BIO0055

Forestry Commission response to Environmental Audit Committee on Biodiversity and Ecosystems.

Executive Summary

• Our forests and woodlands make an immense contribution to biodiversity and the health of ecosystems. Policies and strategies for managing our existing woodlands and creating new ones must emphasise these benefits and seek to maximise them. While ancient semi-natural woodlands have highest value for biodiversity, all woods and forests, including those originally established as plantations, can be valuable for biodiversity with appropriate management. The forestry sector has developed over recent decades to become an exemplar of environmental management and how it can go hand in hand with sustainable economic growth. It combines the production of economic goods – most immediately timber and certain recreational experiences, with delivery of a wide range of other ecosystem services, from water management to public health, and of course biodiversity. Utilisation of timber ensures a financial underpinning to woodland management. Forestry and timber support over 80,000 green jobs and every £1 private profit generated through the management of forests for timber delivers £18 public benefit.

• Two fundamental causes of biodiversity decline which need focused attention are habitat loss and fragmentation. Positive land use change through habitat creation should be a focus of restoration efforts and can address fragmentation. The Government is ambitious in its aims for tree planting. The support for woodland creation and peatland restoration through the Nature for Climate Fund is welcome. Alongside the acceleration needed to deliver the government ambition to stimulate 30,000ha new woodland across the UK per year by 2025 (as recognised by the Committee for Climate Change), woodland management is also required to secure and enhance the biodiversity value of the existing 1.31 million ha of woodlands across England.

• Ultimately it is those who own and manage land that will decide how much of a role trees, woodlands and forests will play in our future economy and landscape, in protecting and enhancing biodiversity and whether woodland creation aspirations are met. To deliver these ambitions will require landowners to choose positive land management change to improve biodiversity, as part of their wider and varying land management objectives. Incentives and regulations need to be designed so that it is easy for landowners to make this choice. 

• Farmers need to make their land pay and Government is rightly focusing on this issue as we leave the EU. Generating annual income from relatively small areas of woodlands on farms and estates remains challenging. We need to develop policies that integrate farming and forestry in a way that appeals to farmers and allows a wide range of public benefits to be realised. This is perhaps the single most important point that must be addressed if we are to see more and better managed woodlands in our landscape.

• Initial financial investment and self-sustaining business models are needed to secure ongoing woodland management. Income, which can be reinvested in forest management including biodiversity improvements, can come through existing markets such as timber (for the low-carbon economy), recreation and tourism opportunities. Progress in developing private funding streams is led by carbon finance. Other potential finance streams include Biodiversity Net Gain and, though much less developed, wider payments for ecosystem services provided though nature-based solutions. To realise these potential opportunities requires ongoing work to value the benefits and develop clear metrics on what is being delivered.

• Monitoring biodiversity is challenging, data sets could be wider and there needs to be recognition of the potential fragility of some data collection systems, reliant on volunteers and NGOs.  Investment in data collection and sharing needs to build on the current £5 million Natural Capital and Ecosystem Assessment funding. The Forestry Commission continues to invest in long term monitoring of woodlands through the National Forest Inventory.

• The shift from the Common Agricultural Policy to ELM represents the greatest opportunity to achieve the policy ambitions for woodland creation and management in generations. We support the Environmental Land Management (ELM) scheme approach of public money for public benefits. Woodlands deliver across all the 6 aims of the scheme, which need to support both woodland creation, including capital payments upfront and ongoing maintenance and management. To achieve its ambitious objectives, it needs to be easily accessible to all landowners and managers. In navigating the changes and multiple opportunities, particularly in a time of changing land management support regimes, there needs to be strong advisory support for those who apply, to give trust and confidence in the system and secure the intended outcomes.

• The Environment Bill sets out what should become a strong, well-integrated and potentially transformational framework to improve biodiversity, which will support/underpin the Nature Recovery Network to deliver the Lawton principles to create more, bigger, better and joined up spaces for nature. Local Nature Recovery Strategies (LNRS) will help to set local priorities and link to financing opportunities. To fully realise these opportunities LNRS need to play a key link not only in helping inform ELM uptake locally, but also between Local Plans, developers and the land management sector who can deliver nature based solutions to help mitigate, compensate and enhance the environment. Biodiversity Net Gain is a helpful first step towards further investment from the development sector. However, we urge continued progress towards developing the policy and practice of Environmental Net Gain, as this focus on biodiversity risks undervaluing other benefits from creating and enhancing these habitats.

• The Nature Recovery Network, whilst having native species and their habitat assemblage at its core, should recognise that ‘nature’ includes all living things, not just native species.    It needs to embrace the wide suite of nature-based solutions, delivered through habitat restoration and creation (including woodlands), which are based on biodiversity but also deliver wider ecosystem services. This will ensure greatest opportunity to balance funding streams from Government and from private investment, building on a clear understanding of what both landowners and the investment sector are willing to invest in and the best mechanisms to stimulate such investment.

• A wide range of policies and other mechanisms stimulate biodiversity through woodland creation, enhancement and protection, with strongest protection for ancient woodland. Currently for trees and woodland, the most recognised mechanism to incentivise such activity is through woodland grants, currently a range including Countryside Stewardship and, in future, ELM. A proportion of these budgets support woodland creation and management activities. However, biodiversity indicators demonstrate little change and improvement. To immediately stimulate improved woodland condition for biodiversity, support needs to be given to bring more woodlands into management including tackling threats including managing herbivores which damage trees and tackling tree health challenges. The impact of development on trees and woodland needs to be better monitored. The development of timber and wood markets will help give a stronger financial underpinning to woodland markets, alongside emerging markets for ecosystem services.

• Policy can be better integrated to address biodiversity, climate change and sustainable development by better understanding the benefits and value of ecosystem services delivered by natural capital assets such as woodland. There needs to be increasing integration of natural capital approaches into decision making, not just in central but also local government and business investment. When considering tackling climate change, it is recognised that investment in woodland creation is one of the most cost-effective mechanisms, building natural capital assets which also contribute to sustainable development. Trees also have a key role in ensuring climate resilience in urban areas and this needs to be fully recognised in the planning system.

