SoNaRR 2025 Aim 4: A regenerative economy with sustainable levels of production and consumption

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This information is part of the State of Natural Resources Report 2025

Our pathway of economic development has raised material standards of living in Wales and across the world. However, in the process of getting to where we are, we have degraded our natural resources to the point where the demands we make of nature far exceed its ability to meet them (Dasgupta, 2021). Some progress has been made on decarbonising the Welsh economy. Nonetheless, Wales continues to face significant challenges in achieving a “Regenerative Economy, with Sustainable Levels of Production and Consumption”.

This 2025 assessment builds on SoNaRR 2020 and The Dasgupta (2021) Review on The Economics of Biodiversity, commissioned by HM Treasury. The assessment also aligns with the mission-based priorities set out in the Future Generations Report 2025, with respect to achieving a well-being economy in Wales.

The transition to a regenerative economy is essential if we are to live within the ecological boundaries that define the limits of the well-being economy. As highlighted by the Future Generations Commissioner, economic policies, incentives and investments all need to be explicitly designed to address the climate and nature emergency, alongside inequality and retaining wealth within communities. With the right investment and skills development, SMNR also provides opportunities to create decent jobs, build community wealth, as well as a focus for all parts of the economy to work together to build back up the stocks of nature in Wales for the benefit of current and future generations.

Vision

Achieving Aim 4 would result in Wales moving from an economy that degenerates its natural resources and ecosystems, through a sustainable, circular economy, which does no net harm and uses its fair share of natural resources, to a regenerative one which works with our natural systems to restore nature.

Delivering this vision advances the Well-being of Future Generations goals and contributes to progress against the National Indicators for: Capacity (in MW) of renewable energy equipment installed (Indicator 12), The global footprint of Wales (Indicator 14), Amount of waste generated that is not recycled, per person (Indicator 15), Percentage of people living in households in income poverty relative to the UK median: measured for children, working age and those of pension age (Indicator 18), Percentage of people in employment (Indicator 21), Percentage of dwellings with adequate energy performance (Indicator 33), Emissions of greenhouse gases within Wales (Indicator 41), and Emissions of greenhouse gases attributed to the consumption of global goods and services in Wales (Indicator 42).

Key messages

We continue to use more than our fair share of resources:

  • If the world lived like Wales, humanity would need 2.08 Earths to sustain itself. This means Welsh consumption is creating significant unsustainable pressures on natural resources.
  • The agricultural sector uses 90% of land in Wales. These productive ecosystems can also support a variety of species (e.g., farmland birds), safeguard and enhance natural resources (e.g., soil quality) and supply a range of regulating and cultural services (e.g., flood protection and recreation). However, we do not know how much of these are managed to maintain their regenerative capacity and supply these benefits beyond those linked to crop and biomass provisioning.
  • At least 48% of all forests in Wales are managed to the UK Forestry Standard to maintain biodiversity and ecological functions, alongside social and economic functions (this is the known extent of woodland certified through the UK Woodland Assurance Standard).
  • We need to prevent more waste from being generated in the first place through better product design and increasing activities like repair and remanufacture.
  • Wales’ renewable energy sector is critical for achieving net zero. It is vital that development of this sector is planned to protect the resilience of our ecosystems and build community wealth.
  • We need to work together to achieve Aim 4: Citizens need to be empowered to adopt more sustainable lifestyles. Many businesses also want to contribute; 5,000 have signed the Green Growth Pledge | Business Wales.

The economy is still degrading natural resources in Wales:

  • Pollution from rural areas (including agriculture and forestry), the waste water sector and urban and transport infrastructure are degrading Wales’ rivers, lakes, groundwaters, canals, estuaries and coastal waters. Only 40% of these water bodies are of good status.
  • Air pollution from energy, transport and industry has decreased but still impacts many people. Emissions of ammonia from the agriculture sector remain high at around 21 kilo tonnes in 2021. This is impacting habitats and people.
  • Pollution of soils and waters from past and present industry and landfilling is a concern. This includes future impacts on water resources from persistent organic pollutants, micro-plastics and antibiotics used in different economic activities.
  • The construction sector needs to increase its activity if housing targets in Wales are to be met. However, this needs to be in the right places, recognising these developments typically come at the expense of farmland, coastal margin ecosystems and urban green areas and may occur in areas of flood risk.
  • We need to decouple our economic activity from these pressures for our long-term economic well-being. Chronic risks from changes to earth systems, biodiversity loss, natural resource shortages and pollution, and acute risks from extreme weather are among the greatest risks our economy faces.

