In defence of offsets

In defence of offsets: The potential power and dangers of biodiversity net gain requirements.

Biodiversity net gain requirements have a vital role to play in restoring nature. Now that the requirement for 10% net gain has been officially confirmed, there are concerns that biodiversity offsetting could lead to the same problems we have seen with carbon offsets.

Tim Graham, Associate Director of RSK Wilding, explains that while there are still questions to be resolved, biodiversity net gain implementation will strongly encourage nature restoration at scale.

Under the Environment Act 2021, set to become law sometime in November 2023, all development schemes in England must deliver at least 10% biodiversity net gain, which must be maintained for a period of at least 30 years. At first glance, the heavy criticism currently being directed at carbon offsets and the voluntary carbon market looks like it will be applicable to the offsetting expected to take place in response to the new biodiversity net gain requirements. But the main criticisms of carbon offsets have been about the lack of transparency regarding assessing gain or additionality. Biodiversity net gain in England will be mandatory, and for the most part, has clear transparency in its implementation, meaning that it could be a powerful tool for nature restoration. Despite this, there are still questions that must be asked before the Act comes into full force.

In order to meet the requirements, developers will need to create habitat that enhances biodiversity through more than planting trees and digging ponds so that woodlands and wetlands are established. This can be done either on-site or at a dedicated off-site location.

Off-site habitat banks have a real opportunity to contribute to nature recovery and ‘bending the curve’ of biodiversity decline if placed in the right locations. Using a dedicated plot of land next to an ancient woodland, for example, or on a former wetland, can lead to the restoration of depleted but crucial habitat. Coupled to this is the fact that off-site banks have the potential to create a single continuous area of habitat restoration when we get the coordination right. If a developer builds 100 houses on a plot of land, then restores an equal-sized plot of land adjacent to an ancient woodland, it will have a greater impact than 100 smaller plots of biodiversity-enhanced land sprinkled within the development area. The large site next to the forest would enable the woodland to expand quickly, with the two areas blending together into the wider landscape.

Off-site habitat creation as a form of offsetting has the benefit of being clearly written into the current legislation, with transparency, counterfactual assessments and baselining built into the system. There will be a national register of sites that will require all information to be uploaded, monitored and verified for 30 years into the future.

Where things are less clear, and where problems look set to arise, is around on-site gain. While off-site habitat has to be nationally registered, the government’s preference is for habitat to be created on-site. This isn’t a bad idea – lots of connected and publicly accessible mini-habitat gains prevent ecological ‘dead zones’ from forming in development areas – but right now, enforcement and monitoring of these are unanswered questions. In effect, if your habitat creation is on-site, you don’t have to register the details in the same way as is required for off-site land, which puts the onus of monitoring and enforcement on local authorities.

The problem is that local authorities simply lack capacity. Budgets are extremely tight at a time when the whole sector is already struggling with capacity. We’ve yet to see exactly how this issue will be addressed and who will be responsible for it, but the lack of capacity raises straightforward questions over the level of follow-up monitoring and enforcement that will happen. This is before consistency in skills and competencies is taken into account. The possible variation in enforcement levels or standards all adds variability from local area to local area, which will reduce confidence in the overall system. On top of this, there is clearly a potential for the gain to be limited via recreational or urbanisation pressures.

There is huge transformational power in the requirements for biodiversity gain, but we still need to remember that many habitats are irreplaceable and integral. It is important that offsetting, either on-site or off-site, is only implemented after all reasonable steps have been taken to avoid and minimise biodiversity loss at a development location, because there is also a risk that, in a similar fashion to carbon credits leading to an increase in CO₂ emissions, these requirements end up enabling the further loss of biodiversity from our already critically depleted ecosystems.

The government guidance on local authority enforcement, whether through Section 106 Agreements or the new conservation covenants specified in the Environment Act 2021, has not yet been released. Nor do we know how irreplaceable habitats will be managed, but what comes next must empower councils with firm funding commitments and clear pathways towards building capacity for enforcement. It must also ensure that irreplaceable habitats are considered as such when planning applications are made. This is crucial to prevent the promise of future offsetting becoming a convenient price to pay for destroying integral habitats, and the success, or failure, of biodiversity net gain will depend on this.

Tim Graham

Tim Graham is associate director of RSK Wilding. He has over 20 years’ experience working in the environment sector and in nature conservation, including being the chief executive officer of two wildlife trusts. He has a particular focus on the field of restoration ecology and has worked on many projects involving landscape-scale delivery. He is a member of the Chartered Institute of Ecology and Environmental Management (CIEEM).

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