3 Biodiversity offsetting
The offsetting
metric
23. The Environmental Statement contains a
detailed metric to "provide a calculation showing what the
project has achieved in working towards the goal of seeking no
net loss in biodiversity".[50]
The metric is based on, but differs from, the methodology defined
by Defra in its Biodiversity Offsetting Green Paper. The
HS2 Environmental Statement describes this as the "best
available basis" to robustly assess biodiversity gains and
losses.[51] It states
that the Defra metric has been adjusted for use on HS2 "to
address feedback that has arisen from use of the methodology within
the [Defra] pilot areas, and to ensure that it is suitable for
use in support of a landscape-scale project".[52]
24. The Woodland Trust considered it "completely
inappropriate to depart from Defra's position, and we are concerned
that this will not take account of the advice embedded within
Defra's pilots provided by Natural England". They told us
that "For HS2 to come up with a metric in advance of all
the detailed consultation ... is a little premature".[53]
Our Defra witness acknowledged that "the two [metrics] are
not perfectly aligned", but that HS2 had "taken the
essential parts" of the Defra scheme.[54]
The Department of Transport told us that the proposed metric had
been developed in consultation with Defra and Natural England,[55]
and Natural England told us that "we have certainly been
sighted on the changes to metrics".[56]
25. The Biodiversity Offsetting Green Paper
was clear that Defra's proposed metric was intended to be suitable
for any project, stating that "any offsetting system in England
would be underpinned by a standard metric".[57]
However, Defra's own guidance for developers using biodiversity
offsetting makes it clear that offsetting is designed for dealing
with low level biodiversity loss, not in relation to protected
sites or species.[58]
Sara Eppel of Defra told us that the metric had needed to be amended
for use on HS2 because of "the size of HS2".[59]
Dave Buttery of the Department of Transport told us
What we are trying to do is sensibly build on
what Defra already has to make sure that we are getting the full
ambit of a project, a very long, linear project where you have
much more scope for things like [habitat] connectivity than you
do if you are dealing with a small individual project.[60]
26. We recently received the Government's Response[61]
to our report on Defra's proposal for Biodiversity Offsetting,
which accepted our main recommendation not to finalise any offsetting
scheme until the pilots had been completed and evaluated.[62]
Defra's Sara Eppel acknowledged in evidence to this inquiry that
their metric might be further developed, "depending on what
comes out of the pilots."[63]
She could not, however, speculate whether the HS2 metric might
also be revised to take account of the results of Defra's pilots.[64]
27. The HS2 metric assesses the biodiversity value
of 'habitat parcels' affected by the proposed route using three
factors'distinctiveness', 'condition' and 'the position
in the ecological network'. An area of affected land would be
rated under each of these factors, with the results multiplied
together to create a 'biodiversity units' score. Replacement (offsetting)
habitats are also scored under these three factors, but with additional
factors applied to take account of the time taken for new habitats
to become established and for the difficulty or risk involved
in providing the offset (Figure 1).
28. A Technical Note in the Environmental
Statement sets out a detailed description of the HS2 metric,
highlighting particular changes from the Defra version. These
adjustments (shown in Figure 1 below) included[65]:
i) adding an additional 'very high' weighting,
under habitat distinctiveness (box A in Figure 1), for existing
habitats to take account of those "habitats of principal
importance
which cannot be adequately re-created if lost";
ii) ensuring that all existing habitats rated
as 'low' 'distinctiveness' automatically score 'poor' condition
(box B in Figure 1), recognising that "condition has negligible
effect on the overall value of those habitats which are intrinsically
of low distinctiveness"; and
iii) incorporating additional weightings, for
both lost and gained habitats, to reflect links to ecological
networks (box C in Figure 1) and recognising "the landscape-scale
of the project and its impacts".Figure
1: Offsetting metrics for habitats lost (left-hand side) and habitats
gained (right-hand side)
Source: Environmental Audit Committee from Volume
V of Ecology Technical Note[66]
29. The detailed descriptions of how the metric will
operate also include important stipulations for distinctiveness
and condition:
a) Unavoidable losses of 'very high' distinctiveness
habitats will be compensated through the provision of larger areas
of 'high' distinctiveness habitat.[67]
For 'high' distinctiveness habitats, the offset will usually be
like for like, i.e. aiming to create or restore the same type
of habitat.[68] For 'medium'
distinctiveness habitats, the offset will largely be made up of
habitat from the same distinctiveness band or higher; that is
habitat from the 'medium' or 'high' distinctiveness band). 'Low'
distinctiveness habitats will be 'traded up', and be largely made
up of habitat from the medium or high distinctiveness band[69]
(box A in Figure 1).
