HM Treasury and the economics of climate and nature

Evidence submission to the UK Environmental Audit Committee’s inquiry
Tim Jackson, September 2026

Image: courtesy of Joshua Brown / Unsplash

The Environmental Audit Committee is currently examining the role of HM Treasury in shaping the UK’s response to climate change, nature loss and wider environmental sustainability, including how environmental risks and long-term impacts are accounted for in public investment decisions.

In evidence submitted to the inquiry earlier this year, CUSP co-director Tim Jackson examines the assumptions about economic growth, wellbeing and discounting that underpin the Treasury’s The Green Book guidance. He argues that these assumptions may undervalue long-term investment in climate and nature, particularly where investments are intended to prevent irreversible or catastrophic environmental harms.

Tim Jackson’s submission calls for Treasury appraisal methods to better reflect ecological limits, long-term risks and the importance of ecological stability as a precondition for future prosperity. It recommends reviewing the growth assumptions within the Social Time Preference Rate—used to discount future costs—, testing investments against lower-growth and climate-constrained scenarios, and developing clearer guidance for appraising investments aimed at reducing systemic environmental and climate risks.