• New woodlands provide a wealth of benefits and help to achieve many of the objectives of the 25 Year Plan. However, to contribute to meeting these objectives, woodland needs to be planted in appropriate locations avoiding sensitive features, need to be well-designed in line with the requirements of the UK Forestry Standard and, for some objectives, need to be spatially targeted to specific locations; improvements could be made as new incentives and initiatives are developed, including ELM and LNRS, to further refine the existing targeting approach. These approaches to spatial targeting need to be utilised alongside and in sensitive awareness of the values and motivations of landowners and managers.

• The foundation of our economy being on nature needs to be better recognised, with approaches that do not just balance, but build on conservation of nature promoted. The forestry sector is well placed to deliver this approach, combining delivery of economic goods alongside ecosystem services. In creating and managing woodlands which do this, the UK Forestry Standards underpins regulation which builds trust when balancing and maximising the benefits. This is also the basis for independent certification of woodlands, helping gain and secure market access. The further stimulation of wood for construction would help to underpin the financing of woodland creation and management, alongside uptake of natural capital valuation and assessment to build financial support for delivery of other ecosystem services.

• Both woodland creation and management are highly effective in achieving both climate and biodiversity goals, particularly when undertaken with a focus on Forest Landscape Restoration. Species introduction not only restores a species to its environment, but also helps restore fully functioning ecosystems and can have multiple knock-on beneficial impacts. Woodland creation also delivers wider ecosystems services such as improvements to water quality and managing flood risk. Including productive forests within the definition of Nature Based Solutions, as applied in the UK, would help to ensure that our managed semi-natural systems make their full contribution to mitigating and adapting to climate change, including through the supply of sustainably produced wood fibre to meeting society’s growing demand for timber and the future bioeconomy.

• Natural Capital accounting is a useful way to combine multiple ecosystem services into a single index. There remain many large assumptions made in the development of natural capital accounting, particularly for biodiversity, albeit that a wide range of research activity is now assessing how to calculate the value of various ecosystem services from natural capital assets. These require an understanding of not just the presence and extent of natural capital assets, but also their condition or quality and how this translates into actual delivery of services.

• The following needs to be in place to effectively draw in private sector carbon funding, with lessons for attracting investment funding for other ecosystem services:

• Clear support from Government for domestic offset schemes and Government guidance on how any credits might be used.
• While the market is developing, Government under-writing a minimum level of payment, to provide confidence that a market will develop in the future.
• A clear and robust framework and registry to secure investor confidence.
• A robust additionality framework, that supports appropriate ‘stacking’ to maximise environmental benefit.

Introduction

The Forestry Commission[1] (FC) is the non-ministerial Government department responsible for advising on and implementing forestry policy in England. It is accountable to the Secretary of State for Environment, Food and Rural Affairs. The Forestry Commission manages the 250,000-hectare Nation’s Forest through its agency Forestry England[2], administers grants for expanding and managing forests, and regulates tree felling and Environmental Impact Assessment for forestry activities. It also provides advice to Ministers, undertakes and commissions research through its agency Forest Research[3], sets standards for good forestry practice, underpinned by the UK Forestry Standard (UKFS)[4], and is responsible for protecting England’s forests and woodlands from pests and disease.

This submission addresses the interaction between woodlands, biodiversity and ecosystems; the interest of the Forestry Commission in this call for evidence reflects the functions described above.

1.       How effectively is the Government monitoring the impact of UK activities on biodiversity, at home and abroad? 

1.1 Evidence of the current state of woodland ecological condition and how it changes over time is essential to inform the targeting of resources and woodland management in support of biodiversity and ecological resilience. Monitoring biodiversity is challenging as long-term monitoring is essential to understand environmental change.

1.2 In monitoring the impact of UK activities on forest biodiversity at home, the Forestry Commission has carried out woodland surveys and compiled forest inventories at 10–15-year intervals since 1924. The rolling programme of the National Forest Inventory (NFI)[5] assesses the size, distribution, composition, and condition of our woodlands through time. Up until recently biodiversity reporting of woodland condition drew on the Sites of Special Scientific Interest (SSSI) data and area of broadleaved woodland in management to indicate progress against National Biodiversity Strategy targets. In early 2020 work concluded to analyse and agree the ecological condition status of all woodland in Great Britain. Forest Research has been working with statutory agencies across GB to develop a statistical assessment[6] of 15 indicators of woodland ecological condition and a further classification of woodland habitat into its condition status of favourable, intermediate and unfavourable compared to a benchmark of a stand of ancient semi-natural woodland (ASNW) in good condition. This has enabled native, near native and non-native woodland stands (outside of protected sites) to be classified as favourable, intermediate, or unfavourable in terms of their ecological condition for the first time.

1.3 Forestry Commission’s Key Performance Indicators[7]  also include measures assessing biodiversity and they are aligned with indicators of the 25 Year Environment Plan. Forestry England measures the condition of the protected sites within the Nation’s forest, for example, 77% of Upland Bog SSSIs on the Nation’s Forest are in favourable condition, 9% is the average favourable condition rate outside of the Nation’s Forest.

1.4 A key issue in ensuring our monitoring systems are fit for purpose over the longer term, and in an increasingly data driven world, is to recognise the investment needed in systems to gather and share data, in data standards and licensing arrangements to ensure as much environmental data is open as possible.  Within the environmental sector significant species data is gathered by environmental NGOs, upon which Government and environmental assessment professionals are reliant. There is not a similar network and support for habitat monitoring. At local level much of this data is collated by volunteers, through Local Record Centres. The Covid19 pandemic has demonstrated risks to the resilience of these data collecting systems and the institutions that support it.

2.       How has the Government performed against the Aichi Biodiversity Targets and what further progress is needed?     

n/a

3.       Where should the four nations prioritise resources to tackle biodiversity loss?

3.1 Two fundamental causes of biodiversity decline are habitat loss and fragmentation[8]. Positive land use change to address these issues should be a key focus of restoration efforts. The support for woodland creation and peatland restoration through the Nature for Climate Fund are welcome. Woodland creation should occur alongside and as part of wider Forest Landscape Restoration[9].

3.2 Many of our woodlands are small (less than 10ha[10]) and are isolated from other patches of woodland. Outputs from the Wren project[11] has shown that small woodlands support proportionally fewer species than larger woodlands. Young woodlands (less than 60 years old) have been shown to support far fewer species than more mature woodland (120 years plus and ancient sites).  However, creation of new woodland can play an important role in tackling fragmentation of habitat, particularly where grants particularly incentivise increasing the size of existing woodlands or connecting existing woodland patches[12].

