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Biodiversity Offsetting proposal too simplistic - Green Watchdog warns

12 November 2013

Government plans to introduce a system of 'biodiversity offsetting' for new building developments could enhance the way the planning system accounts for the damage done to valuable natural habitats, but the proposals must be improved to properly protect Britain's wildlife and woodlands.

Joan Walley MP, Chair of the Environmental Audit Committee:

“Biodiversity offsetting could improve the way our planning system accounts for the damage developments do to wildlife, if it is done well. But Ministers must take great care to get offsetting right or they risk giving developers carte blanche to concrete over important habitats.”

“Many witnesses to the inquiry were concerned that the Government's proposal would allow offsetting to be applied to ancient woodland and Sites of Special Scientific Interest. There is a danger that an overly simplistic offsetting system would not protect these long-established eco-systems.”

The Government’s Green Paper does not provide an evidence based analysis of how offsetting would deliver “biodiversity gain”, according to the MPs. The twenty minute assessment for calculating biodiversity losses at a site, that has been proposed by Ministers, is also overly simplistic. It should include particular species, local habitat significance, ecosystem services provided – such as pollination and flood prevention - and ‘ecosystem network' connectivity to reflect the full complexity of habitats, according to the Environmental Audit Committee. For sites of special scientific interest, the weightings in the metric must fully reflect their value as national, as well as local, assets. Ancient woodlands should be even more rigorously protected.

Joan Walley MP added:

“The assessment process currently proposed by the Government appears to be little more than a twenty minute box-ticking exercise that is simply not adequate to assess a site’s year-round biodiversity. If a twenty minute assessment was carried out in a British wood in winter, for instance, it would be easy to overlook many of the migratory birds that may use it as habitat in summer.”

A mandatory, rather than voluntary, offsetting system would encourage a market to develop, which would in turn allow more environmentally and economically viable offset projects to be brought forward. The report concludes that poor uptake in the pilots suggests that a mandatory system is needed, but that the case for that has not yet been made and more analysis of the pilots is needed. The report also warns of a danger that an offsetting market could produce many offsets of a similar, lowest-cost, type rather than a mixed range of habitats. It recommends that the Government task Natural England with monitoring any offsetting scheme introduced to ensure a balance of habitat types are covered in the offsets, so that overall they are broadly similar to the habitats that are lost.

The report points out that as well the potential impact on wildlife and habitats, it is also important to consider the implications of biodiversity offsetting for people's access to nature and well-being. Offsets have to be near enough to the development site that local people can still enjoy the types of habitat and wildlife being affected, the MPs argue. Any offsetting scheme should take account of reduced public access to the biodiversity being lost with development.

A decision on the Government's offsetting proposals should not be made at this time, the MPs conclude. Offsetting pilots were set up in 2011 and these should be allowed to run their course and then be subjected to the independent evaluation previously promised by ministers. If that evaluation concludes that there are benefits in introducing an offsetting scheme, the Government should then bring forward revised proposals that reflect the concerns that we have raised in the report.

Joan Walley MP added:

“The Government’s offsetting pilots have not had a good take up. That suggests that these sorts of schemes need to be mandatory, but the Government should exercise some caution about this because the pilots need to be rigorously and independently assessed first to make sure all the lessons are properly taken on board. The Government will need to be sure that the poor take-up wasn’t a result of weaknesses in the offsetting scheme design.”


Government set out proposals for biodiversity offsetting in a Green Paper consultation, Biodiversity Offsetting in England, published in September 2013. The Green Paper envisages the development of ‘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.

Biodiversity Offsetting in England also sets out a prospective means of calculating biodiversity gains and losses for such a system. 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.

Defra, Natural England and local councils are also running six offsetting pilots begun in 2012.

The National Planning Policy Framework published in 2012 outlined a mitigation hierarchy, stating that if “significant harm to biodiversity resulting from a development proposal cannot be avoided, adequately mitigated, or, as a last resort, compensated for, then planning permission should be refused”.

The Lawton report warned in 2010 that “biodiversity offsetting must not become a ‘licence to destroy' or damage existing habitat of recognised value. Offsets must only be used to compensate for genuinely unavoidable damage”.

Further information