Biodiversity Offsetting A general guide

Transcription

1 Biodiversity Offsetting A general guide

2 CONTENTS THE VALUE OF NATURE 3 WHY IS BIODIVERSITY OFFSETTING NEEDED? 3 WHAT IS BIODIVERSITY OFFSETTING? 4 Sustainable development 4 Offsetting principles 5 Offsetting metrics 8 WHERE MIGHT BIODIVERSITY OFFSETTING WORK? 9 Development sites 9 Receptor sites 11 HOW DOES BIODIVERSITY OFFSETTING ACTUALLY WORK 12 NEXT STEPS 14 For Local Planning Authorities and Developers 14 For landowners site registration

3 THE VALUE OF NATURE Our wealth as a nation and our individual well-being depend critically upon the environment. It provides us with the food, water and air that are essential for life and with the minerals and raw materials for our industry and consumption. Less obviously, it provides the processes that purify air and water and which sequester or break down wastes. It is also in our environment where we find recreation, health and solace, and in which our culture finds it roots and sense of place. With ever increasing pressures on these natural resources, partly from growing populations but still more from growing levels of individual consumption, it is essential that we learn to take account of the full value of ecosystem services in our decision making. Foreword to UK National Ecosystem Assessment, UNEP-WCMC WHY IS BIODIVERSITY OFFSETTING NEEDED? Our native wildlife (our biodiversity ) has been in serious decline for the last 50 years, especially following the intensification of agriculture since the 1970s. England has lost nearly 500 species of animal and plant over the past 200 years, and extinctions are occurring in every group birds, butterflies, bees and flowering plants. Even when species are avoiding extinction, there are widespread reductions in range and abundance of plants and animals. It is estimated that an average English county is losing two species of wild flower every year. Tales of abundance from our historical past (when corncrakes were so numerous in rural England that their calls kept farmworkers a w a k e at night), or within living memory (when squashed insects blackened the car windscreen after a summer evening drive), seem fanciful to today s naturalists. It is an unpalatable truth, therefore, that the four cornerstones of nature conservation in England our protected areas, agrienvironment funding, biodiversity action planning and delivery by professional conservationists, and planning controls on development are failing in their overall purpose. Protected areas are now, after 60 years of legislative evolution, well-protected and financed but are too small to make a difference even with much of the uplands and several huge estuaries designated, they cover only 7% of England. Agri-environment funding is thinly spread and despite the best efforts of farmers the management it delivers struggles to produce real benefits in an intensively farmed landscape. The national Biodiversity Action Plan system has sometimes developed, against the best intentions of committed conservationists, into a bureaucratic sink for conservation funding. Finally, proenvironmental planning obligations are difficult and time-consuming to enforce, Local Planning Authority resources are increasingly stretched and, in any case, 3 3

4 the planning system does not currently recognise (let alone compensate for) the wildlife value of much of our undesignated land. Is there a better way forward? Biodiversity offsetting is a new way of recognizing and quantifying the environmental impact of development, and turning that recognition into extra investment for habitat creation; it is a mechanism that has huge potential to improve the planning system, complement agri-environment schemes, and provide funding to create habitat that buffers and connects protected areas. Biodiversity offsetting was announced as a new policy in the 2011 Natural Environment White Paper, alongside Nature Improvement Areas and the National Planning Policy Framework. Financing habitat creation through offsetting is widely recognized as a powerful option for Nature Improvement Areas. Similarly, offsetting provides a transparent and accountable mechanism for delivering biodiversity gain through planning that is the key component of sustainable development required of Planning Authorities and developers by the National Planning Policy Framework. The national policy was given direct support by Defra and Natural England with the announcement of six national biodiversity offsetting pilots in England, which run from April 2012 to April Within these pilots Local Planning Authorities will trial offsetting, with support from Natural England. The Environment Bank is a lead partner with Essex County Council in the Essex offsetting pilot. Offsetting is, however, not restricted to the six national pilots there are several other complementary schemes running with Defra support and indeed any Local Planning Authority is free to try offsetting at any time, irrespective of their location. Biodiversity offsetting is also being actively discussed in Scotland and Wales, and is specifically referenced in the draft Scottish Biodiversity Strategy. WHAT IS BIODIVERSITY OFFSETTING? Sustainable development Biodiversity offsets are conservation activities designed to deliver biodiversity benefits in one place, to compensate for losses in another, in a measurable way (Fig 1). They transform the existing situation, where there is biodiversity loss, into one where there is overall biodiversity gain. For example, a housing development that partially destroys an area of grassland in one place could provide compensation by paying for the Figure 1. Through offsetting, development of arable land delivers not only a housing scheme but also habitat creation and long-term management at a separate site 4 4

