Biodiversity Offsetting - Environmental Audit Committee Contents

1  Background

1.  Biodiversity offsetting allows damage to the environment and ecosystems arising from a development to be compensated for by providing biodiversity resources elsewhere.[1] It could allow development which local environmental damage might otherwise rule out. On the other hand, as the Lawton review, Making Space for Nature, concluded in 2010, there are risks that biodiversity offsetting could undermine 'ecological networks' if they lead to any reduction in the levels of protection afforded to wildlife sites and habitats, and that any system of biodiversity offsetting needs to be "underpinned by a clear set of principles".[2]

2.  The Government's subsequent Natural Environment White Paper, The Natural Choice: securing the value of nature, contemplated "managed locally" offsetting being tested in pilot areas.[3] In March 2013, the Ecosystems Markets Task Force concluded that:

    There are weaknesses and inefficiencies in the current system which slow down necessary development, yet still lead to deterioration and fragmentation of nature. We need a system in which unavoidable net impacts on biodiversity of new development are more than compensated by restored and created habitats elsewhere through an efficient market.[4]

In April 2013, the Natural Capital Committee's first annual report, The State of Natural Capital, recommended that "offsetting and other forms of compensation are explored after a clear set of principles and a policy framework have been developed". In his evidence to our separate inquiry into Well-being, Dieter Helm, chair of the Natural Capital Committee, told us "Yes, you should pay for damage you caused, but offsetting is special. Can you find an environmental asset that is at least as good as what you have had before?"[5] Arguably, offsetting is an admission of failure in that it should only arise after alternative development sites or means of mitigating the environmental loss from development have been considered.

3.  Against that background, the Government set out proposals for biodiversity offsetting in a Green Paper consultation, Biodiversity Offsetting in England, published in September 2013, including a prospective means of calculating biodiversity gains and losses for such a system.[6] At the same time, Defra, Natural England and local councils continued with six offsetting pilots begun in 2012.

4.  This short inquiry into the Government's proposals takes forward our previous scrutiny of how sustainable development is accommodated in the National Planning Policy Framework[7] and our ongoing inquiry into Well-being.[8] We heard from a range of witnesses on 23 October, including developers and environmental groups who had been involved in the pilots, as well as the Secretary of State for Food, Environment and Rural Affairs.

5.  As we discuss below, we consider it too soon to reach a decision on offsetting while the pilots have yet to be completed and independently evaluated (Part 4). Because the Government is currently consulting on its proposals, however, we are publishing our conclusions now on the detail of those proposals (Parts 2 and 3), at the same time as the Government considers the inputs to its consultation exercise.

[1] Biodiversity offsetting, Post Note 369, Parliamentary Office of Science and Technology, January 2011 Back

[2] Defra, Making Space for Nature (September 2010) Back

[3] Defra, Natural Environment White Paper: The Natural Choice (December 2012) Back

[4] Ecosystems Markets Task Force, Realising nature’s value: The Final Report of the Ecosystem Markets Task Force (March 2013) Back

[5] Oral evidence taken on 9 May 2013, HC (2013–14) 59, Q48 Back

[6] Defra, Biodiversity Offsetting in England Green Paper (September 2013) Back

[7] Oral and written evidence on Sustainable Development in the National Planning Policy Framework, HC (2010–12) 1480 Back

[8] Well-being inquiry (We took oral evidence from Dieter Helm in that inquiry – oral evidence taken on 9 May 2013, HC (2013–14) 59). Back

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Prepared 12 November 2013