4.       How should the Environmental Land Management scheme maintain and improve biodiversity? What role might alternative land use play in delivering improvements to biodiversity under the ELM scheme?

4.1 Woodlands and trees are uniquely placed to deliver on all of ELM’s overarching goals – including biodiversity. The shift from the Common Agricultural Policy to ELM represents the greatest opportunity to achieve the policy ambitions for woodland creation and management in generations. We therefore welcome the principle of public money for public goods underpinning ELM.  

4.2 To maximise the delivery of biodiversity outcomes it is essential that the scheme supports and incentivises both woodland creation and the ongoing maintenance of newly planted and existing woods.  Failing to adequately support the management of woodland will significantly reduce the flow of public goods[13]  from them and reduce their resilience. In delivering against all ELM objectives, and learning from previous incentive schemes, ELM needs to make clearer links between environmental targets and its methods for achieving them.

4.3 In order to maintain and improve biodiversity and to reduce any potential blockers to ELM participation it is essential that ELM is available to all land owners who can deliver public goods and that eligibility is not restricted to particular businesses or land (such as just farmers or agricultural land). The Government’s priority, which the Forestry Commission strongly supports, is for all land managers, including farmers, to consider planting trees and woodland on their suitable land. The disincentives created by the CAP have been the major factor holding back agroforestry and woodland creation on farms, mixed estates, and other landholdings. ELM offers a once-in several-generations opportunity to set this right by levelling the playing field.

4.4 Achieving ELM aims will require not just financial support, but incentives and regulations designed with landowners in mind, so that it can be easy for them to make the choice to make positive land management change to improve biodiversity.  There are multiple concurrent government incentives that relate to land management and all of these will inform business decisions (ELM, Productivity grants, Tree Health grants, Biodiversity Net Gain, Woodland Carbon Guarantee etc).  To help navigate this complexity it is important that all these schemes are designed and built as an integral suite of offers so that their systems, rules and advice provision are coherent.  ELM can and should play a significant role in providing join up and ensuring this happens.  This is also true of the regulatory framework which must be considered during scheme design to mitigate against lengthy delays or bottle necks during schemes that have legal sign off requirements (notably woodland creation requiring Environmental Impact Assessments – but many other land management activities too).  The whole customer journey must be as seamless, integrated, and efficient as possible for applicants and all regulatory bodies (some of whom sit outside Defra). This need must also be reflected in the end-to-end scheme design and, critically, in ELM’s resourcing model to ensure that all relevant delivery bodies are adequately resourced to avoid their regulatory roles becoming a bottleneck to ELM’s successful delivery.

4.5 ELM represents a significant change in their business economics for many landowners.  Defra must recognise the increased need for bespoke and accessible advice during the transition period and needs to ensure that scheme pilots are polished enough to build trust and confidence.  Failure to do so could drastically reduce uptake of grants and risk the environmental gains made under previous schemes and those anticipated and required in the future.  Advisors will require training not only on ELM’s scheme mechanics but also the environmental outcomes sought and how to realise them, including by ensuring that all necessary regulatory requirements are understood and met. This advice must balance the applicant’s needs (which might include business advice) with government’s objectives, ensuring no conflicts of interest. Whilst it is welcome that ELM has six overarching goals, these represent a considerable increase in complexity with the added potential for conflicting outcomes. To maximise the benefits from the scheme, land managers need to be encouraged to think and behave differently. To achieve this, the provision of advice will need to be spread across all three tiers and should be a combination of multi-skilled generalist and specialist expertise (including forestry). The final ELM model must ensure that there is no net loss of expertise in the land management sectors, that the unique expertise of Arm’s Length Bodies is used in consort with any other provision and that specialist expertise is not inadvertently lost within generalist advice provision.

4.6 It is important that land managers are recognised for existing good practice and that the payment rates provide an incentive for forestry this is likely to need a system that supports capital upfront payment – especially to de-risk large scale woodland creation projects.

4.7 We fully support the recognition of the importance of urban and peri urban land for delivery of public goods – especially in reference to urban trees and tree planting[14] near to communities where the maximum number of people can benefit from the improvement to biodiversity and provision of other ecosystem services.

4.8 The Nature for Climate Fund/England Tree Planting Programme is a major government programme to increase woodland creation in England being delivered by Defra and the Forestry Commission.  This will contribute to the government’s target to plant 30,000 hectares a year across the UK by 2025.  The Programme is developing a range of mechanisms to support tree planting and woodland creation for a range of public benefits including biodiversity.  The Programme is due to run until 2025.  The expectation is that ELM will then provide a continuation of support for woodland creation and tree planting.

5.       How effective are the new measures to enhance biodiversity within the Environment Bill, particularly biodiversity net gain and Nature Recovery Networks? Do these measures complement existing regulatory frameworks and address issues surrounding how to value nature?

5.1 The Environment Bill sets out what should become a strong, well-integrated and potentially transformational framework to improve biodiversity. Delivering the Nature Recovery Network (NRN) should help to achieve the objectives that were set out in the Lawton Review (2010)[15] almost exactly 10 years ago[16] to create more, bigger, better and joined up spaces for nature.  Woodland creation and management will significantly contribute to the NRN and should be further stimulated through investment from Biodiversity Net Gain (BNG). A further key provision in the Environment Bill to ensure connection between the NRN and BNG is Local Nature Recovery Strategies (LNRS), developed locally at around county level. LNRS will help to articulate and spatially map priorities for investment in biodiversity, particularly in light of proposed changes to the Planning System. The combination of a clear 10% mandatory net gain for biodiversity and the priority setting through LNRS will smooth effective delivery of biodiversity net gain by helping developers and local authorities to best understand where development will have the least impact on biodiversity and where investment in new habitat creation or restoration will achieve best outcomes for biodiversity and wider environmental benefits, however it is important that the full range of ecosystem services provided by such investment are noted and supported. 