5 creation of a new area of grassland somewhere else. Although compensation of this sort through the planning system has been happening for some time, biodiversity offsets are distinguished by the requirement for measurable and transparent outcomes: the losses resulting from the impact of the development and the gains achieved through an offset are measured in the same way. If a developer and Local Planning Authority recognize that a development, despite implementation of all the usual on-site mitigation measures, still has some net residual impact on the environment, then the developer may purchase conservation credits that offset this damage. The monies paid to buy the conservation credits are then used to fund long-term environmental management, which delivers biodiversity gain at receptor sites elsewhere. sites. The Environment Bank recognizes these concerns but offsetting is tried and tested around the world and there are extensive guidelines and principles to determine how it should best operate in England. Biodiversity offsetting has been used for 30 years across the world, particularly in the USA and, over the last decade, in Australia. In that time not all of the offsetting schemes have worked, which has meant there is a great deal of experience to learn from. Internationally, this experience has been collated, analysed and summarized by BBOP (Business & Biodiversity Offsetting Programme) a consortium of environmental NGOs, businesses and statutory authorities with experience of The aim of biodiversity offsetting is to produce real environmental gain; offsetting will allow development that delivers houses and jobs to proceed, whilst ensuring that the environmental impact of that development is recognized and compensated for with large-scale and long-term habitat creation; this will be truly sustainable development development that delivers both ecological and economic recovery for England. Offsetting principles Offsetting is a new idea and some believe it could be a licence to trash for developers who will be able to damage sensitive wildlife Fig 2 Business & Biodiversity Offsets Programme international guiding principles for offsetting. 5 5

6 Starting with the international principles, Defra consulted widely to formulate national principles specifically to accompany the launch in April 2012 of offsetting pilots in England. These may be summarized as: 1. Offsetting will not change existing levels of protection for biodiversity. 2. Offsetting must deliver real benefits for biodiversity by: expanding and restoring habitats, not just protecting them enhancing England s ecological network by creating more, bigger, better and joined areas for biodiversity providing additionality to existing conservation actions creating habitat in perpetuity following the mitigation hierarchy 3. Offsetting is to be managed at a local level as far as possible: within national priorities for managing England s biodiversity within a standard framework to provide consistency through local partnerships at a level that makes sense spatially with national support and guidance to build capacity. 4. The system should be as simple and straightforward as possible. 5. The process should be transparent, so that there is clarity in how the offset calculations are derived and how offset resources are being used. 6. Offsetting needs to be good value for money. biodiversity offsetting. BBOP has published 10 international guiding principles for offsetting; (Fig 2) if these are followed rigorously then biodiversity gain and hence truly sustainable development is assured. These principles expand on the mitigation hierarchy and what can and can t be offset, require no net loss (and preferably net gain) of biodiversity, additionality at offset sites, stakeholder participation and equity, long term outcomes, transparency and accountability in calculations and delivery, and best use of science and local knowledge. The Environment Bank is a member of the BBOP family and sits on the BBOP Advisory Committee. The Environment Bank is fully supportive of all of these offsetting principles, recognizing that three of them are key for guaranteeing success in the UK. Firstly, adherence to the mitigation hierarchy. Local Planning Authorities are accustomed to following the mitigation hierarchy when considering potential e n v i r o n m e n t a l d a m a g e f r o m development. Initially, any potential damage must be avoided if at all possible; if it cannot be avoided then it must be reduced ( mitigated ) as much as possible. If damage remains after avoidance and mitigation, then it must be compensated for as much as possible on-site (although this must be done with rigour, on-site compensation has, to date, often been expensive and ineffective). Only after avoidance, mitigation and on-site compensation, can any residual environmental damage be considered for compensation off -site through biodiversity offsetting. Figure 3 6 6