b) The target condition that can be predicted
for the creation of high distinctiveness habitats is a
maximum of 'moderate'.[70]
However, it also states "where habitat restoration or
enhancement is proposed then a habitat condition of 'high'
can be targeted for habitats of 'high', 'moderate' or 'low' distinctiveness".[71]
The assumption that "all habitats that are to be created
for the primary purpose of ecological mitigation will aim to achieve
the maximum target condition available (i.e. a score of 3 for
habitats of moderate distinctiveness and 2 for habitats of high
distinctiveness)." Replacement habitats will therefore not
be provided if they would score as being in 'poor' condition[72]
(box B in Figure 1).
30. In our report on biodiversity offsetting, we
recommended:
If biodiversity offsetting is introduced, its
metric for calculating environmental losses and gains must reflect
the full complexity of habitats, including particular species,
local habitat significance, ecosystem services provided and 'ecosystem
network' connectivity.[73]
The proposed HS2 metric includes a multiplier for
assessing the connectivity of the ecosystem (box C in Figure 1),
but does not explicitly include any consideration of species within
the metric. RSPB believed that "the [HS2] Technical Note
should acknowledge the known weaknesses in the Defra offsetting
metrics in dealing with impacts on species in general and specialist
species in particular", and concluded that the metric therefore
"under-estimated the impacts on species of conservation concern".[74]
31. Rob Cooke of Natural England thought that it
was difficult to judge whether the weightings attached to the
different factors were correct.[75]
The CLA were concerned that the HS2 metric might result in a larger
area of land being required for compensation than under the Defra
scheme.[76] Environment
Bank, on the other hand, believed that the metric would lead to
"deliberate or otherwise under-valuation of existing habitats"
and "...over-valuation of proposed habitat mitigation".[77]
They criticised the assumptions made in the HS2 metric where habitats
had not been surveyed, which suggested that only habitats managed
for conservation purposes could be scored as in 'good' condition:
Classifying all remaining [unsurveyed existing]
habitat as 'moderate' 'condition' is not following the precautionary
principle, which would suggest a 'good' 'condition' score for
habitats [instead].[78]
Environment Bank also questioned the implicit assumption
in the proposed HS2 metric about the potential achievable 'condition'
of new (offset) habitats, which did not appear to follow the precautionary
principle:
Should grassland be recreated on previous arable
land, it is doubtful without a robust management plan that it
will attain high distinctiveness or good condition. If a woodland
or pond is created for landscape/drainage purposes there is no
information to support its good management and again it may not
attain high distinctiveness or good condition. A precautionary
principle would be not to allocate any [offset] habitats as good
condition at this early planning stage.[79]
32. The Environmental Statement identifies
a need for the "beneficial effect" of offsetting to
compensate for
the "adverse effect" on "habitat
types which are considered irreplaceable (e.g. ancient woodland)...
In this instance the 'beneficial' effect will be included to demonstrate
the positive value of the proposed compensation, while acknowledging
that the new habitat cannot replace ancient woodland."[80]
But a number of our witnesses believed that ancient
woodland should not be included in the offsetting metric at all.
The Ecology Technical Group recommended that such "irreplaceable
habitats
are considered separately",[81]
as did the Woodland Trust[82]
and Buckinghamshire Council.[83]
RSPB believed that
no matter what multiplier is applied in the case
of irreplaceable habitats, new habitat creation cannot overcome
our basic inability to compensate for the loss of such habitats.
