PolicyLens

Green - Environment

Increase nature and DEFRA funding

Add funding for nature protection, landowner grants and environmental enforcement.

Last updated: May 2026.

Read the policy-specific methodology note

Policy baseline

Green environmental pledges include more DEFRA funding and landowner grants for nature. Economic value is real but hard to monetise.

  • Targets biodiversity, enforcement and land management.
  • Benefits are long-run and partly non-market.
  • Grant additionality is uncertain.

Core trade-offs

The direct beneficiaries are nature, farmers and affected communities. The costs fall mainly on taxpayers and land-use opportunity costs. The main economic question is benefits may not show in gdp quickly.

  • Nature, farmers and affected communities gain most directly.
  • Costs fall mainly on taxpayers and land-use opportunity costs.
  • Key risk: benefits may not show in gdp quickly.

Fiscal impact by 2028-29

+GBP 3.0bn to +GBP 9.0bn. Central estimate: +GBP 4.5bn.

  • Positive numbers mean net fiscal cost; negative numbers mean Exchequer savings.
  • Main channel is the scored tax, spending or delivery change.
  • Offsets depend on tax receipts, behaviour and pass-through.
  • Range reflects uncertain implementation and economic response.
  • This is not an official costing.

Economic impact by 2028-29

  • Jobs: Green construction and supply-chain jobs rise; fossil-linked jobs face transition risk.
  • Wages: Skilled retrofit and energy workers may gain; households gain only if bills fall.
  • Prices: Upfront costs are high; long-run energy bills may fall if delivery succeeds.
  • GDP / productivity: Potentially positive through lower energy imports and innovation; delivery bottlenecks can weaken returns.

Assessment

This is a real trade-off, not a free gain. Nature, farmers and affected communities benefit, while taxpayers and land-use opportunity costs bear most costs. Overall output depends on behaviour, capacity and pass-through.

Confidence: Medium-low. Higher on the policy target and fiscal channel; lower on behaviour, pass-through and economy-wide effects.

Main risks

  • Supply-chain limits: Skills, grid connections and materials can delay delivery.
  • Cost overruns: Retrofit and energy projects often face uncertain unit costs.
  • Weak additionality: Public money can replace private investment rather than add to it.

Safeguards

  • Publish project pipelines and unit costs.
  • Use competitive procurement where possible.
  • Report additional private investment mobilised.

Academic evidence

Banerjee and Duflo, Review of Economic Studies, 2014

Credit constraints

Some firms are credit constrained, so public finance can support investment when well targeted.

Relevant to development banks and business finance.

Do Firms Want to Borrow More? (2014)

UK government evidence

Green Party of England and Wales, 2024

Green manifesto

The manifesto defines the tax, spending, climate, housing and public-service proposals modelled here.

Used to define the scenario, not as an official costing.

Manifesto for a Fairer, Greener Country (2024)

Climate Change Committee, 2025

Climate progress report

CCC reports persistent delivery gaps across buildings, transport, power and land-use decarbonisation.

Supports the need for investment while cautioning on deliverability.

Progress in reducing emissions (2025)

HM Treasury, 2025

Spending Review baseline

Spending Review settlements set the counterfactual for departmental capital and resource budgets.

Used to separate new spending from existing baselines.

Spending Review 2025 (2025)

Sources

Other Green policies

PolicyLens estimates are illustrative and should not be treated as official costings.