7 summarises pictorially the chronology of offsetting the aim is to use off-site environmental gain to tip the balance from overall net residual loss to overall net environmental gain, turning every development from one that might cause damage to one that will produce gain. The second key principle is to recognise that there are limits to what can be Fig 3 Mitigation Hierarchy biodiversity offsetting should not be used to circumvent that. Furthermore, there are some habitats where offsetting is not appropriate even if they are outside a protected area habitats that are impossible to re-create ancient woodland is a good example. It is worth noting that for the most highly protected habitats and sites Natura 2000 sites that are designated under the European nature directives off-site compensation is in fact already enshrined in legislation. offset and when; this is best characterized by the rule of thumb that offsetting does not apply in situations where there is damage to a protected wildlife site (such as SSSIs). The existing legislation to protect nationally important sites is there for good reason, and In these special cases, though, the process applies only for imperative reasons of over-riding public interest and must be specifically agreed by the Secretary of State. At present these matters are outside the remit of voluntary biodiversity offsetting. 7 7

8 The third key principle for England requires additionality of conservation outcome in other words, funds generated through offsetting must be used only to deliver land management that is extra to what already was, or was about to, happen. Generally, that will eliminate the spending of offsetting funds on designated protected areas, because these are already eligible for Government funding and are almost all under existing management plans. On the other hand, using biodiversity offsetting funding to buffer existing SSSIs, or increase the coherence of the SSSI network through the creation of habitat corridors or stepping stones, is likely to be a very costeffective opportunity to complement existing Government funding to isolated sites. In wider terms too offset funding should not be used to reward land managers for work that they are already paid for for instance, conservation outcomes under Higher Level Stewardship schemes via agri -environment funding. Again, however, there is nothing to stop land owners from receiving funding for schemes that deliver conservation outcomes that are additional to their agri-environment schemes, even if this applies to the same land. Strict observance of the three key principles mitigation hierarchy, limits to applicability and additionality of outcome will in practical terms ensure that offsetting delivers real environmental gain. Offsetting metrics A prerequisite to consistent offsetting is a reliable and transparent system of calculating the ecological value of both development impact and habitat creation using offset metrics. It is important t h a t offsets are c a l c u l a t e d consistently across the country, so that there is a level playing field for both buyers and sellers of conservation credits. But calculating the ecological value of a particular piece of land that is being lost is not straightforward, and nor is calculating the ecological value of a habitat creation scheme. In calculating both habitat loss and habitat creation The Environment Bank use the national metric that is recommended by Defra and which has been developed by Natural England in consultation with a range of experts this is set out fully in Technical paper: the metric for the biodiversity offsetting pilot in England (Defra March 2012). The metric is based on an assessment of habitat type and condition. Habitat types are classified into three bands of distinctiveness which are, broadly: priority habitats as defined in the NERC Act 2006 (high), semi-natural habitats (medium) and managed habitats, such as arable farmland (low). Offsetting can only happen for like-for-like or trading up scenarios, i.e. one can offset the loss of semi-natural habitats only with the creation of priority or other semi-natural habitats, not through creating some lesser quality habitat elsewhere. Trading up 8 8

