Biodiversity Offsetting - Environmental Audit Committee Contents

2  Measuring and assessing offsets

The metric

6.  In his introduction to the Green Paper, the Environment Secretary of State acknowledges that "the success, or failure, of offsetting will depend on the detail of the scheme we adopt",[9] and in particular the proposed "standard metric"[10] for measuring biodiversity gains and losses. Defra told us that the metric had been developed by Natural England and other experts "who have experience and who have looked at metrics internationally and drawn on those".[11]

7.  The Government's proposed metric would quantify the value of habitats—both those lost in the development and those gained through an offset—on the basis of three criteria:

·  Distinctiveness—assessed as low, medium or high—"reflecting the rarity of the habitat concerned and the degree to which it supports species rarely found in other habitats."

·  Quality—rated as poor, moderate or good—based in the pilots on Natural England's Higher Level Stewardship 'farm environment plan' manual.

·  Area, in hectares.

The distinctiveness and quality attributes of an area would be multiplied together to provide a weighting that would then be applied to the area involved to produce a number of biodiversity 'units'.[12] The proposed metric would also have three additional factors that would be used to adjust the final number of units. The Green Paper does not suggest how these would be calculated or what relative weighting these would be given. These factors are:

·  The risk associated with habitat restoration or creation, where not all activities would achieve the desired outcome.

·  The time needed to create the substitute habitat.

·  The location of the offset. Local authorities may have set out strategies on where to locate offsets to create maximum environmental gain, and a higher number of offset units would need to be provided if they were outside these designated areas.

8.  Policy Exchange told us that they supported the inclusion of the 'risk premiums' because "habitat creation, re-creation and translocation all have less chance of success than maintaining existing sites".[13] The Wildlife Trusts believed that a new site would not immediately support the same range of species as the old site because "there would be nowhere for them to colonise from", and that accordingly the new habitats should be created before they are required as compensation.[14] The Green Paper envisages the development of such 'habitat banking', where an offset provider would restore or recreate habitats in anticipation that they would be able to sell the offset units at a later date.[15]

9.  The Home Builders Federation welcomed the simplicity of the proposed metric. They thought that it should be kept as "simple and flexible as possible" in order not to limit the availability of offsets or "complicate discussions associated with planning applications". More complex metrics would also add to the costs of offset assessments.[16]

10.  Other witnesses had concerns, however, that the metric was overly simplistic. The Environment Bank, for example, believed that:

    Having a system that looks very simple is actually quite hard to operate. You end up making a lot of value judgments in there, because there are not enough categories to choose from. I think there is a middle ground of making it a bit more nuanced, which will make it easier to operate.[17]

The Wildlife Trusts told us:

    Ecology is a complicated thing. At the moment, the metric is too simplistic even to capture effectively some of the value of those lower value habitats, particularly because there is not a species component.[18]

    You also need to have more degrees of assessment of habitat quality or habitat condition. At the moment, there are essentially three categories. We feel that there needs to be a lot more because there is a lot more variation in the quality of habitat than that. That would give the developer greater guidance about what is needed, and it would also be helpful from the perspective of offset providers.[19]

The Woodland Trust believed that:

    In a practical realistic situation this could work, but it has got to have enough complexity in it to be able to value properly what you are looking at.[20]

11.  The Green Paper states that "it has been suggested the pilot metric can be applied to a site in as little as 20 minutes",[21] although no further detail is provided. The Wildlife Trusts believed that "if biodiversity offsetting becomes a permit to undertake a twenty minute survey, the biodiversity value of the site is unlikely to be assessed appropriately, with habitats and species missed, either due to the time of year or the lack of survey time and effort".[22]

12.  Some witnesses argued that the proposed metric failed to reflect adequately particular attributes of biodiversity. For example, it does not capture the losses or gains in terms of 'ecosystem networks'. The RSPB saw an opportunity for putting offsets "in strategic locations ... through a local nature partnership ... [to] improve ecological connectivity",[23] but the Woodland Trust and Wildlife Trust noted that the metric does not recognise when habitats are removed from or added to existing ecological networks.[24]

13.  The Woodland Trust emphasised that the metric focuses on habitats rather than species.[25] The Green Paper states that the Government intends to apply offsetting to protected species, citing the case of the great crested newt,[26] which would allow "strategic opportunities to improve species' conservation status" that are missed in the current case-by-case approach.[27] The Environment Bank made the same point. The current system is:

    based on the protection of individual animals rather than conservation of the species; it focuses efforts and resources on distinguishing exact impact, rather than on changing outcomes... huge amounts of time and resources are expended discussing, and then protecting, a few individuals of a relatively common species. The only beneficiaries of this system are the environmental consultants who service this industry, and the manufacturers of equipment (e.g. newt fencing) to do the same. The overall effect is counter-productive as developers are now increasingly reluctant to declare when protected species are discovered at a site.[28]

The Amphibian and Reptile Conservation Trust were positive about the intended approach although it noted that the application of offsetting would need to be controlled by a "strict regulatory regime and the metrics developed would need to take very specific account of the species concerned".[29]

14.  The metric, RSPB told us, should recognise the local importance of particular habitats: "There needs to be flexibility for local authorities to give relative value".[30] Friends of the Earth noted that the metric does not account for the value of natural capital and ecosystem services, such as pollination or flood mitigation.[31] The Aldersgate Group told us:

    Biodiversity offsets can conflict with local levels of other ecosystem services (such as recreation or regulating surface water drainage). Offsets can be designed to take these services into account, but doing so requires more complexity.[32]

