Biodiversity net gain: Campaigners call for policy framework to police England’s biodiversity offsets market
UK government should introduce secondary legislation and guidance that can provide further clarity about how the biodiversity offset market will work and be policed, non-profit argue
England’s biodiversity offset market could hit £300m annually as housing and infrastructure developers ramp up investment in projects that can enable them to meet the biodiversity net gain rules set out in the Environment Bill.
That is according to a paper published this week by conservation group The Nature Conservancy (TNC), which warns that a number of critical components of England’s nascent biodiversity net gain (BNG) market “require further clarity” to enable the government to meet its stated goal of protecting the environment.
In the briefing document, entitled Biodiversity Net Gain in England, the non-profit predicts England’s biodiversity offset market will grow rapidly as infrastructure developers look for ways to compensate for the environmental impact of their projects over the coming years. But it warns that a “well-designed regulatory framework” is essential for the scheme to operate effectively.
A poorly designed BNG scheme could generate “significant risks”, the report notes, including a situation where the scheme actually legitimises the destruction of nature rather than its protection by giving developers a “license to trash”.
As such, the TNC has this week urged policymakers in England to mitigate risks through “careful policy design” as it establishes a market for biodiversity offsets over the coming years, taking advantage of the experience of countries with more established biodiversity rules and markets, such as those in place in the US, Australia, Mongolia, Colombia, France, and Germany.
“Some essential building blocks are already in place in England, and others are under development, but a number of critical components require further clarity to achieve the best possible outcomes for biodiversity,” the report states.
Specifically, The Nature Conservancy has called on the UK government to introduce secondary legislation and guidance that can provide further clarity about how the biodiversity offset market will work in practice and be managed once the mandatory biodiversity net gain rule set out in the Environment Bill becomes law.
“To deliver policy efficiently and ensure clear market rules, it must include defined governmental roles and sufficient regulatory capacity,” the document notes. “Multiple government roles in the market could result in perverse outcomes and conflicts of interest.”
The government’s “core functions” should be to regulate BNG for individual planning developments, to monitor policy outcomes over time, and ensure sufficient regulatory capacity, the TNC said. “BNG places an additional burden on authorities already operating beyond capacity, and many local planning authorities lack ecological expertise,” the report states.
The government’s flagship post-Brexit Environment Bill is expected to be adopted this year, with net gain requirements becoming mandatory in the second half of 2023.
The TNC has also warned the nascent market needs more support to get off the ground, noting that government grants and tax relief could stimulate both the supply and demand of biodiversity offsets.
The Department for Environment, Food and Rural Affairs (Defra) was considering a request for comment at the time of going to press.
Elsewhere, the briefing paper notes that the current system could result in the preservation of existing habitats being neglected in the drive to create new biodiversity projects and could incentivise investors to back on-site compensation projects over off-site alternatives, despite these projects traditionally having less being less well managed and less effective at protecting biodiversity, the TNC has warned. It has also calls for the rules to be amended to require land managers to steward certain types of habitats for longer than 30 years.
Overall, the TNC predicts that England’s BNG scheme could generate between £100m and £300m in biodiversity funding annually, covering roughly 6,300 hectares of land.
But it warned that funding for net additions to biodiversity is set to remain “relatively insignificant” – at just £10m to £30m a year after transaction costs are accounted for.
“It is critical that the costs of setting up the scheme do not outweigh the potential benefits and additional revenues generated through it,” the paper warns.
There are a number of ways policymakers could crank up funding available for biodiversity, the paper notes. This could include ratcheting up the level of ambition for net gains over time from 10 per cent in 2023 to 30 per cent by 2030; extending the BNG requirement to Nationally Significant Infrastructure Projects, such as airports, power plants and road projects; adding marine habitats to the scope of mandatory net gain; and boosting the visibility and transparency of the market so it attracts more voluntary contributions.
The concept of biodiversity net gain tends to divide environmental campaigners, with some opposed to it on the grounds it could become a ‘developers charter’ and others thinking the approach could mobilise much needed investment in biodiversity protection. But there does appear to be a broad consensus that as things stand the government’s proposals, like many aspects of the Environment Bill, do not contain sufficient safeguards to ensure the ambitious policy delivers on its green goals.