5.2 The Government’s 25 Year Environment Plan also commits to Environmental Net Gain and we are keen to see continued and prioritised rapid progress in the development of this policy and mechanisms for its delivery. This includes clearer recognition for how investment in nature based solutions – such as woodland creation - can, whilst supporting biodiversity, be a cost effective approach to tackling climate change, flood risk and water quality issues and also providing green spaces to support a healthier life style. This recognition of the wide range of value is pertinent in regard to the development of mandatory Biodiversity Net Gain. Biodiversity Net Gain recognises the biodiversity benefits of the habitats created and managed. However to make best choice of investment in habitats as nature based solutions, the full value of the wider range of ecosystem services delivered across the life time of the habitats needs to be better recognised - not just discounted until the point of best condition of the habitat for biodiversity. This is particularly the case for woodland and other habitats which may take time to reach their best condition for biodiversity[17]. 

5.3 Hence we are keen to ensure that mechanisms alongside Biodiversity Net Gain, including LNRS, appropriately recognise the wider benefits provided by woodlands at all stages in their lifecycle. This will help to ensure the right investment in the right place to support delivery of the Nature Recovery Network, and tackle both the biodiversity and wider environmental challenges in particular localities. Overt recognition of other environmental benefits will help in development of sound LNRSs. This is particularly so as these are likely to be developed by local authorities who hold wider responsibilities, alongside their biodiversity duties, including some which can be partially and cost effectively delivered by nature-based solutions. Such approaches will become better articulated through continued pace in the development of Environmental Net Gain policy and practice.

5.4 As regards interaction between these measures and existing regulatory frameworks – all habitat creation and enhancement in the NRN will need to occur in compliance with existing regulatory frameworks. The Planning White Paper notes that the Government are planning to consult on adjustments to the environmental impact assessment regimes in the autumn. We support the intention that current levels of protection should be maintained, suggesting that opportunities to smooth or make clearer regulatory processes should be taken where possible. We also suggest that opportunities to ensure environmental enhancements, going beyond just assessing, mitigating and compensating for the impact of development, should be taken.

6.       How should Nature Recovery Networks be planned, funded and delivered?

6.1 The Nature Recovery Network, a network of places where habitats will be restored or created for wildlife, for climate and for people, is designed to be funded through a range of mechanisms. Government is working to integrate the objectives of the Network into funding streams including ELM, funds from Biodiversity Net Gain and climate finance.  The England Tree Planting Programme, with support from the Nature for Climate Fund, is expected to make a significant contribution to expanding and improving the network in its early years.

6.2 In planning the Nature Recovery Network there needs to be clear recognition of the wide suite of nature-based solutions, delivered through habitat restoration and creation, which are based on biodiversity but also deliver wider ecosystem services. This planning should balance assessment of a range of spatial layers, evidence on habitat distribution and condition with opportunity for ecosystem service delivery along with understanding of land manager and owner preferences.

6.3 The description of the NRN needs to articulate the range of outcomes from habitat creation and management activities, which sit under the high-level priorities of being ’for nature’. This will ensure greatest opportunity to balance funding streams from Government and from private investment, building on a clear understanding of what both land owners and the investment sector are willing to invest in[18] and the best mechanisms to stimulate such investment[19]. 

6.4 Both newly created and better managed woodlands will be a key part of the NRN. To ensure funding for their ongoing management, woodlands need to be designed to be productive alongside their role in protecting and enhancing biodiversity. Forests created for wood production have significant value as a biodiversity habitat, even with their young age and largely non-native species[20]

6.5 The soon to be launched National NRN Delivery Partnership gives good opportunity for shared vision and ownership of activity needed to stimulate the habitat management and creation at the required scale to make the NRN a reality on the ground. The partnership will need clear shared objectives to ensure that the opportunities from bringing together land managers and realise the interest from investor partners. To ensure good decision making for all delivering the Nature Recovery Network, funding will be required for collating underpinning evidence and monitoring data, please see question 1 for our view on this.

7.       How effective are other policies for conservation and enhancement of existing natural habitats, such as the Woodland Grant Schemes? (Note: FC have also provided narrative on grants through the Defra response).

7.1 Since the 1970’s forest policies have given increasing emphasis to environmental benefits. However, species and habitats are still at risk from inappropriate management, the long-term effects of habitat fragmentation and degradation, as well as possible adverse effects due to climate change and pests and diseases.  The UKFS[21] sets out how biodiversity in woodland can be maintained and enhanced.  Wildlife law[22] protects particular species and habitats in designated sites. The law also requires public bodies to have regard to the impacts on priority habitats and species in carrying out their duties[23]. 

7.2 The majority of woodland in England is native broadleaved woodland (over 800,000ha, approximately 70% of total woodland area)[24]. Net woodland area has increased over the last century with most new planting in England in recent years comprising native broadleaved species. The area of woodland in management is also gradually increasing. On 31 March 2020[25] 59 out of every 100 hectares of English woodland are actively managed (up from 57 in September 2014, and from 48% in 2008), totalling 772,000 hectares of woodland in management. However, the majority of this is coniferous rather than broadleaved woodland[26]. This demonstrates the important role of timber markets in ensuring that woodlands remain in management.

7.3 Woodlands are important for rare and declining species, supporting at least 250 of England’s priority species (Section 41[27]). Of the 447 fungi on the British Red Data Book list, nearly 400 are confined to Ancient Woodland and/or lowland wood pasture (pasture woodland). Review of delivery[28] against targets in the Convention on Biological Diversity (CBD[29]) – expressed domestically in Biodiversity 2020[30] shows that we are behind on delivery and not making enough progress to conserve priority species. 

7.3 Surveys of ecological condition for the National Forest Inventory survey show only 9% of woodland generally[31] and only 36% of woodland Sites of Special Scientific Interest (SSSIs) are in ‘favourable condition’. The 25 Year Environment Plan set a target of 75% of all SSSIs being in favourable condition by 2042. Forestry England has a programme of ancient woodland restoration, open habitat restoration on the Nation’s Forest estate and maintains its SSSIs in favourable / recovering condition (95%+) and has specific programmes to conserve or enhance specific species in particular places – e.g. butterflies, red squirrels, pine marten[32]. 