A regenerative economy goes hand-in-hand with a wellbeing economy

  • Nature-based solutions (NbS) can contribute to economic productivity, deliver valuable societal outcomes, and restore nature. Due to the networked functionality of nature, nature-based solutions can deliver multiple value streams from a single investment in nature. Multiple values can be realised through buyers for high-integrity outcomes from a single NbS intervention (e.g. water quality, biodiversity and recreation-focussed buyers for outcomes from establishing riparian woodland), making co-funding or co-investment possible, which can deliver improved cost-benefit performance for the nature-based solution approach for all funding partners.
  • Many jobs in the economy depend on the sustainable management of natural resources. Employment data and sector analysis estimate that the agriculture, forestry & fishing sector, the water sector, nature based tourism, renewable energy, and the circular economy sectors can support around 118,000 jobs, providing opportunities for fair work.
  • Promoting social enterprises and building community wealth can realise the potential of Sustainable Management of Natural Resources to build community wealth.

Follow the link to the full Aim 4: A regenerative economy with sustainable levels of production and consumption assessment in our State of Natural Resources Report 2025.

Read this assessment



Evidence needs

Ensuring the success of transformative change demands a rigorous approach to evaluating benefits and trade-offs. We must strengthen our evidence base to reflect nature’s true contribution to well-being, giving weight to cultural and relational values alongside economic data. This clarity allows businesses to fully integrate nature-related dependencies into their plans, strategies and operations.

Confidence in nature-based solutions for addressing water quality requires risk-based frameworks to support experimentation and their deployment. Additionally, understanding the potential size and integrity of the NbS market in Wales is vital for attracting investment without compromising quality.

Land use planning in Wales would benefit from an integrated map of different land use activities and environmental data. This would help planners understand which land is most appropriate different purposes. Understanding where the economic sectors in Wales depend on resilient ecosystems can help identify where to prioritise action to enhance resilience in the context of pressures from climate change and other drivers of change.

Key evidence sources

Explore some of the evidence we have used to inform our assessment:

Case studies

Monitoring and reducing ammonia

Ammonia is a major atmospheric pollutant and is harmful to human health when combined with other industrial pollutants. When deposited on land, ammonia can acidify soils and freshwaters, ‘over-fertilising’ natural plant communities. The extra nitrogen can increase the growth of some species such as rough grasses and nettles, which out-complete other species. This project aims to monitor and reduce ammonia emissions from agriculture and is funded through the Welsh Government’s Nature Networks Programme.

Natural Resources Wales / Project to monitor and reduce ammonia emissions from agriculture

Assessing Welsh Aquaculture Activities

The Assessing Welsh Aquaculture Activities mapping tool and interactive dashboard display the sensitivity of marine biotopes in Wales to the potential pressures associated with 11 different aquaculture activities. They can be used to gather and develop information and evidence to inform an environmental appraisal for an aquaculture activity of interest and identify areas suitable for aquaculture enterprises. While the AWAA Project resources have not referred to environmental conditions, or the footprint, or intensity of activities, they can be used to support environmental assessments or reports.

Assessing Welsh Aquaculture Activities | Wales Environmental Information Portal

Sustainable Farming Scheme

Welsh Government’s Sustainable Farming Scheme, which starts in 2026, aims to support farmers in the sustainable production of food whilst addressing both the climate and nature emergencies. It addresses the Sustainable Land Management objective in the Agriculture (Wales) Act 2023 to maintain and enhance ecosystem resilience. The scheme will support climate resilience and should support Nature Based Solutions. 

Introduction to the Sustainable Farming Scheme | GOV.WALES

 

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