Biodiversity is a critical natural capital asset and substantial government house-building targets will mean many thousand hectares of rural land will be developed for housing. The rapid degradation of habitat and species biodiversity has led to policymakers seeking solutions to restore biodiversity stocks. Biodiversity Net Gain (BNG) is a concept proposed in the 25 Year Environment Plan and mandated as a condition of planning permission in the 2019 Environment Bill. BNG requires a 10% increase in biodiversity after development, compared to the level of biodiversity prior to the development taking place.

Twenty-three per cent of planning authorities have already voluntarily adopted the measure and now that the National Planning Policy Framework includes compulsory BNG, it offers significant new income streams for landowners and managers.

The UK’s environmental industry organisations published good practice principles in 2016 that defined BNG as: Development that leaves biodiversity in a better state than before, and an approach whereby developers work with stakeholders to support their priorities for nature conservation.

POLICY PROPOSALS

Local nature recovery strategies

These will be produced by authorities to identify which local land is best placed for biodiversity recovery and enhancement.

Biodiversity gain plan

In order to be granted planning permission, developers must submit a biodiversity gain plan detailing exactly how a 10% uplift in biodiversity will be achieved.

Biodiversity gains site register

A national register where land in offset agreements will be recorded.

Land-use changes

Estimated costs of delivering BNG in the Oxford Cambridge arc

Savills modelled the process of achieving BNG across the proposed Oxford Cambridge arc development of one million new homes. The model estimated the costs and land requirements for delivering BNG.

If BNG was not mandatory, 35,000 hectares of agricultural land could be required for the proposed one million home development. This is around 3% of the existing rural area in the arc.

To implement a 10% biodiversity gain across the Ox-Cam housing development arc, at least 280,000 biodiversity units would be required. To work this out we used the Defra estimation of 7.47 biodiversity units lost per hectare of residential development on greenfield sites, although some academics consider this factor too high. We then accounted for a 10% uplift in the pre-development baseline biodiversity score. We assumed that for the entire new development all existing biodiversity units would be lost and replaced via BNG measures.

If all 280,000 units were created offsite, we estimate, drawing on Defra data and guidance, that around 68,000 hectares would be needed for offsetting. Combining land needed for development with land needed for offsite creation, this increases land use from 3% of the arc to 10% of the existing rural area in the arc.

SITE DESIGN IMPLICATIONS

When considering onsite versus offsite offsetting, onsite BNG delivery can be pursued to the point that the trade-off costs associated with higher density housing do not significantly compromise site design. However, in many situations, delivering BNG within the original development will have too great an effect on build density and associated economic viability, meaning there will be demand for offsetting land that holds value in biodiversity units.

Habitat creation

What does creating a biodiversity uplift really entail?

Converting a 10-hectare arable field (of moderate condition and connection within a local nature strategy plan) into a habitat with higher biodiversity value (of good condition) generates a range of biodiversity scores, depending on the habitat type created, as the graph below demonstrates. Each habitat type takes varying amounts of time to reach the target condition. The offsetting habitat chosen should fit within the local nature recovery strategy, and be the best replacement for the habitat lost through development.

There are some uncertainties. It is currently unclear where biodiversity land management advice will come from and it is also not known how offset income will be paid (for example, as a lump sum or annual payment).

The draft legislation sets a 30-year term for a BNG management plan, however environmental impact legislation may make it difficult to return land back to primary agriculture after this point. In the case of a BNG plan that requires a conservation covenant, land will be bound in agreement for a period of indefinite duration.

It is also important to remain aware of the tax implications of land-use change for environmental gain. Interestingly, one piece of land can be used for multiple planning applications, meaning the potential income could be cumulative.

Defra expects biodiversity gain to result in the creation and the avoidance of loss of several thousands of hectares of habitat for wildlife each year, which represents annual natural capital benefits of around £1.4 billion. This emerging market has significant potential, however financial returns will vary according to supply and demand in any given area.

_{Read the articles within Spotlight: Natural Capital below.}