7.4 The diversity of woodland structure (important for different niche species) in many of our broadleaved woodlands has simplified over the last 50 years with the vast majority of broadleaved woodland now comprising high forest (closed canopy woodland) with low amounts of open space[33]. Management for biodiversity is generally seen as a cost to a landowner rather than a potential income stream. Most positive management for woodland wildlife is supported through grants and without them management stops e.g. withdrawal of restocking grant has resulted in less restoration of planted ancient woodland sites (PAWS) on private land[34].

7.5 A wide range of policies and other mechanisms stimulate woodland creation, enhancement and protection, with strongest protection for ancient woodland. For trees and woodland, the most recognised mechanism to incentivise such activity is through woodland grants, currently a range including Countryside Stewardship and, in future, to Environmental Land Management. A proportion of these budgets support woodland creation and management activities. However, biodiversity indicators demonstrate little change and improvement. To immediately stimulate improved woodland condition, biodiversity threats such as development need to better monitored and support given to manage herbivores which damage trees. The development of timber and wood markets will help give a stronger financial underpinning to woodland markets, alongside emerging markets for ecosystem services.

7.6 Increasing hardwood production through active management of more broadleaved woodlands would improve habitat condition and biodiversity. Active management also provides woodland owners with an opportunity to appropriately remove and replace trees affected by pests and diseases, most notably Chalara[35] dieback of ash. Fragmentation in the hardwood supply chain is perhaps the biggest market failure that has a negative impact on biodiversity. However, this appears to be changing in some parts of the country where large markets have been developed by private initiatives supported by government advice and incentives. Demand for hardwood is now high and prices are strong[36] – this can offset the costs of woodland management designed to increase biodiversity.

7.7 Agri-environment grant schemes provide the principal source of funding for the management of protected sites in England and for the restoration and creation of wildlife-rich habitats. They cover 58% of the agricultural area with 42% attracting some form of payment.  This include payments for 101,506ha of woodland. In addition to these figures there are significant areas of woodland in schemes managed by the Forestry Commission. Countryside Stewardship (CS) is currently the primary source of funding to support woodland interventions in England. It addresses the threat to biodiversity posed by under-management[37] and supports woodland creation. In the 6 financial years of the Programme 2014/15 to 2019/20 £131m of woodland grants were spent of which approximately 54% was allocated for woodland creation and 46% for improvement of existing woodland. From April 2014 to March 2020 the Rural Development Programme for England (RDPE) supported the planting of 6,048 hectares of new woodland.[38]

7.8 The CS Woodland Creation measure’s principal objective is biodiversity alongside water quality and flood risk management. Applications addressing more than one objective are favoured.  In 2019/20 Government supported the planting of 1,956 hectares of woodland through this and a range of other initiatives.[39] Both woodland creation and woodland improvement also contribute to adapting to and mitigating climate change to meet domestic Carbon Budgets and international climate change commitments.  

7.9 However alongside grants there needs to be wider, improved landscape approaches to tackling threats to woodland biodiversity. Forestry Commission are encouraging woodland owners in target areas to work collaboratively to reduce damage caused by deer. Greater focus is needed to develop more effective management mechanisms to increase the level of culling. FC are developing these through ELM, other future incentives and regulation. The UK Squirrel Accord[40] is in place and aims to reduce damage to forestry caused by grey squirrels and conserve the red squirrel. The Accord is working with the Defra family to help produce an England Red Squirrel Strategy due to be published in 2020/1. Squirrel damage[41] undermines government investment in tree planting and may limit future availability of good quality oak and other species. Squirrel control is costly and generates no (or very limited) income.

7.10 Other important Government policies include the Keepers of Time policy[42], and guidance on appropriate management[43] of ancient woodland. The protection of ancient woodland from development and land use change occurs through the National Planning Policy Framework[44]. This was positively strengthened in 2018, but there are still losses of this irreplaceable habitat. There needs to be more effective monitoring of the impact this policy and related planning decisions on ancient woodland. Outside the SSSI series there is no mechanism to enforce management of ancient woodlands to maintain their quality or address threats.

7.11 The new England Tree Strategy[45], recently consulted upon, will focus on expanding, protecting and improving our woodlands, and how trees and woodlands can connect people to nature, support the economy, combat climate change and recover biodiversity.

8.       How can policy be better integrated to address biodiversity, climate change and sustainable development?

8.1 Biodiversity and ecosystems cannot be restored without addressing other environmental pressures, and the services that ecosystems provide cannot be safeguarded if they are not understood.  Woodland creation and management are good examples of how biodiversity, climate change and sustainable develop policies can come together in an integrated manner, as noted in the Clean Growth Strategy. The interest in trees, woodlands and forests has increased markedly in recent years and whilst there is general support for more woodland cover in England, there is significant and sometimes heated debate over what type of woodland should be planted where and for what purpose. A similar situation exists with the management of established woodlands; although there is consensus that the climate is changing, the actions that owners should take to adapt their woodlands to future climates can be contested. To maintain the flow of ecosystem services from our woodlands in the long term we recommend that government and industry supports more research to identify mixes of tree species and provenances of tree species, which are best adapted to the environmental change that is projected for the UK. Woodland creation and management remain cost effective approaches to delivery climate change mitigation and adaption, whilst creating a natural capital resource that provides economic benefits.

8.2 In urban environments, where over 80% of our population live, trees and woodland have an important role to play in helping bring together these policy objectives[46],  improving the ability of our existing towns and cities and new developments to cope with the changing climate[47], through (a) reducing the urban heat island; (b) providing shade for recreation and urban living; (c) contributing to sustainable urban drainage systems, and; (d) reducing the solar thermal load on buildings. Initiatives such as the Urban Tree Challenge Fund[48] aim to expand urban and peri-urban canopy cover to deliver these benefits, targeted at populations where existing canopy cover is low.

8.3 Greater protection from development is needed for woodland, particularly ancient woodland, although this must be balanced with the need for development in woodland where there is no other option. There is also an opportunity to enhance the environmental quality of future development and ensure that it is resilient to the impacts of future climate change, through combined woodland creation/development proposals. Trees and woodlands are a key component in green infrastructure and should be recognised and designed at any early stage in developments. Local planning guidance and regulations can require that all development includes a minimum proportion of woodland or green space[49], or Local Tree and Woodland Strategies developed[50], setting out a locally agreed tree canopy cover target[51].