Such net losses should be clearly acknowledged, not concealed
by false accounting.[84]
33. In our report on Biodiversity Offsetting,
we recommended that "for developments not of national significance,
offsetting would not be appropriate where environmental loss is
irreplaceable within a reasonable timeframe, such as with ancient
woodlands."[85]
We recognised that nationally important infrastructure projects,
such as HS2, might be unable to avoid some damage to ancient woodlands
and raise a question about how best to compensate for that. The
report was clear that compensation should only be a last resort,
and there needed to be sufficient safeguards in place to ensure
that harm is minimised and that compensation is adequate.
34. Natural England told us that:
biodiversity offsetting should be given
further consideration in the context of providing compensation
for unavoidable loss of ancient woodland. The compensation ratio
should reflect the distinctiveness of this habitat type and recognise
that for ancient woodland this is an irreplaceable habitat.[86]
Environment Bank questioned whether a 'distinctiveness'
weighting of eight (box A in Figure 1) "adequately reflect[ed]
their biodiversity value".[87]
Robert Goodwill MP told us that such a weighting would mean that
eight times the area of ancient woodland lost would have to be
provided through offsetting land.[88]
In fact the distinctiveness score of eight for 'very high' distinctiveness
habitats would be only double the score (four) for 'medium' distinctiveness
habitats. The area of offsetting required would depend on other
factors (condition or ecological network links), as well as the
difficulty of restoration and how long it would take (boxes D
and E in Figure 1).
35. The HS2 biodiversity offsetting metric includes
some features which provide additional protections to those envisaged
in last year's Defra Offsetting Green Paper, but unlike the Defra
approach it also allows offsetting to be assessed and scored for
irreplaceable habitats such as ancient woodlands. The HS2 metric
for new habitats rightfully aims to create habitats that would
be regarded as achieving 'good' condition. However, given
the uncertainties surrounding the effectiveness of offsetting
on HS2, along with the scale of the land to be taken by the project,
the metric should be adjusted wherever possible to encompass the
precautionary principle. It should for example only allow offset
land to be categorised as 'good' condition if there is a fully
costed long-term plan for the site's management and independent
monitoring. As Defra are still finalising the standard metric
for offsetting, HS2 should look to incorporate any additional
learning from these pilots into the metric for this project, to
ensure it is robust and reflects best available information.
36. If the offsetting metric is used to determine
compensation for ancient woodlands on the HS2 route, these habitats
should receive the maximum score possible on all criteria (distinctiveness,
condition and position within ecological networks) to recognise
their irreplaceability and to maximise the extent of the offsetting
provided. But ancient woodlands should be treated separately from
the overall biodiversity 'no net loss' calculation.
The time delay factor
37. The HS2 metric makes assumptions about how long
different types of offsetting habitats would need to reach 'target
condition' (box E in Figure 1), including for example five years
for ponds, 10 years for landscaping woodlands and 32 years for
mature heathland.[89]
The March 2014 second progress report by the Natural Capital Committee,
The State of Natural Capital: restoring our Natural Assets,
concluded that:
Restoration is almost never complete; even after
100 years restored habitats can still be distinguished from their
natural un-impacted counterparts. However, there may be significant
gains in terms of the benefits provided (when compared to the
degraded state).[90]
Accordingly, the Environment Bank believed that some
of the estimates of the time taken for replacement habitats to
reach the condition anticipated in the HS2 offsetting metric were
too low:
Woodland (for ecological purposes) is recorded
as 32 years+ which is probably appropriate, but 'landscape' woodland
is said to reach target condition in only 10 years. At this age,
however, such woodland will not be ecologically functional.
Full habitat establishment of grassland is claimed within 5-10
years; we suggest it is unlikely that 5 years is sufficient and
the use of this figure does not adhere to the precautionary principle.[91]
38. Natural England pointed out that:
the length of time a habitat will take to establish
is dependent both on the habitat type and also where it is put,
and then how it is managed. The offset metrics are intended to
enable a rapid assessment of that by a ratio, which I would imagine
is something of an average.[92]
The Woodland Trust also pointed out that if
there is an interval between one habitat being removed and another
reaching a comparable stage of maturity, the damage to the species
dependent on that habitat may be long-lasting and potentially
terminal.[93] The Environment
Bank believed that "modifications to temporal risk in the
metric should be deployed to reflect this".[94]
39. The Environmental Statement proposes applying
the standard Green Book discount rate (3.5% pa) to adjust for
the time it will take to restore habitats. A recent report from
the Commission on Wellbeing and Policy noted, however, (though
in the context of 'social capital' rather than 'natural capital')
that such an 'economic capital' discount rate might not be appropriate,
as this value reflects both general uncertainty about the future
and also an element based on people's expectations of their future
income.[95] However,
for the natural environment there may be significant environmental
harm to wildlife and ecosystems if there is any delay in new biodiversity
offset sites being established to provide compensation for land
taken by the HS2 route.