9 options allow for the loss of poor quality habitat, such as farmland, to be compensated for with the creation of a potentially smaller area of high quality habitat this can be both cost-effective and highly beneficial to wildlife. The ecological value of the habitat lost to development is a function of its distinctiveness, its condition and the area lost scores are assigned to all three variables and multiplied together to arrive at the number of units lost. To offset this loss, the same or more units ( conservation credits ) must then be delivered through habitat creation or restoration at another site which is going to be managed for wildlife (the receptor site). The number of credits delivered by the receptor sites are also a function of the type, condition and area of the habitat being created or restored. But additionally, there are a further range of multipliers applied to the creation of habitat because there are a number of risks to take account of either spatial, temporal and delivery risks. Habitats that are reliably easy and quick to create, and which are created close to the site of loss and within a local offsetting strategy all have low risk and therefore the multipliers used approach (parity) 1:1. On the other hand, receptor sites for habitats that are tricky or take a long time to restore, or are a long way from the original impact and outside the offset strategy have higher risk in these cases multipliers apply which could, in extremis, scale up to 90 times or, more normally, up to 5 times the habitat that was lost. The Defra metrics provide an excellent and critical framework to ensure a level playing field within and between different offsetting schemes. But applying the metric requires experience and ecological field skills. Firstly, this ensures consistency of application it is essential that different (perhaps neighbouring) Planning Authorities are asking for the metric to be applied consistently (for instance, in assessing what is or isn t in medium condition). Secondly, it ensures that calculations are independent and unbiased in all circumstances it would be tricky, either for a developer to assess the number of conservation credits his development would require, or for a conservation charity to assess the number of conservation credits its site would deliver. International experience illustrates that independent and consistent assessment is best delivered by an independent and experienced broker. WHERE MIGHT BIODIVERSITY OFFSETTING WORK? Development sites The figure on the next page (figure 4) illustrates three scenarios where biodiversity offsetting is likely to introduce environmental gain to existing planning decisions. The first is to quantify the ecological value of land that has, to date, often been ignored especially intensively farmed arable land, intensively grazed grassland, and urban and suburban brownfield sites - land such as this has often been developed without any account being taken of ecological value but even the most intensively managed land has some ecological value. If such land is scored and assessed using offsetting metrics then the value can be offset by creating habitats elsewhere and net biodiversity gain will result. Furthermore, a history of high input fertilizer and pesticide use often means that on-site habitat creation 9 9

10 on the arable land is difficult, expensive and yields poor results there is much greater conservation gain to be had by directing those resources to existing seminatural habitats nearby. The second example is where the existing planning process has traditionally delivered some on-site mitigation via the obligations imposed under S106 agreements. Often, without the use of standardized metrics, extents of on-site loss have been underestimated, and extents of on-site gain have been overestimated. The net effect has been biodiversity loss. In many cases, in the absence of ecological estimates altogether, Planning Authorities have chosen to accept compensation for environmental damage in the form of wider benefits to the local community such as recreational space or transport infrastructure improvements. The third example is perhaps the greatest opportunity for both biodiversity gain, but requires careful calculation. This example describes the current situation where extensive on-site mitigation has been put in place, at significant expense to a cooperative developer, to meet the environmental requirements of the Planning Authority. Ponds have been built, grasslands recreated and woodland planted. The expense is great partly because the capital costs of habitat creation are high, but mainly because the land itself, with planning permission for development, is very expensive to give over to wildlife. The trouble then is threefold firstly, the land itself in its new context of part of a development site is simply not suitable for habitat restoration so even good management would struggle to maintain the wildlife interest; secondly, there is no long-term management anyway because it is expensive, and the original developer is often no longer present, and there is no long-term monitoring or compliance Figure 4 Offsetting scenarios 10 10