8.4 Across government, and through continued strong support from Defra and the Treasury, the development and embedding of Natural Capital approaches[52] in decision making will help to both make clear what ecosystem services are being delivered through policy and delivery, as well as recognising their values, to shape the priorities for investment.  In March 2018, HM Treasury’s ‘Green Book’ guidance[53] was revised to ensure that government Departments consider implications of any policy, programme or project on natural capital and the benefits they provide to individuals, communities and businesses.

8.5 Government policy on these issues needs to be adopted across government, not just at departmental level – as is the 25 Year Environment Plan, and the inclusion of woodland creation policies in the Clean Growth Strategy. Development of Government policy needs be informed by advisers such as the Committee for Climate Change in order to understand where the actions to tackle biodiversity, climate change and sustainable reinforce each other.

8.6 Defra must continue to prioritise the development of its Environmental Net Gain policy, as included in the 25 Year Environment Plan, to help to understand where environmental pressures can be tackled through nature based solutions, helping to shape maximising of benefits and to understand and assess trade-offs where they may be necessary.

8.7 Clearer spatial planning for nature, for example through Local Nature Recovery Strategies – ensuring that they have strong links to Local Plans , will allow action to be targeted where it delivers a range of co-benefits for wildlife, for climate mitigation and for people.

9.       How can biodiversity and ecosystems help achieve the air, soil and water quality objectives in the 25 Year Environment Plan?

9.1 New woodlands provide a wealth of benefits[54] and help to achieve many of the objectives of the 25 Year plan, namely:

• Timber and bioenergy feedstock production.
• Carbon sequestration.
• Flood risk management.
• Wildlife habitat provision and increase in priority habitat.
• Public engagement with nature, recreation and health and well-being.
• Air quality improvement.
• Landscape enhancement.

9.2 To contribute to meeting these objectives, woodland needs to be planted in appropriate locations avoiding sensitive features[55], need to be well-designed in line with the requirements of the UK Forestry Standard[56] and, for some objectives, need to be spatially targeted to specific locations; Countryside Stewardship targeting and scoring achieves this, but improvements could be made as new incentives and initiatives are developed, including ELM and Local Nature Recovery Strategies, to further refine the existing targeting approach.

9.3 We should, however, not expect each new woodland to be ‘all things to all people’ and must recognize that different landowners will have different objectives and motivations for creating woodland, the UK Forestry Standard supports a wide enough range of activity to help achieve this.  In making decisions on tree species and delivery of biodiversity and other linked objectives it is important to note that many processes are as closely related to stand structure, as tree species diversity per se.  This is particularly the case for most light-related and water interactions, and a small proportion of the nutrient-related interactions[57]

9.4 Trees, woods hedges and shelterbelts take up more pollution from the atmosphere than shorter vegetation or other land uses (Fowler et al, 1989, Beckett et al, 2000b)[58].  This can be of particular benefit in urban areas, but it relies on appropriate siting of the trees[59].

9.5 Forest soil store 75% of the overall forest carbon stocks and peaty soils in particular are major store of carbon[60]. Up to 50-70% of forest soil carbon could be in a stable form especially in soils with high clay content, while in lighter structure soils and in organic layer carbon can be in much labile form[61] ). The greatest benefits in terms of increase in soil carbon can be realised through land use change from intensive arable to woodlands and especially with broadleaved species on mineral soils[62] Current UK forest policy avoids the afforestation of peat greater than 50cm in depth. However, the developing England Peat Strategy has bought in to focus a discussion on the future of currently afforested peatlands (on both deep and shallow peats) and whether these areas should be restored to peatland habitats. Forest soil protection is achieved primarily through adherence to the UKFS[63] good forestry practice requirements.

9.6 Woodland can improve water quality and reduce flood risk.[64] Woodlands can be created in targeted locations to improve water quality by intercepting diffuse agricultural pollutants before they enter water bodies and water supplies (contributing to Water Framework Directive River Basin Management Plan objectives and water status targets). Catchment level woodland creation can reduce the risk of downstream flooding by reducing the overall amount of water delivered to the river during peak flows (contributing to Floods Directive objectives and Flood Risk Management Plans). Woodland creation and installation of leaky woody structures within riparian zones and on floodplains slow flood flows and reduce downstream flood peaks. Woodland can also be planted to protect and enhance riparian and aquatic habitats by providing shade, stabilising stream banks and improving stream channel form and function (woodland contributing to Water Framework Directive River Basin Management Plan objectives and creation of wet woodland habitat for wildlife). Potential negative impacts of forestry on water include acidification of acid vulnerable catchments due to scavenging of acid deposition, increased siltation from soil damage and disturbance associated with forestry operations, and reduced water resources due to higher water use by trees. These issues are addressed by planting the right tree in the right place and covered by the UKFS, which sets out the legal and good practice requirements to protect the water environment.

Case study:

Another benefit of woodland creation as a nature-based solution, is that it can deliver improvements in water quality. Portsmouth Water, supported by Forestry Commission, have identified where woodland creation on the South Downs can reduce the input of nitrates. This change of land use from agriculture is more cost effective than constructing treatment works. The woodland also helps mitigate the spikes of poor water quality linked to large rainfall events. This outcome can be achieved through costs of £400-600/ha per year, with Forestry Commission assessing how such multi-functional woodlands could form part of the farm/estate business portfolio, optimising their value to the owner, society and the environment.

10.   How well is the UK addressing biodiversity loss in its Overseas Territories and in international development partnerships with other countries? 

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11.   What outcomes and protections should the UK Government be pushing for at the forthcoming UN negotiations on the post-2020 global biodiversity framework at the Convention on Biological Diversity COP 15?

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12.   What are the possible approaches to balancing economic growth and conservation of nature and its contributions? Is there evidence these approaches work and can be implemented?

12.1 The interim report from the Dasgupta review of the Economics of Biodiversity[65] states clearly that our prosperity is dependent on nature “providing ‘ecosystem services’ on which our economies and livelihoods rely”. Hence it promotes the need to recognise and manage nature as an asset – rather than something to balance in opposition to economic growth.