40. It is right that the HS2 offsetting metric
includes a discount factor for time, but the rate proposed does
not fully represent the extent of the environmental harm from
the potential delays. Some species may become endangered by the
hiatus. This is a difficult area to measure because the discount
factors usually applied in economic appraisal to recognise the
value of time are unlikely to capture the impact of delays for
the wildlife affected. The Government should commission research
on alternative discount factors for the HS2 offsetting metric,
to take into account the damage caused by any delays in compensatory
habitats reaching maturity.
Location of replacement habitats
41. The Government's plan for HS2 is to include all
necessary ecological mitigation and compensation measures within
the land identified in the Hybrid Bill. The Department of Transport
maintains that "this is superior to seeking arrangements
at medium and long distances from the proposed scheme."[96]
Others disagreed. The Chilterns Conservation Board told
us:
Much of the proposed offsetting for loss of woodland
is tree planting nearby. At best, this is a crudely presented
proposal ... There are many examples of proposed planting of productive
agricultural land; where the agreement of the landowner is required
and may not be forthcoming; which require long-term agreements
to avoid its subsequent removal; and where it is appropriate given
the existing landscape and ecological networks. At present the
impression given is that it is a numbers game.[97]
42. The CLA saw "no justification for where
environmental habitat has been [re]located".[98]
Henry Robinson from the CLA told us that he particularly opposed
land being used for biodiversity compensation where it would be
"compulsorily purchased off valuable agricultural land".[99]
The National Farmers' Union noted that 250 hectares of forestry
land might be permanently removed and offset by planting 650 hectares
of woodland, and believed that "it cannot be correct to be
planting an extra 400 hectares of woodland on top of the 250 hectares
lost on prime agricultural land".[100]
The NFU wanted any replanting to be only on farmland "already
out of production or of low inherent fertility".[101]
43. Environment Bank expressed concern about
the failure to contemplate off-site offsetting, rather than on-site
compensation, believing that 'no net biodiversity loss' (paragraph
9) would not be possible without the former, which it considered
to be "a serious flaw of the Environmental Statement".[102]
The Government's approach also takes no account of the emerging
work of the Natural Capital Committee which examined woodland
planting as a case study and emphasised that the value of the
ecosystem benefits derived from such planting would be significantly
influenced by their location, in particular by 'non-market values'
such as people's ability to take recreational enjoyment from those
woodlands.[103] The
Natural Capital Committee's analysis formed a foundation for its
recent recommendation for a 25 year plan to embed natural capital
considerations into Government policy-making. [104]
44. The offsetting metric takes no account of the
well-being aspects of the habitats and biodiversity lost and gained.
That means that on current plans such factors will not be taken
into account in deciding on the location of any offsetting. In
our report on Defra's Offsetting Green Paper, we emphasised
how important it is that offsetting sites are accessible to those
affected by a development.[105]
In our HS2 inquiry, Robert Goodwill MP highlighted "the natural
aspirations of the general public to enjoy some of this land"
but noted that there was a need for this to be balanced with reducing
the habitat disruption that might come from public access.[106]
45. There is a rationale for providing biodiversity
compensation along the HS2 route, to facilitate the relocation
of the wildlife affected and to provide some compensatory well-being
benefits to local people disrupted by the railway and its damage
to local landscapes. Nevertheless, the requirement for biodiversity
compensation to be provided directly alongside the HS2 route may
lead to missed opportunities for better offsetting measures. The
Government should re-examine the scope for such off-site biodiversity
compensation, taking on board the emerging results from the Natural
Capital Committee's work to strike an appropriate balance between
what is best for nature and for the people affected.
