Environment, Food and Rural Affairs CommitteeWritten evidence submitted by Professor Colin Reid

The following evidence is submitted on a wholly personal basis and does not represent the views of any institution or organisation.

1. The White Paper sets out admirable goals but is short of concrete proposals which can guarantee their achievement. An approach based largely on voluntary actions and partnerships can work well, especially if there is a supportive background in related policy areas (eg planning and agriculture), and enthusiasm on the part of all concerned with the capacity to rethink their priorities and develop new working relationships. Unfortunately there must be doubt over whether such a background will exist over the next few years. In particular, the economic position means that all of the public sector bodies involved are likely to be hard-pressed in coping with their established core functions rather than having the scope to devote energies and resources to new initiatives. Meanwhile the emphasis on economic development throughout recent statements on planning policy and the absence of any clear policy on sustainable development, and especially of any priority for ecologically sustainable development, also suggest that concern for nature is not going to be uppermost throughout the planning system.

2. I wish to comment particularly on two points in the paper, the potential to develop biodiversity offsetting (paras.2.38-2.42) and the role of the economic value of ecosystem services (chap.3), and on some generic questions these raise.

Biodiversity Offsetting

3. If use is to be made of offsetting schemes, then there are a lot of questions over design and operation that have to be addressed, as shown by experience in the USA, Australia and the elements of EU biodiversity law where compensatory measures are required. What constitutes an acceptable offset? What forms of action can be regarded as sufficient to balance the definite harm being done today to a site that is being developed? Is guaranteed protection of a currently valuable site enough, will financial commitments be required, is creation of new habitats appropriate and in the face of climate change, is there a role for the establishment of new wildlife corridors and refuges to give wildlife the space to adapt to changing conditions?

4. There are questions over how one measures equivalence, not least identifying a solid baseline against which any action can be measured. Whereas in relation to their impact on global climate change, an increase in greenhouse gas emissions in one place can be directly offset by a reduction at the same time in another place, replacement habitat takes a long time to mature and may never achieve the same richness as pristine areas. Indeed some habitats may be truly irreplaceable. Such issues are particularly challenging in the British context of a crowded island where virtually all habitat has been significantly affected by human activity over many centuries. There is a limited reserve stock of habitat available for promotion to high conservation status.

5. Forms of offsetting also vary. The scheme could require more or less direct equivalence in type between the harm done and the beneficial measures taken, requiring like-for-like replacement, meaning that damage to a wetland would require the protection or creation of a similar wetland so that the same specific elements of biodiversity benefit. Alternatively, the scheme could allow for damage to one sort of habitat to be balanced by support for a quite different but equally (or more) valuable type of habitat. The greater the flexibility allowed, the greater may be the problems of determining whether a particular project is meeting the requirement of ensuring no net loss to, or a net gain for, biodiversity.

6. The beneficial work undertaken (directly by the developers or attributed to them as a result of their being allowed to buy the credit for work done by others) may be set off directly against the damage being caused by a particular operation, with each project being considered in isolation, or it may be possible to take a broader view. In particular, the idea of “habitat (or biodiversity) banking” could be used, with providers creating a stock of actions with beneficial biodiversity outcomes, the credit for which developers can purchase to offset the debit from the environmental damage of their projects. By introducing a stronger market-based element, this approach offers more flexibility to developers and encourages those who have land of biodiversity value to view its maintenance and enhancement for this purpose as an asset which can be used to gain income from those in search of biodiversity credits to set off against their damaging activities elsewhere.

Economic Value of Ecosystem Services

7. Taking account of the economic value of ecosystem services and “natural capital” is desirable. At its simplest, ensuring that the value of services is reflected when decisions that affect the state of undeveloped land are being taken, so that the economic gain of development is not viewed in isolation from the economic loss if ecosystem services are no longer provided. Thus, for example, any environmental impact assessment at project or strategic level might attempt not merely to identify any adverse environmental consequences but also to put a value on any ecosystem services lost. Simply by adding a further element on the “environmental” side of the scales, and one with a financial label attached, the decision-making process would undoubtedly be affected.

8. Linking the costs and benefits more directly is more challenging. One limited possibility is to restrict this approach to new activities, applying a form of the “polluter pays principle” to recover sums from developers whose activities diminish the ecosystem services provided, for example by building on a flood plain and thus reducing its capacity to fulfil that function. Such a charge would operate like a version of the Community Infrastructure Levy. To implement this idea in relation to compensating for the diminution of ecosystem services, one might consider extending the scope of the activities triggering the levy beyond those requiring planning permission (for example including agricultural changes that currently fall outwith the planning system), while the rules on how the levy can be applied would have to be phrased to ensure that the proceeds were used to maintain or enhance the capacity to provide such services from other land.

9. A more ambitious exercise is to endeavour to require those who currently benefit from ecosystems services to make a financial contribution to those whose land use and management activities are providing and maintaining the services and who bear a cost in doing so, whether the expense of active management or simply by foregoing the profit that might be made by putting the land to alternative use. Recovering this contribution could represent a huge source of income for any land being maintained in its natural state, making this a much more attractive form of land use and diminishing the economic, and at times social, pressure to convert the land to more “productive” use.

10. There are several different approaches to capturing some contribution, from the straightforward, but unsubtle, approach of using the national revenue system to redistribute wealth to finding ways to identify the individual beneficiaries of services and the individual providers and require the former to pay a proportionate fee to the latter. This would be fiendishly complex, but some relationships might be straightforward enough for this to happen. For example, if upstream landowners maintain land in a way that absorbs potential floodwater, offering protection to those otherwise at risk downstream, then it might be possible through some intermediary (local authority, insurance company) to collect a contribution towards the service being provided

General Issues

11. Several of the proposals in the Paper could be (crudely) characterised as promoting a privatisation of biodiversity, with increased reliance not on regulatory controls imposed by official conservation bodies but on the cumulative effect of actions by a wide range of private sector actors with reduced public sector intervention. This raises a number of issues.