11 enforcement by the Local Planning Authorities; and thirdly no-one on site with responsibility for wildlife management has wildlife management as a skill or concern. In this circumstance large sums of money may be spent by developers on environmental improvement which is wasted the ponds fill up with rubbish, the grassland scrubs over and the trees are unmanaged. It is costly and there is no long-term benefit to the local community or to the environment. It would be far better for the local community and for the environment, and more cost-effective for developers (who would see an increase in developable area), if this funding were to be used, through biodiversity offsetting, to deliver long-term conservation management elsewhere, at a wildlife site that is set aside specifically for that purpose. Receptor sites Almost any land can be proposed as an offsetting receptor site there are no Government research on the planning system and offsetting Defra recently commissioned research to better understand the actual efficacy of planning policy in delivering the aims of the Government Planning Policy Statement on biodiversity (PPS9). The research (see CR042 at randd.defra.gov.uk) was conducted by independent planning experts and concluded, inter alia, that: current planning policies are failing to deliver the aims of PPS9 - for reasons that included weak biodiversity policies in Local Development Frameworks (LDFs), lack of Local Planning Authority (LPA) ecologists, biodiversity being seen as low priority by LPAs, conditions and obligations not enforced or monitored, and compensation that is infrequently required and, where it is, poorly implemented; biodiversity issues were recognised by LPAs as material considerations in less than 1% (90 of 10,235) of all types of planning application, although it was considered material in 29% of 570 'major' developments; there was poor understanding by LPAs of the differences between compensation and mitigation; and sometimes planning permission was refused in preference to negotiating complex compensation; in only 7 out of 23 major real life case-studies was no net loss achieved on site, so that biodiversity offsetting will be relevant in the majority of cases involving development and habitat loss; the Defra offsetting metric, including its use of 'multipliers', is valid and works; the additional cost of applying the metric [to developers] was lower than the additional cost of properly applying the principles of PPS9; application of the metric would have been likely to deliver more biodiversity value, in terms of more effective offsetting for development, than the compensation that would have been provided by properly applying the principles of PPS9; the biodiversity value of the offset land will be higher than the biodiversity value of the habitats lost and there is likely overall to be net benefit for biodiversity conservation

12 upper or lower barriers to the size of the site, nor to the ambition of the habitat restoration or creation project. Indeed, both modest sites delivering a few conservation credits relatively cheaply, and large ambitious sites delivering many conservation credits at significant expense, are likely to be in demand. For a site to be eligible to receive funding through biodiversity offsetting it must be able to demonstrate the intention for long -term land management that delivers reliable gain in biodiversity value. The steps to registering land as a receptor site are set out later in this guide. Land that is already receiving other conservation funding, of any sort, may not be eligible because offsetting must demonstrate additional direct benefits. The Environment Bank can answer any queries about whether your land would be eligible to receive offsetting funding. HOW DOES BIODIVERSITY OFFSETTING ACTUALLY WORK? Biodiversity offsetting in England is, at present, entirely voluntary, it only operates if Local Planning Authorities choose to offer offsetting as an option for developers, if developers choose to select it as a preferred mechanism, and if receptor sites can be found that deliver the right number of conservation credits of the right habitat type in the right place at the right time for the right price. Offsetting will only work, therefore, if there are clear advantages for all three stakeholders the planners, the developers and the receptor site land managers. The voluntary process is illustrated in figure 5. Authority (LPA), finds they need to compensate for residual impacts and is advised by the LPA that offsetting is an option; the developer then chooses to explore voluntary biodiversity offsetting and they are referred to The Environment Bank (independent credit brokers). The Local Planning Authority may choose to specify the need to offset the residual environmental impact as a condition on the planning permission. The Environment Bank calculates the number of conservation credits required to offset the residual impact of the development. This is normally done using the existing analysis presented in the Environmental Impact Assessment that accompanies the planning application, although it may occasionally require a site visit. Separately, local land managers (farmers, landowners, conservation charities, etc) interested in attracting funding for conservation land management, have been registering their sites on The Environment Bank s national register (the Environmental Markets Exchange). The Environment Bank calculates the number, and type, of credits that the proposed site management will deliver. There is no A developer, after working through the normal mitigation hierarchy of the planning process with their Local Planning 12 12

13 charge for these services, nor for registering the site onto the national registry. The approximate price of the credits i.e. the price of the long-term land management, is set by the land manager, not by The Environment Bank. Thus, there is no set price for a grassland credit rather, the price at any particular site reflects the cost of delivering biodiversity gain at that site. Back with the developer s e e k i n g p l a n n i n g p e r m i s s i o n, T h e Environment Bank then searches for a receptor site with matching credits of the right quantity, type and location. Sites may already be available on the national register or, if not, they are found using local contacts and regional and local habitat cre at ion/restorat ion priorities. Matching options will be provided to the developer with the estimated credit costs; the developer and LPA will agree on a receptor site to purchase credits from. If the developer and Local Planning Authority agree that a receptor site is suitable for offsetting, then at that stage the land manager, knowing that he has a likely buyer of his credits, will need to produce a relatively detailed long-term management plan that determines the exact Figure 5 Offsetting process costs and details the land management that he will put in place, now and in the future, to deliver the conservation credits. This will involve input from an ecologist and/or other relevant experts. Assuming the final number of credits and price is appropriate then the developer will purchase the credits from that site