12.2 The forestry sector can be held up as particularly well placed in balancing conservation of nature whilst supporting economic growth. It combines production of economic goods – most immediately timber and certain recreational experiences, alongside delivery of ecosystem services. Utilisation of timber ensures a financial underpinning to woodland management. Forestry and timber support over 80,000 green jobs and every £1 private profit generated through the management of forests for timber delivers £18 public benefit[66]

12.3 To enable and ensure trust in multi-purpose forests it is important that this is underpinned by recognised standards. The United Kingdom Forestry Standard (UKFS) is the reference standard for sustainable forest management in the UK[67]. It sets out the approach of the UK governments to sustainable forest management, defines standards and requirements, and provides a basis for regulation and monitoring – including national and international reporting. Its coverage of a wide range of guidelines related to environmental assets helps to build trust in ensuring that the right tree is in the right place.  UKFS compliance is mandatory for regulatory compliance, receipt of public funding for forestry, and for evidence of sustainability for timber certification schemes.

12.4 Trust will be retained and built between landowners, key stakeholders and the public by recognising where there may be trade-offs and giving guidance on how to navigate land use decisions in those situations. For example, the governments’ Open Habitats Policy exists to guide how to decide when to convert woods and forests to open habitat in England[68]. Such approaches need to be developed further to ensure maintained confidence that in following woodland creation and management policies, there is integration to ensure the best land management choice is made

12.5 UKFS is also the basis of forestry practice for the independent UK Woodland Assurance Standard (UKWAS), which is used for voluntary independent certification, which helps to open and secure markets for timber. 43% of the woodland area in the UK is certified[69]. Under the Renewable Heat Incentive (RHI) UKFS-compliant Woodland Management Plans and associated Felling Licences may be used as the evidence of sustainability of wood fuel necessary in order to qualify for payments.

12.6 All woodlands which make up the Nation’s Forest are certified and the certainty of harvesting volumes from the PFE underpins investment decisions from timber-processors. In England much of the woodland resource is under-utilised, particularly broadleaves, which make up 74.5% of the total woodland resource but only 24% of timber harvested[70].  

12.7 Opportunities to stimulate the market need to be taken, particularly through increased use of timber in construction, which also acts as carbon store. The Clean Growth Strategy and 25 Year Environment Plan also identified potential carbon abatement that could be achieved through increasing timber in construction. The Read Report (2009)[71] indicated that between 2009 and 2019 there was potential to increase the carbon stored in the UK’s housing stock by 37 MtCO2e with further savings of 74 MtCO2e achievable through fossil fuel emissions avoided as a result of the wood substituting for materials with higher embodied carbon.  77 percent of new houses in England in 2018 were masonry, whereas 83 per cent of Scottish housing starts are timber frame (STA 2018). Increasing the number of timber frame homes in the UK each year from 60,000 to 270,000 could reduce embodied emissions in the residential construction sector by 0.5-1MtCO2 e per year[72]. Options to stimulate this market involve investment in the sector skills[73], mechanisation, and also in the construction industry to make full use of rapid modern methods of construction which include timber framed housing, mainly constructed offsite. 

12.8 Natural Capital valuation and accounting can lead to further investment that utilises private investment to fund the ecosystem services that natural capital delivers. This approach is not just helpful in terms of potential to attract investment, but also as a powerful way to communicate about the multiple ecosystem services benefits which are often overlooked in society. Landowners are increasingly appreciating the opportunities to deliver a wide range of nature-based solutions. To ensure update of these approaches requires closer working between national and local Government, business and land managers, sharing a broad vision of an integrated and multifunctional landscape.

13.   What does the UK Government need to do to maximise human prosperity – in terms of health, economic, and social wellbeing—within the ecological and resource constraints of a finite planet? What alternative models and measures of economic welfare can feasibly help achieve this?

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14.   Which nature-based solutions are most effective in achieving both climate and biodiversity goals?

14.1 Nature-based solutions (NBS) can play a key role in achieving both carbon reduction and biodiversity targets, and in helping us adapt to climate change. Defra’s assessment is that on land, restoring degraded peatlands; appropriately implementing multi-purpose woodlands; and restoring or recreating wetland and coastal habitats will offer the greatest benefits for tackling climate change, whilst also benefitting biodiversity.

14.2 Both woodland creation and woodland improvement contribute to the objectives of adapting to and mitigating climate change: woodland creation sequesters carbon[74], helping to meet domestic Carbon Budgets and international climate change commitments, while also enhancing the climate resilience of the overall resource and, when spatially targeted, helping society to adapt to climate change through reducing flood risk. Woodland improvement provides opportunities to enhance the resilience of woodland to ongoing climate change[75] which, at the same time, helps to maintain future carbon stocks and the strength of the carbon sink.   The value of woodland creation and management can be further enhanced through a focus on Forest Landscape Restoration2.

14.3 The government is committed to planting 30,000 hectares of trees across the UK per year by 2025 and to restoring 35,000 hectares of peatland across England. In 2019 it opened the £50m Woodland Carbon Guarantee, to pay landowners for capturing carbon, allocated £5.7 million to the planting of c. 1.8 million trees within the Northern Forest, and have kick-started a Great Northumberland Forest. In 2020, the government announced a £640 million ‘Nature for Climate’ fund to generate a significant increase in afforestation and peat restoration

14.4 Interpretation of the definition of NBS often excludes productive woodland and commercial forestry, reflecting the risk elsewhere in the world of commercial timber plantations replacing old-growth forest or other high value ecosystems. However, the strong regulatory framework that applies to woodland creation and the granting of permission to fell prevents this happening in the UK. The UK Forestry Standard[76] and Environmental Impact Regulations also provide a robust framework that ensures new woodlands contribute positively to biodiversity objectives; in addition to providing protection for priority species and habitats, the framework ensures that any management activity does not harm the natural environment. Furthermore, requirements for minimum proportion of native species and open ground habitat results in the creation of structurally diverse habitats that operate at a landscape scale[77]. It is worth noting that in the interim report of the Review of the Economics of biodiversity[78] nature was not seen as being uniquely synonymous with just native species.

14.5 The ‘Natural Capital Approach’ that Forestry England employs[79] ensures that biodiversity, carbon and economic objectives are balanced. Including productive forests within the definition of NBS, as applied in the UK, would help to ensure that our managed semi-natural systems make their full contribution to mitigating and adapting to climate change, including through the supply of sustainably produced wood fibre to meeting society’s growing demand for timber and the future bioeconomy.  