50 HS2 Ltd, Environmental Statement, Volume
5, Ecology Technical Note - Methodology for demonstrating no net
loss in biodiversity (November 2013), para 5.1.2 Back
51
ibid, para 1.5.1. Back
52
ibid, para 1.5.1. Back
53
Q32 Back
54
Q153 Back
55
Department for Transport (HS2 028), para 5.2 Back
56
Q84 Back
57
Defra, Biodiversity Offsetting in England Green Paper (September
2013), para 13 Back
58
Defra, Biodiversity Offsetting Pilots Guidance for Developers,
March 2012, paras 5; 23 Back
59
Q153 Back
60
Q156 Back
61
Environment Audit Committee, Ninth Special Report of Session 2013-14,
Biodiversity Offsetting: Government Response to the Committee's Sixth Report of Session 2013-14,
HC 1195, para 15 Back
62
Environmental Audit Committee, Sixth Report of Session 2013-2014,
Biodiversity Offsetting, HC 750, para 45. Back
63
Q153 Back
64
Q155 Back
65
HS2 Ltd, Environmental Statement, Volume 5, Ecology Technical Note
- Methodology for demonstrating no net loss in biodiversity (November
2013), para 1.5.2. Back
66
HS2 Ltd, Environmental Statement, Volume 5, Ecology Technical Note
- Methodology for demonstrating no net loss in biodiversity (November
2013) Back
67
ibid, para 4.2.3 Back
68
ibid, para 4.2.4 Back
69
ibid, para 4.2.5 Back
70
HS2 Ltd, Environmental Statement, Volume 5, Ecology Technical Note
- Methodology for demonstrating no net loss in biodiversity (November
2013), para 4.3.1 Back
71
ibid, para 4.3.2 Back
72
ibid, para 4.3.3 Back
73
Environmental Audit Committee, Sixth Report of Session 2013-2014,
Biodiversity Offsetting, HC 750, para 16 Back
74
RSPB (HS2 025), para 13 Back
75
Q84 Back
76
Q38 [Mr Robinson] Back
77
Environment Bank (HS2 023), para 5 Back
78
ibid, para 20 Back
79
Environment Bank (HS2 023), para 21 Back
80
HS2 Ltd, Environmental Statement, Volume 5, Ecology Technical Note
- Methodology for demonstrating no net loss in biodiversity (November
2013), para 6.1.2. Back
81
ibid, para 8.2 Back
82
Q38 Back
83
Buckinghamshire County Council (HS2 024), para 5.4.1 Back
84
RSPB (HS2 025), para 15 Back
85
Environmental Audit Committee, Sixth Report of Session 2013-2014,
Biodiversity Offsetting, HC 750, para 16 Back
86
Natural England (HS2 051), para 2.32 Back
87
Environment Bank (HS2 023), para 17 Back
88
Q162 Back
89
HS2 Ltd, Environmental Statement, Volume 5, Technical Appendices: Scope and methodology report addendum (CT-001-000/2):
3.5.0.15.2: Annex D Ecology Technical note - Methodology for demonstrating
no net loss in biodiversity: para 4.8.3, Table 9 Back
90
Natural Capital Committee , The state of natural capital: Restoring our natural assets
(March 2014), Box 2.3, p29 Back
91
Environment Bank (HS2 023), para 24 Back
92
Q88 Back
93
Woodland Trust (HS2 021), para 2.7 Back
94
Environment Bank (HS2 023), para 12 Back
95
Commission on Wellbeing and Policy, Legatum Institute, Wellbeing and Policy,
March 2014, p53 Back
96
Department for Transport (HS2 028), para 5.1 Back
97
Chilterns Conservation Board (HS2 047), para 27 Back
98
CLA (HS2 036) para 1 Back
99
Q38 Back
100
National Farmers' Union (HS2 032), para 5 Back
101
ibid, para 7 Back
102
Environment Bank (HS2 023), para 26 Back
103
Natural Capital Committee , The state of natural capital: Restoring our natural assets
(March 2014), pp12, 49-53 Back
104
ibid, para 7.3 Back
105
Environmental Audit Committee, Sixth Report of Session 2013-2014,
Biodiversity Offsetting, HC 750, para 25 Back
106
Q145 Back
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