14 The Environment Bank now instigates a set of legal agreements that assures the Local Planning Authority that long-term biodiversity gain will be delivered, assures the developer that he will receive conservation credits he can use to meet his planning condition in return for money, and assures the land manager that he will receive long-term funding in return for his management input. Using a Credit Offset Purchase Agreement and a Conservation Bank Agreement the Environment Bank brokers the credit purchase, formalising the obligations of the landowner, purchaser and the Environment Bank and detailing the number, type and price of credits being purchased. Once the full amount for the credit sale is received a letter of sale and Conservation Credit certificate is provided to the developer, to be presented to the relevant LPA. The LPA approves the offset and the development can proceed. The total sale amount, minus brokerage fees that cover the costs of the services, is held in a not-for-profit fund and progress payments are made annually to the landowner, as set out their Conservation Bank Agreement. At this time, implementation of the management plan, along with the associated monitoring and reporting requirements begin, so as to ensure the environmental gain will be achieved. NEXT STEPS For Local Planning Authorities and Developers The six Defra-sponsored national offsetting pilots will continue until April 2014, and will trial a variety of offsetting options, including with (as in Essex) or without use of The Environment Bank as an independent broker. Outside of these pilots, other Local Planning Authorities and developers in any part of the country may also choose to trial offsetting. The Environment Bank would be delighted to discuss offsetting, completely free of charge and at no obligation, with any Local Planning Authority or developer that would like to find out more. For landowners site registration Landowners interested in registering their property with The Environment Bank can request an expression of interest form (see contact details to follow) or visit to submit an online EOI. The type and number of conservation credits that may be created at a site will initially be estimated (and confirmed following a site visit only if the site is selected for the next stage). Registration of a site (and subsequent estimation of credit value) does not commit the landowner to any action in any way, nor does it affect the status of the land in any way

15 Environmental Markets Exchange - EXPRESSION OF INTEREST FORM Available for submission online at Contact details Landowner name Company name (if applicable) Do you own the freehold for this property? If not, do you have permission to enter into this scheme? Name of main contact for this registration (e.g. Land Manager/ or as above ) Contact address Contact phone number Contact Property details Property name (if applicable) Location (address of property) Size of property (specify ha/ac) Description (Please briefly describe the potential for creating or restoring natural areas for wildlife) If you already have an ecological assessment of the property/site, please attach or enclose it with your EOI. Demonstrating additionality (What will biodiversity offsetting funding achieve in terms of improvements/gain on top of any conservation actions already happening at the site?) What current land use exists on your property? (Delete YES or NO as appropriate) Are you, or have you been, involved in any environmental conservation schemes e.g. agri -environment? (If so, please list) Are you happy for us to list your property on the Environmental Markets Exchange? (Delete YES or NO below as appropriate) Agricultural land YES/NO Forestry and woodland YES/NO Grassland YES/NO Natural and semi-natural land YES/NO Water YES/NO Other - Please specify (if known): Yes (your contact details will remain hidden) No (we can still register your property without making it visible to purchasers) Optional - please attach any photos of your property that show where you are interested in land use change for nature conservation (please provide captions below). Photo 1 Caption: Photo 2 Caption: Photo 3 Caption: These details allow the Environment Bank to consider registration of your property on the Environmental Markets Exchange, but with no obligation from you to proceed further. If your property is suitable, more information may be needed to complete registration we will contact you if this is the case. 15

16 If you are interested in becoming involved in biodiversity offsetting please contact us: admin@environmentbank.com Phone: