Biodiversity offsetting and net gain: licence to trash nature 

What’s a bee worth? What price your local river or forests? How do you value a great view or the places you go to relax or for recreation? And how would you feel if your local nature was moved elsewhere to make way for roads, housing or other development? 

These are not daft questions. Governments, economists and businesses are considering how harm to nature from development can be compensated for – for example by moving nature or creating substitute areas elsewhere.  

The motivation appears to be to make it easier for developers to get their way instead of requiring them to raise their game, to fully respect nature and improve how they build. 

When nature is in trouble it is worrying that ministers are considering making - jargon alert - ‘Biodiversity Offsetting’ and ‘Net Environmental Gain’ official conservation policy. 

We think offsetting and net gain are a license to trash. We think they’re a distraction from proper action to reverse the decline of nature and natural systems we all depend on.  

State of UK nature 

Nature is declining in the UK, natural ecosystems are under stress and many parts of the UK are biodiversity deserts.  

A third of the UK’s natural ecosystems are declining with many others in a reduced or degraded state. Reports on UK wildlife show that 3 in 5 wild species are declining with more than 1 in 10 facing extinction. 

Nature is seen not as a treasure to protect, enhance and restore but as an encumbrance to business and economic growth. Offsetting and net gain would simply give the government cover to perpetuate business as usual. 

Nature has been compromised enough. There's no place for half measures if we're to restore the nation’s declining wildlife and denuded habitats. 

Read our summary briefing on why biodiversity offsetting and net gain are bad news for the UK and for overseas. 

What value nature? 

Bees must be worth something as they pollinate crops that become our food. Bees do this for free but if they didn’t there would be an economic cost for us all.  

Economists are trying to work out the financial value of the many services nature gives us for free, from breathtaking views to functions such as the way forests and soils absorb climate-changing carbon - and bees putting food on our plates. 

Can the value of bees be turned into pound signs? Economists are trying to use what they call ‘natural capital accounting’.  

The thinking is that if nature’s value can be captured and put in front of politicians and other decision-makers they’re likely to make better-informed decisions. (Who knows, they might start protecting nature as a result.)

This is useful because decisions tend to be made without knowing the full worth of what may be lost when we destroy nature. We want politicians to be well informed when they make decisions – although you’d hope they’d decide to protect nature without having balance sheets in front of them. 

That said, if knowing the true economic value helps decision makers resolve to protect nature that is good.  

But is it possible to get true values? This is where trying to price-tag nature in all its complex glory gets tricky.

Do we value bees more than wasps because we love bees and hate wasps, even though wasps have their uses? Do we value bees the same as the plants they need to visit for food?

How can we value nature accurately when different species and habitats relate to and depend on each other? 

How do you value a great view from a hilltop? And is it worth more than a piece of waste ground which is regarded as an eyesore but which helps hold back flood waters for a nearby town? 

How do we value a species of plant today which may be the next cure for cancer but has not yet been discovered? 

Such bean-counting exercises work only up to a point. 

It’s not as simple as valuing a house – nature is more complex than that. But failing to capture nature’s complexity is like deciding that a palace should be valued at the price of a one-bedroom flat. 

License to trash 

Things also get tricky when natural capital accounting starts to be less about protecting nature and more about turning it into a tradable commodity to be sold to the highest bidder: you can destroy this ancient forest if you pay the right price.  

The result is that nature’s demise goes on because there are developers, businesses and financiers who can afford to pay top dollar to destroy it. 

All of this matters because the government is pondering making biodiversity offsetting and net gain part of official environment policy. 

The idea of offsetting is that when nature is lost to development in one place, it can be compensated for by creating nature elsewhere – and the value placed on what is lost helps to pay for it all. 

Net gain, meanwhile, is the notion that something provided in place of what’s lost is of greater value and will be even better than what was there before.   

Offsetting and net gain are supposed to be last resorts, used only when every effort to avoid environmental harm has been exhausted.  

That’s the theory. More to the point, does offsetting work? The government has claimed it does and points to Australia where offsetting has been practised for many years. 

The evidence is that offsetting has not been an overwhelming success in Australia nor in Germany, where it’s been official policy for over 40 years. 

Offsetting in Australia 

A 2014 Senate inquiry into offsetting was told by Environmental Justice Australia that: 

"The intention of biodiversity offsets is preferably to achieve a net gain, or at a minimum a no net loss of biodiversity on the ground. However, after a decade of offsetting in Australia there are no studies that show this is what occurs in practice. Indeed, studies indicate the opposite.” 