14.6 Establishing new woodland through natural colonisation – or ‘re-wilding’ – is appropriate on some sites and there is growing support for the approach to contribute to NBS. However, experience has shown that natural colonisation is often unreliable and generally slower (in terms of carbon uptake) than conventional woodland planting. Appropriate seed sources (resilient to the changing climate[80]) also need to be available nearby and there is likely to be a need for the management of vegetation and grazing mammals to establish a thriving woodland. Caution therefore needs to be applied to natural colonisation/rewilding as a technique for establishing NBS, with thought given as to whether it is appropriate on a site by site basis – or whether planting of a well-planned woodland creation project is likely to be more successful.

14.7 Species reintroductions, where suitable (i.e. following IUCN reintroduction guidelines3), not only restore a species to its environment, but also help restore fully functioning ecosystems and can have multiple knock-on beneficial impacts. For example, beavers are ecosystem engineers which can restore watercourses, boost biodiversity, as well as help with adaptation to climate change by slowing the flow of watercourses4

Case study

Following the trials of beaver releases in Knapdale Scotland[81], Forestry England is undertaking its own trials in the Forest of Dean and Cropton Forest[82] Beavers play an important role in complex wetland ecosystems, creating habitats for many other species. Few other animals have the ability to modify and shape their surrounding environment so much. Their damming creates complex pools and riffles, providing both deeper water and shallow, fast-flowing areas, important for a range of aquatic life. The coppicing they do opens up the canopy, creating areas of vegetation great for breeding birds. How they feed increases deadwood in the watercourse, which leads to an abundance of invertebrates. Beavers are often referred to as ‘ecosystem engineers’ and known as a keystone species. Beaver dams also increase water storage and slow the flow of water downstream, potentially reducing the impact of flooding in the surrounding area. The dams can be up to 2-metre-high woven structures of branches and vegetation packed with mud to hold back the water.

15.   What would constitute clear indicators of progress and cost-effectiveness of nature-based solutions and how should trade-offs and co-benefits associated with nature-based solutions, biodiversity and socioeconomic outcomes be considered?

15.1 Natural Capital accounting is a useful way to combine multiple ecosystem services into a single index. Forestry England was one of the first organisations in the UK to assess the natural capital value of their estate, to report annually[83], and to start to embed this into decision making process. There do remain many large assumptions made in the development of natural capital accounting, particularly in relation to biodiversity, albeit that a wide range of research activity is now assessing how to calculate the value of various ecosystem services from natural capital assets. These require an understanding of not just the presence and extent of natural capital assets, but also their condition or quality and how this translates into actual delivery of services.  By assessing the fundamental functions of the ecosystem, and finding ways to integrate this into decision making, this will also help to understand how ecosystem services (by definition services for people) are affected by changes in habitat extent and management[84].  

16.   How can funding be mobilised to support effective nature-based solutions to climate change? How can the private sector be encouraged to contribute to funding?

16.1[85]. Currently less than 4% of public finance globally goes to nature[86]. There is a need to increase this, with the opportunity to better attract finance through better articulating the benefits, including in financial terms, of nature through the approach of Nature Based Solutions[87]. Investment from private capital is crucial to secure cost-effective delivery, through NBS, of up to one third of the global climate mitigation required by 2030 to hold warming below 2°C.[88]

16.2 Clear commodities and metrics are crucial for attracting corporate (private sector) investment in Nature Based solutions[89]. Research assessing common investment structures in mainstream finance, the social investment market and the young natural capital investment sector showed that developing an Environmental Impact Bond using payments by results had promise, but there were challenges in understanding and attributing the financial value of environmental outcomes[90]. It noted the strong attraction for corporate investment in carbon and natural flood management, whereas investment in biodiversity per se may be more challenging to secure. 

16.3 Our experience with the Woodland Carbon Code[91] (WCC - launched in 2011), indicates that absolute clarity over how credits/units can be used is essential to corporate investment. Initial guidance in the Environmental Reporting Guidelines that ‘woodland Carbon Units do not constitute carbon offsets because of the complexities associated with international carbon accounting’ was unhelpful. This led to confusion within both forestry and potential investment sectors. The clear commitment to develop domestic carbon markets in both the Clean Growth Strategy[92] and 25-Year Plan for the Environment[93] was helpful. It is anticipated that clarity in the forthcoming guidance for the Streamlined Energy and Carbon Reporting Guidelines will further promote private sector investment.

16.4 After early growth in the registration of new projects with the WCC, it stalled from 2015 to 2019[94], in part due to lack of future market confidence. The Woodland Carbon Guarantee[95] (WCaG), underpinned by the WCC was launched in November 2019 and has led to renewed interest. Positive media coverage, together with Government underwriting the risk of a thriving carbon market not developing, is likely to lie behind this rise in new registrations. Currently, across the UK, 485 projects are registered with the Code of which 248 have been validated (i.e. planted and confirmed as meeting all requirements of the Code) and 91 verified (i.e. successfully established and first carbon assessment undertaken at year 5). The WCaG operates via a reverse auction (i.e. the bidder sets the price that they will accept for carbon) beneath a reserve price, with the budget capped and the lowest bids offered a guarantee contract first. In the first two auctions, average successful bid price was £24.11 and £19.71, respectively compared to an average price of c£7 before this[96].  

16.5 Other opportunities for NBS to seek private sector finance exist for biodiversity (Biodiversity Net Gain), improvement in water quality (Entrade reverse auction in Poole Harbour[97]: and nitrate offsetting in the Solent[98]). ‘Stacking’ payments for the individual services may be possible – and indeed necessary to make a project financially viable. However, there is a risk that stacking will lead to ‘deadweight’ with no additional environmental benefit provided. The WCC has a robust additionality framework and such an approach is required for all potential services/schemes to ensure that maximum environmental benefit is provided.

16.6 In summary, experience from the WCC suggests that the following need to be in place to effectively draw in private sector carbon funding, with potential lessons for funding for other ecosystem services:

• Clear support from Government for domestic offset schemes and Government guidance on how any credits might be used.
• While the market is developing, Government under-writing a minimum level of payment, to provide confidence that a market will develop in the future.
• A clear and robust framework and registry to secure investor confidence.
• A robust additionality framework, that supports appropriate ‘stacking’ to maximise environmental benefit.