looked into this. Any book by economist Henry George or Fred Harrison will be a good starting point for understanding the concepts behind Land Value Tax and will form the mechanistic understanding that allows then to understand Green economics. Trying to understand Green economics without such underpinning concepts is going to be frustrating and unrewarding.

So Land Value Tax is deeply ‘Zen’……

http://www.ethicaleconomics.org.uk/2012/08/the-traumatised-society/

 http://www.henrygeorge.org/pcontents.htm

How do we Value Rural Britian

This week there has been many reports on second homes. Our recent Budget speech was basically a charter to give public money to underwrite loans to buy homes. Most of these will be sold to speculaters,  landlords and people wanting a second home and not for the purpose the deceitful chancellor George Osborne stated; in helping people buy a house for their own occupation.

Leading on from this press activity former poet laureate, Sir Andrew Motion, now head of the campaign to Protect Rural England, has made the headlines in all the UK media, calling for tax increases on second homes in the countryside to preserve communities. He is of course correct but if we dig deeper into what do we as a society want to see in the countryside we must look at the issues and values that will save rural communities.

A number of papers have posed the question of how do we value rural Britain and protect its social and natural character.

Here is my response:

The Value of Nature is complex – (once you look into what is meant by value and the psychological and economic ramifications of value theory and its relationship to natural wealth)

The psychological value of nature, is best expressed in economic terms, in the uplift in land values of rural properties. This is a truly staggering amount of money. The privatisation of this ‘uplift’ is a form of cheating, robbing from everyone for the monopolistic benefit of the few. This uplift in value should belong to the community as a whole and those that take away this ‘value’ should compensate the rest of society in the form of a ‘rent’ for that loss.

This sounds complex but in essence the remedy that will solve this, is my stuck record one, that of taxing the value of land and other natural assets.

The issues that I think we want to address in the countryside for people and wildlife are:

1. Efficient use of land and natural capital like rivers etc.
2. Biodiversity protection
3. Free open access to natural wealth and enjoyment of the countryside
4. The right to own property in the countryside and have enjoyment of it
5. The right to make a living in the countryside

In all the issues, Land Value Tax is the mechanism that will achieve these objectives, with fairness, as it balances stewardship of scarce resources (such as having a lovely second home in the country), resource efficiency and is a constant force rebalancing inequality in Land access with freedom to have exclusive possession.

In general second homes demonstrate the division in our society and economy where those with  exclusive land ownership have a free ride when it comes to possession of scarce resources, while those that work and toil for their income are denied access due to high land prices and high taxes on that human effort.  Shifting taxation off of earned incomes and onto exclusive land possession will solve this problem fairly and efficiently. The uplift in value of rural properties is often far more than the taxation of the work that was needed to buy the property and pay the mortgage, this is Ricardo’s Law and this is the fundamental issue at the heart of economic unfairness that those that possess monopoly, of all kinds, have a huge amount of unearned income from the uplift in those values at the expense of those that do not possess and it is that very labour of people, intellectually & physically  that creates that increased value of the land.

A short lecture I gave on the Value of Nature:

The Real ‘underlying problem’

I listened to our Government's Chief Scientist,  John Bebbington, on Radio 4 this morning, he is retiring and has made a statement on three ‘underlying problem’ facing Humanity: Climate Change, population Growth, and Sustainable cities.

What annoys me about such media debate is they seem to avoid all discussion on actual remedies to the three ‘underlying problems’ he raised. Instead of examining the solutions, the debate concentrated on anguish, wringing their hands with worry; saying it is really difficult and if only we tried a little harder, and it’s going to cost a fortune to protect the planet, and nobody wants to bear the cost of doing so etc...

The real ‘underlying problem’ is our legal, political and economic system that enshrines the right of Government bodies & private individuals to own the ability to destroy and monopolise natural assets without compensation to the rest of society & ‘the planet’; yet it is the one issue that never seems to be challenged by mainstream media and they seem incapable of discussing it. This is further shown where normally ‘good’ people find it hard to discuss population control because it has so many negative connotations with totalitarianism and despotic control. If we just looked at factors that really do, ‘statistically’ control population and are socially acceptable we can pursue them, such factors are about personal & financial security, quality education and equality in ownership of opportunities and the resources needed to sustain life.

So the real huge elephant that is in the room is not the problems of population, climate change and the sustainability of cities that Professor Bebbington highlighted, but that there is a simple coherent remedy to all these problems. This remedy will cost society ‘nothing’, it will impoverish no one, it will help feed the poorest in society, tackling poverty, crime and ill health. This remedy will free our creativity and enterprise to focus, naturally, on the three great challenges facing humanity that Bebbington quite correctly identified.

The Remedy? Just transfer all existing taxation to Land Values and natural resource exploitation, and include in our taxation structure environmental and social externalities. In addition, if we want to get to grips with fundamental issues we need a system of ‘Money Supply’ that reflects the wealth of human labour and the natural assets available to us, issued as credit and not debt.

How to control population: 

Education, equality, and security for the future will bring down birth rates and we will end up reducing population. These have been well observed, first by the economist Henry George in 1870’s, while debunking the pseudo-science of Thomas Malthus, and in just about all societies these are the deterministic factors in birth rates. If you believe in Malthus the human populations will always rise to carrying capacity and thus enshrine natural resource depletion and poverty. In the real world, the Malthus theory breaks down as there are numerous examples where well-ordered and fair societies have low birth rates and dysfunctional societies have high birth rates. http://www.henrygeorge.org/pchp6.htm

How to make cities sustainable: 

capture the value of the monopoly of land as government revenue and stop the formation of land monopolies that makes cities perform so inefficiently and ensure social division and poverty. http://savingcommunities.org

Climate change: 

To tackle climate charge people who use natural resources and thus must pay the externalities that are involved in a form of tax (offsetting other taxes) and thus we will respect nature and make its use efficient and more sustainable without the need to create poverty. New technologies that do not abuse nature will flourish by directing ‘Human Action’ to concentrate on activities that do not harm the planet and that those activities will remain untaxed by society through income & trade taxes and by monopolists through ‘economic rent’.

Taxing land and natural resources and externalises will mean the cost of that use is included in every economic transaction driving down our harm to the planet and leaving nature alone to rewild. It means there will be no poverty and enough resources to provide excellent education and health care for all free, it will stabilise society and reduce crime and war and provide the security to allow people to have fewer children.  All without the force of government.

Just as a plastic bag tax reduced use by nearly 90% so taxes on all land and natural resources will immediately get us to use more efficient transport, better-insulated homes and reduce the environmental costs and concentrate human development on less and less land.  And no one has to be persuaded, except the politicians that keep our taxation system on the shoulders of the hard-working people who create the wealth of the world while allowing the abusive owners of land and natural resources off the hook Scott free.

http://www.monbiot.com/2013/01/21/a-telling-silence/

My lecture on the subject - skip over the first pat to 12 mins in