Biodiversity offsetting could improve environment and simplify the planning processes, says Government

The introduction of a 'biodiversity offsetting' scheme could make it quicker and simpler to agree a development’s impacts and a market to supply compensation for residual environmental impacts as part of the planning process, while protecting and improving the natural environment, according to the Department for the Environment, Food and Rural Affairs (Defra).

"England faces the twin challenges of growing its economy and improving its natural environment. These are my first two priorities for Defra, and provide the impetus for this green paper, said Environment Secretary Owen Paterson "

Paterson said "We must be open to new thinking about how our planning system deals with biodiversity if we are going to achieve these goals. Our economy cannot afford planning processes that deal with biodiversity expensively and inefficiently or block the housing and infrastructure our economy needs to grow."

"Offsetting is an exciting opportunity to look at how we can improve the environment as well as grow the economy," said  Paterson.

"We want to hear from developers and wildlife groups alike on how we can simplify the existing planning process while enhancing our natural environment. There is no reason why wildlife and development can't flourish side by side," he said.

Defra has published a green paper setting out how such a scheme could work, based on six trials of a voluntary approach to offsetting through the planning system currently running in England and various international approaches. It is seeking views on the proposals from developers and environmental groups that it can use to shape formal proposals for a UK biodiversity offsetting scheme.

According to the green paper, offsetting could be applied to any relevant terrestrial development consent regime. At present, the Government does not intend to include the marine environment within the scope of its general proposals for an offsetting regime.

Biodiversity offsetting means that developers have to commit to the provision of new wildlife sites that are superior to any site that they were allowed to build on. Similar schemes already exist in the US, Australia, Germany and more than 20 other countries.

In March, the Ecosystems Market Task Force recommended the creation of a UK biodiversity offsetting scheme as a means of tackling biodiversity loss while encouraging the development necessary for economic growth. The Task Force,  chaired by Ian Cheshire of Kingfisher and featured a number of business leaders, was set up by the Government to identify opportunities for UK businesses to develop green goods and services.

According to the green paper, a number of biodiversity offsetting systems are based on a metric which allows impacts on nature to be quantified in standard 'biodiversity units'. This metric allows non-experts to assess how different choices impact on biodiversity and whether harm can be avoided or reduced. In cases where harm cannot be avoided, the metric also allows compensation to be calculated quickly rather than negotiated on a case by case basis.

Defra has already developed an offsetting metric that is being used in six pilots projects, which have been running since April 2012 and are due to conclude in April 2014. This metric was developed to "strike a balance between being both simple to use and sophisticated enough to cope with the range of habitats, types and conditions seen in England". Any metric to be used in a future national offsetting scheme could be based on the pilot metric, however Defra suggests that it could be improved to reflect different species and improve the way it assesses habitat condition.

According to the green paper, the Government will only introduce an offsetting system if it is satisfied that it will "achieve net gain for biodiversity" while avoiding additional costs for businesses, consistent with the Government's ongoing regulatory review. Any system must also be "quicker, cheaper and more certain for developers" than current environmental requirements, it said.

Although biodiversity offsetting schemes have operated for a number of years in other parts of the world, they are not without controversy and have been branded "licences to trash" by some environmental groups. In particular, Friends of the Earth highlighted the fact that new nature sites need not necessarily be located in the same area as the one that they are replacing, resulting in a net loss to that particular community.

In its green paper, Defra said that an offsetting system could, in theory, "allow an offset to be provided anywhere, including overseas, as long as it would secure ecological gain".

"While the Government does not propose allowing international offsets, letting offsets be provided anywhere in England might lead to a net loss in some areas of the country (e.g. where there is greatest value in development) with net gain elsewhere (e.g. areas where offsets can be secured most cheaply)," it said.

Although Defra said that this could itself be both economically and environmentally beneficial, it noted the "adverse effects" of the loss to local communities under development of the sites that were being offset. It has asked respondents to the consultation for their views on whether any future offsetting scheme should place limits on the location of the replacement site.