Adviser to the Australia government, Dr Gibbons also points to the gap between offsetting theory and practice: 

"I am very disappointed with the gap between the principles of biodiversity offsetting and practice. The science indicates that it is not feasible in the majority of circumstances to destroy biodiversity at site A and simply reinstate it at site B. Thus, to achieve no net loss of biodiversity in Australia, we must be prepared to constrain development to those sites where biodiversity can genuinely be offset – which means reducing the area available for development. Governments in Australia are reluctant to do this. Biodiversity offsets have not been audited effectively in any Australian jurisdiction, so the Australian community does not know whether this policy has delivered its intended aim.” 

In 2017 a review of 10 years of offsetting in New South Wales found that it would take over 140 years for the promised net gain in nature to be provided. 

That’s similar to the UK government’s suggestion that where local nature is destroyed compensatory land can be created elsewhere locally. But ‘local’ could mean over an hour’s drive away. 

The UK’s own offsets fail 

The UK government’s own offsetting pilot schemes have been found wanting. 

The pilots started in 2012 in 6 areas of England: Coventry, Solihull and Warwickshire; in 3 areas of Devon; Doncaster; Essex; Greater Norwich; and Nottinghamshire.  

A 2016 review of the pilots said they were, at best, inconclusive and that none of the pilot areas successfully secured offsets. The review said many important details due to be assessed in the pilots went untested. It concluded:  

“it will require additional resources and ecological expertise in local authorities to deliver it, and will increase costs overall for developers. It is likely that it would, at best, deliver only marginal benefits in terms of streamlining the planning process for agreeing compensation for biodiversity loss.” 

MPs demand safeguards 

When UK MPs examined the government’s plans to introduce offsetting in 2013 they recommended safeguards and said the plans needed to be more than a box-ticking exercise if offsetting is to “properly protect Britain’s wildlife”. 

MPs said the government must ensure that: 

• offsetting is truly a last resort and must not be used under planning rules or cosy deals struck between councils and developers;
• there are clear standards for how offsetting schemes are assessed, how losses and gains are calculated reflect the full complexity of habitats, species, local habitat significance, ecosystem services and connectivity;
• local councils and the government’s own wildlife watchdogs have the means to properly assess offsetting; 
• the details of any offset schemes are made public. 

It’s far from certain that these and other recommendations will be followed. Cash-strapped local councils already lack the ecological competence and capacity to properly assess developers’ plans. The government’s nature watchdogs are weak from over a decade of cuts, loss of expertise, political interference and pressure from business lobbies. 

For nature or for developers? 

When the government launched its 25 Year Environment Plan, with its aim to leave our environment in better condition by 2043, it used the Plan to promote net gain: 

"We will seek to embed a ‘net environmental gain’ principle for development to deliver environmental improvements locally and nationally. This will enable housing development without increasing overall burdens on developers.” 

The motivation for offsetting and net gain seems to be to make it easier for developers to get their way. It does not seem to be about requiring them to make their schemes less damaging in the first place.  

Government should not be distracted by unreliable, unproven offsetting, net gain and other dubious marketised trading schemes. 

Genuine solutions 

The urgent need is to improve protection of nature and biodiversity in the planning system. But it does not follow that we need new market-based offsetting and net gain systems to do this. 

There’s no substitute for proper nature conservation. It is proven to work and to be good value for money. Positive conservation is restoring degraded peatlands, re-naturalising canalised rivers and bringing back species which have been pushed to the edge across the UK and globally. 

The planning system must be strengthened, including by:  

• Planning policy being explicit about the priority of protecting nature and ecosystems. 
• Ending the preference in planning policy for economic growth over environmental protection. 
• Ending the presumption in favour of development under planning rules in England if net gain cannot be proven to work on all levels.  
• Ensuring that no offsetting can take place unless as a last resort. This requires a planning application to fully explore avoidance of damage, including the possibility of no development taking place, or it being located elsewhere. 
• Providing clear guidance on how any new development should incorporate nature; developers should be required to retain and create space for nature and to provide high-quality green infrastructure within and around their scheme. 

The government should also: 

• Secure protection of, and gains in, biodiversity from better use of the huge public funds given to farmers and landowners to boost nature. 
• Ensure proper enforcement of existing laws to protect habitats and species. 
• Use incentives to protect, retain and restore nature, to encourage habitats across farmland, not just on field margins. 

Government should be focusing on the rapid restoration and recovery of nature and ecosystems. It should not be distracted by hype about unreliable, unproven offsetting, net gain and other dubious marketised trading schemes.