12. Firstly, there is a need to consider the coherence of the approach. Biodiversity conservation is distinctly different from many elements of environmental law because of the nature of what is to be conserved. Although for emissions controls there are often very localised impacts to be considered, in many cases what counts is the overall quality of a fairly large unit, such as a groundwater reservoir, river basin or the global atmosphere. This enables trade-offs to be accommodated within overall limits set at a broad level, allowing for less co-ordination at the detailed level. The same is not true for biodiversity. Not only must each species and habitat be considered individually, as opposed to the way in which greenhouse gases can be grouped together as the focus of control, but the measures needed are site specific and can only be effective if a whole network of sites is similarly protected. The most wonderful measures conserving a forest are of no benefit to migratory wading birds, and protecting the birds’ winter feeding grounds is of no benefit if their summer breeding habitat is destroyed or the places where they stop and feed on their migration routes are no longer able to support them. Moreover, if we are to help species cope with the challenge of rapid climate change, conservation efforts must be directed not just as those areas of value today but at those that will provide a home for species as their current habitat ceases to be suitable.

13. Conservation effort therefore cannot work as a collection of distinct and essentially fungible units, but must proceed in a coherent and co-ordinated manner. Structures will have to be found that enable a sufficient element of coordination to be present and this points, perhaps, to the new mechanisms being seen as additions to rather than replacements for the current regulatory approach.

14. Successful conservation of biodiversity requires the support not just of measures specifically directed at this goal but of many others that influence the way in which human activity affects the natural environment. The law and policy on land use, rural development, water abstraction and pollution and many other topics will affect what happens to the habitat on which biodiversity depends. As a simple example, the attractiveness of entering an offsetting scheme may be greatly affected by details of the tax regime—how are any payments to the landowner categorised and will the value of the land be affected for tax purposes? Similarly there are issues over how the rules on leases and agricultural holdings and subsidies will treat land set aside as offsets, and whether dedicating land to conservation purposes will be compatible with the obligations on trustees and company directors to use land they hold for the benefit of beneficiaries and share-holders—benefit traditionally conceived of primarily in financial terms.

15. A conservation policy based more strongly on “privatised” techniques might lack transparency. At present, the central role of the statutory conservation bodies means that although direct public participation may be limited, at least it is possible to find out what is being done. If more conservation activity transfers to the private sector through offsets or valuing ecosystem services, this concentration on a single focus, governed by statutory reporting rules, and if necessary the obligations on public access to environmental information, will be weakened unless measures are put in place to ensure publicity for the steps being taken.

16. Accountability is also affected. The conservation bodies can be criticised at present for the limited extent to which they are accountable for their decisions, but they must provide annual reports to Ministers and Parliament and can be given directions by Ministers who are in turn accountable to Parliament. Unless a regulator is to retain a strong grip to an extent that diminishes the flexibility that is a virtue of the scheme, who can be accountable for the overall impact of conservation offsets, or for the nature and quality of land devoted to offsetting schemes?

17. Linked to both of the above is the issue of participation. Biodiversity offsets open up to those on both the supply and demand sides of the equation the possibility to select for themselves the particular areas of land and sorts of habitats to be protected and recognition of ecosystem services may bring ideals of shared responsibility and stewardship into play, as opposed to conservation being a matter that is dealt with exclusively by the public authorities.

18. The present structures can be criticised for weakness in the participation of the public as stakeholders, but if new mechanisms are adopted, the role of the wider public might be even more marginalised. Although dependent on official approval in some form, biodiversity offset schemes rely on the private decisions and negotiations of those providing or acquiring the offsets. The opportunities for standard approaches to public participation are reduced to the extent that the conservation effort relies less on the direct action or regulatory decisions of a public authority and more on the aggregation of many individual decisions in the private sector and of individual transactions between private parties themselves or between private parties and the regulatory bodies.

19. Finally, there is the issue of what a move to a privatised approach means in conceptual terms. At present, biodiversity is commonly viewed as part of our common heritage, to be nurtured for the benefit of everyone. If it becomes the subject of a far-reaching offsetting regime or linked to the value of ecosystem services, there is a danger that this view is altered. Instead of being “a common concern of humankind”, it becomes a commercial commodity. This may have benefits, since by giving economic value to elements of biodiversity, real incentives are created for their conservation. It may be viewed as simply reflecting the reality of the economic basis of how society operates today and as such opening the door to the creation of means by which biodiversity can be embraced and effectively nurtured within that society rather than neglected, since it stands outside, beyond the reach of the modern world’s institutions and mechanisms.

20. On the other hand, such a change may be viewed as a fundamental, conceptual mismatch, a “category-mistake”, that wrongly elevates economic efficiency and selfish short-term individual preferences reflected in material terms over the communal, long-term, aesthetic and spiritual values which are essential to holistic human development and the achievement of a sustainable future. As Sagoff has noted in a US context, “To notice that the Endangered Species Act is not cost-beneficial is to recognize the obvious. That is the point of the Act, and of much of our environmental legislation.”

21. This tension has already been noted in relation to water resources, which are sometimes viewed as a heritage and sometimes as an economic good, with arguments presented that failing to recognise the value of such resources has been a factor in their wasteful and environmentally damaging use. There may be no simple answer, but the conceptual issue must be appreciated.


These comments draw heavily on my recently published article, “The Privatisation of Biodiversity? Possible New Approaches to Nature Conservation Law in the UK” (2011) 23 Journal of Environmental Law 203

21 September 2011

Prepared 16th July 2012