The biodiversity net-gain requirement is among the most important conservation policy initiatives of the last two decades, argues Environment Bank chairman and founder Professor David Hill CBE
The Environment Bill will has finally been passed into law, thereby becoming the Environment Act.
Several years in the making, the Act will provide the legal basis for a range of substantial initiatives for restoring nature. It can’t come soon enough. We need immediate action – in the words of Sir David Attenborough at COP26: “This is our last chance”. His words apply equally to rebuilding biodiversity as they do to addressing climate change.
Fully functioning ecosystems, comprising the full complement of species, are of ultimate importance in providing resilience to our food supplies, nutrition, the quality of our landscapes, protection from flooding, crop pest control, air and water quality, pharmaceutical products and medicines, health and well-being. Once species become extinct, particularly those unknown to science, their contribution to ecosystem function is lost forever. Without biodiversity we humans would cease to exist. Biodiversity loss represents an impending existential threat to us.
Arguably the most significant conservation policy initiative of the last two decades, and a cornerstone of the impending Environment Act, is the mandatory requirement for all built and infrastructure development to deliver a minimum of 10 per cent uplift in biodiversity as a result of development projects.
I introduced the concept of biodiversity offsetting and gains from development in 2007 when I set up the Environment Bank. Having spent many years designing mitigation schemes for all types of developments I concluded that biodiversity was receiving a very poor deal. What was needed was a transparent and easy system for developers to do what they can within their development site boundary but to offset the residual impacts. Under the Act, planning authorities will have the responsibility for ensuring this biodiversity net gain (BNG) mandate is applied to all development.
But just as with COP26, the devil will be in the detail – moving from words to action. Under a voluntary BNG regime, developers have, for a number of years, been calculating the impacts of their development in biodiversity units using the standard government metric, which we believe works very well. Whilst some of the BNG may be delivered on-site, such areas by their very nature tend to be untidy and are very often lost over time. Large commercial warehousing, logistics developments, ports and linear infrastructure often have almost zero capacity to deliver BNG on-site. So there will be a demand for large off-site areas set up at scale to provide places of great biodiversity value across the wider countryside. At the Environment Bank we are setting up habitat banks in every planning authority area in order to satisfy this demand by raising ‘conservation credits’ that are sold to developers to enable them to be compliant with the new law.
Developers will be required to submit a biodiversity gain plan in order to secure planning permission. The plan will detail where the BNG will be delivered – a combination of on-site and off-site. But there will need to be a level playing field established. For example, where a developer places the BNG on-site, they will have to register it with government and would need to secure 30-years of funding in an independent account, to include the costs of monitoring, reporting, restorative measures and ongoing management, just as is required for off-site areas provided by third parties. They can’t simply hand over the liabilities and responsibility to a management company; housing residents prefer tidy sites and the legacy of biodiversity retained within housing schemes is poor. Without such assurance, the biodiversity gain plan would be flawed.
There are other issues that will need to be addressed if the extent of private investment that would be available if there is a level playing field, is to be secured into the natural environment – and which is needed in order to deliver the ambitions of the 500,000ha Nature Recovery Network. For example, where planning authorities might think they can charge the developer and use these funds on their own sites, there are two key problems. First, any such arrangement would have to be done through the planning authority setting up a commercial company in order to trade, otherwise they would fall foul of anti-competitive and state aid rules. Second, there is substantial reputational risk on planning authorities receiving money from those whom they regulate. This would be poor governance and will likely result in legal challenge and judicial review where objectors to a planning application or even permission, can take the local authority to court. It is critical that planning authorities have the backing of their legal team before they embark on such action.
Natural England may also constrain a market developing in offsite areas if they sell statutory credits without having a robust method of ensuring that developers have exhausted all opportunities for local delivery through a local market in offset sites. To date, no such robust methodology has been proposed.
These issues can be dealt with through the consultation on the secondary legislation that will be brought forward in the next few weeks. I’m confident that the very able teams at Defra and the Department for Levelling Up, Housing and Communities will ensure that the opportunity afforded by biodiversity net gain, a landmark initiative, makes its full contribution to restoring biodiversity at scale across the country. Engaging private investment into private landholdings is key. It will generate jobs in challenged rural communities, provide diversification of income streams to farmers and landholders, and, most importantly build a richer countryside for the wildlife we cherish.
Professor David Hill CBE is chairman and founder of The Environment Bank Ltd.