Land is not being used to its best advantage according to a new study by Ikerbasque Professor Unai Pascual from the Basque Centre for Climate Change (BC3) and University of Cambridge, and a team of environmental economists from Europe.

Research published in the journal Science (5th July 2013) shows that allowing land use to be determined purely by agricultural markets results in considerable financial and environmental costs to the public.

While the research has looked specifically at the UK, the same methods could be applied to any area of the world with similar results for many countries. Land use in most of Europe is dominated by agriculture. Nearly half the total annual value of EU agriculture is based on public financial support surpassing 70%, 40% and 30% in the case of Ireland, UK and Spain, respectively to name a few.

The research team, led by Prof. Ian Bateman from the University of East Anglia, UK, looked at the value for money of such public support in the UK where half a million land use records were used and found that current land use patterns represents poor value for society relative to this subsidy level. The study suggests that a refocusing of public policies could substantially improve the situation.

Alongside tangible financial costs in the form of agricultural subsidies, the research team calculated the economic value of current and future agricultural land uses due to climate change, including the value of food production and associated environmental impacts including greenhouse gas emissions responsible for climate change and reduced recreation for people.

They also took into account the impact of declining wild species and biodiversity caused by intensive farming. Looking to the future, the research weighed up the consequences of alternative land uses and assessed a range of alternative scenarios going forward to the year 2060.

The study demonstrates the importance of bringing ecosystem services into decision-making and to make full use of the potential gains from working with the natural environment and the underpinning biophysical processes. The study acknowledges that this does not come without practical challenges. A key challenge concerns the mechanics of securing the participation of farmers in delivering land-use changes to benefit society.

A recommendation that the research team puts forward involves the reform of the European Union's (EU's) Common Agricultural Policy (CAP). Recasting the CAP as a Payment for Ecosystem Services mechanism would reward farmers for delivering a bundle of key of ecosystem services including climate change mitigation by the reduction of emission of greenhouse gases, water regulation, recreation and biodiversity conservation.

Prof. Unai Pascual said: "This study provides evidence that conventional support for intensive agriculture in Europe is not working well enough for society. Policy should instead confront the reality of over-relying on agricultural markets as this generates unnecessary costs to society in terms of negative environmental impacts, many of which may be irreversible such as biodiversity loss."

"We have put a value to such costs and found that if market dominated agricultural policies in Europe are not changed we will also continue to see a reduction in the flow of benefits that landscapes offer to society (now and for future generations)".

"With the evidence at hand it is imperative that there is a U-turn in land use policies that allow to maximize the economic benefits of landscapes by reducing greenhouse gas emissions, reducing water pollution, enhanced recreation and urban greenspace, and improvements in biodiversity".

"The EU's Common Agricultural Policy must account for the cost of not working with nature. It is time to reward farmers for securing the vital ecosystem services that are highly valued by society. Farmers can be the stewards of our landscapes so that we as a society we can pass them in a healthy state to the next generations."

Ikerbasque Professor Unai Pascual is the leader of the "Climate and the Natural Environment" research strategy at the Basque Centre for Climate Change (BC3) and is Senior Lecturer at the University of Cambridge. The research was funded by the UK National Ecosystem Assessment (NEA) and its Follow-On program (which are together supported by the UK Department for Environment, Food and Rural Affairs (DEFRA), the devolved administrations of Scotland, Wales and Northern Ireland, the Natural Environment Research Council (NERC) and the Economic and Social Research Council (ESRC)); and the Social and Environmental Economic Research (SEER) project.

Reference: Bateman, Ian J., Harwood, A., Mace, G.M., Watson, R., Abson, D.J., Andrews, B., Binner, A., Crowe, A., Day, B.H., Dugdale, S., Fezzi, C., Foden, J., Haines-Young, R., Hulme, M., Kontoleon, A., Lovett, A.A., Munday, P., Pascual, U., Paterson, J., Perino, G., Sen, A., Siriwardena, G., van Soest D., and Termansen, M. "Bringing ecosystem services into economic decision making: Land use in the UK Science on July 5, 2013.