15.  Witnesses were also concerned about the Government's proposal to allow offsetting to be applied to ancient woodland and Sites of Special Scientific Interest.[33] The chair of the Natural Capital Committee told us in May that:

    There are some areas where offsetting is not appropriate. You can't replace a bit of ancient woodland with like or better, because there isn't any ancient woodland you can invent without waiting 1,000 years for it to get to the state you want it to.[34]

RSPB believed that the metric would need to reflect that: "There are some habitats that are nationally important, such as ancient woodland and heathland, which should have a minimum score, and that should essentially be the highest score".[35]

16.  The biodiversity metric described in the Green Paper is overly simplistic. The speed with which the metric can be applied to sites (the Government estimates 20 minutes) should not be the priority. The priority should be ensuring rigorous protection of the environment. 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. For some sites, for example sites of special scientific interest, the weightings in the metric must fully reflect their value as national, as well as local, assets. 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.

Offsetting assessments

17.  The Green Paper sets out a range of options for who should be responsible for offsetting assessments: planning authorities could be responsible for ensuring the robustness of assessments, a national body could have responsibility for undertaking the assessments, and "suitably qualified individuals" could become accredited assessors.[36] In our separate inquiry on Well-being, Dieter Helm cautioned that:

    It is really rather important to be clear that those assessments are genuinely independent of the interests of the parties. The country is not awash with environmental expertise to do such things. They are costly to do, and, of course, the whole credibility of any offsetting regime will depend not only on whether those assessments are done correctly but on whether they are seen to be done correctly.[37]

In a similar vein, Policy Exchange told us it was imperative that assessors were experienced, qualified and independent professionals, and that "without this requirement, a biodiversity offset system will not be consistent, reputable and trusted by the public or green NGOs".[38]

18.  The Field Studies Council expressed concerns about a lack of such skills and expertise, including those needed "to ensure that any mitigation or offsetting is adequate and sustainable".[39] The Country Land and Business Association, on the other hand, favoured a light touch approach, suggesting that a developer be able to present a short statement to the planning authority setting out how it had complied with the 'mitigation hierarchy' (paragraph 27).[40] But the RSPB calculated that less than 30% of local authorities have any "ecological expertise, .... [and] if it is not addressed, it would be a bit of a disaster to introduce more offsetting".[41] The Wildlife Trusts told us

    A planning officer sitting in a local planning authority without in-house ecological expertise cannot work their way through a series of tables and come to a reasoned judgment on the ecological impact. At every level, you also have to have significant ecological expertise in the system.[42]

Buglife highlighted a different potential problem, of inadequate data on species and habitats needed to assess offsetting schemes.[43]

19.  In any offsetting system, the application of biodiversity assessments needs to command respect from a range of parties—developers, local authorities, environmental groups and local people. Transparency is essential if biodiversity offsetting is to earn public acceptance. If the Government introduces a biodiversity scheme, it must set out clear protocols for how the assessment should be done, require local planning authorities to audit and validate assessment (if they do not themselves carry them out), and publish details of how assessments are applied in each individual case. With competing demands on financially constrained local authorities, the Government must allow them to recover the full costs of their offsetting work from developers, or else make the required funds available from the Treasury.

9   Biodiversity Offsetting in England Green Paper, op cit, p1  Back

10   Biodiversity Offsetting in England Green Paper, op cit, p9 Back

11   Q56 Back

12   Biodiversity Offsetting in England Green Paper, op cit, p10 Back

13   Policy Exchange (BIO 010) para14 Back

14   Wildlife Trusts (BIO 020) para 4.3 Back

15   Biodiversity Offsetting in England Green Paper, op cit , para 54. See also Exploring potential Demand for and Supply of Habitat Banking in the EU and appropriate design elements for a Habitat Banking Scheme (European Commission, 2013). Back

16   Home Builder's Federation (BIO 021) para 14 Back

17   Q29 Back

18   Q25 Back

19   Q27 Back

20   Q7 Back

21   Biodiversity Offsetting in England Green Paper, op cit, para 25 Back

22   Wildlife Trusts (BIO 020) para 6 Back

23   Q7 Back

24   Qq10, 26 Back

25   Q10 Back

26   Biodiversity Offsetting in England Green Paper, op cit , para 35 Back

27   Biodiversity Offsetting in England Green Paper, op cit , para 32 Back

28   Environment Bank (BIO 012) paras 23 and 24 Back

29   Amphibian and Reptile Conservation Trust (BIO 005) para 1.7 Back

30   Q8 Back

31   Friends of the Earth (BIO 003) para 4. See also Economic Valuation of the Benefits of Ecosystem Services delivered by the UK Biodiversity Action Plan (Defra, 2011) Back

32   Aldersgate Group (BIO 023)  Back

33   Biodiversity Offsetting in England Green Paper, op cit , para 31 Back

34   Oral evidence taken on 9 May 2013, HC (2013-14) 59, Q48 Back

35   Q8 Back

36   Biodiversity Offsetting in England Green Paper, op cit, para 59 Back

37   Oral evidence taken on 9 May 2013, HC (2013-14) 59, Q 50 Back

38   Policy Exchange (BIO 010 ) para 8 Back

39   Field Studies Council (BIO 017) para 5 Back

40   Country Land and Business Association (BIO 019) response to Q6 Back

41   Q16 Back

42   Q25 Back

43   Buglife (BIO 018) para 1.4 Back

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Prepared 12 November 2013