The Environment Bill – Our Thoughts

The Environment Bill was introduced on the 15 October 2019 by Environment Secretary Theresa Villiers. The Government has also published a policy statement alongside the Bill.

Environment Bank welcomes the Government officially acknowledging the climate emergency and biodiversity crisis and the need to address these through nature-based solutions.

Theresa Villiers – The Environment Secretary (Image: WikiCommons CC3.0)

The Secretary of State declared that endeavours should be across all of Government, not just Defra, and a new Office for Environmental Protection (OEP) is to be established to contribute towards the protection and improvement of the natural environment. The OEP will be tasked with overseeing a variety of long-term environmental targets which will be enshrined in law from improving air quality to minimising environmental damage through loss of biodiversity.

We are pleased that the Bill advocates a mandate for biodiversity net gain across England for all new developments to ensure that they “enhance biodiversity and deliver thriving natural spaces” – a concept that Environment Bank introduced back in 2007.

The net gain requirement has been set at 10% and will be able to be delivered either onsite, offsite or through a combination of these. To meet biodiversity net gain objectives, offsite biodiversity gain will be either through the purchase of biodiversity credits or through the provision of biodiversity gain enhancement works. Enhancement works delivering biodiversity gain offsite will be held on a national register. It is as yet undecided who will run this.

The plan is to deliver biodiversity net gain under a specific planning condition which sets out a requirement for the Defra metric to be applied and a requirement for enhancement works delivering net gain to be secured for 30 years.

Conservation Covenants

The suggested mechanism to secure the 30 year net gain is a fixed-term conservation covenant with a landowner that will provision biodiversity gain. At Environment Bank we already use ‘Conservation Bank Agreements’ with landowners to ensure enhancement works are carried out over the 30 year period. Our Conservation Bank Agreements are, in effect, fixed term conservation covenants (as outlined in the Bill).

Presumably, all onsite delivery (within the development site boundary) must also be subject to a 30 year management and maintenance plan according to a Biodiversity Management Plan for the site. It would be strange and inconsistent if the 30 year term (including monitoring) only applied to offsite areas (offsets). Developers would therefore presumably be required to provide a bond for the 30 years of management and monitoring rather than leave it to a management company to deliver and fund at a later date. If this is the case it would place further value on the cost-effectiveness of delivering biodiversity net gain through offsite habitat banks.

Nature Recovery Strategies

Biodiversity gains, where possible, will contribute to local nature recovery strategies in England – these will be areas, to be identified by local authorities, which will include national conservation sites and areas of particular importance for biodiversity. We see this as a great opportunity for local authorities to work with the Environment Bank to secure strategically placed habitat banks that will not only help deliver net gain in a streamlined way but will also contribute towards the nature recovery strategy objectives. Environment Bank operate as an independent arbiter between the landowner and the planning authority, which we find really helps secure the land. It also protects the Planning Authority from any claim of conflict, which could jeopardise a planning application through third party JR challenge. A regulator such as a Planning Authority cannot legitimately take money from those whom they regulate where they control whether or not a developer’s application succeeds in being permitted.

The Proposed Tariff

The Bill indicates a tariff mechanism where biodiversity credits will be purchased from the Secretary of State. This money would be used to enhance the biodiversity on land in England, purchase interests in land with a view to carry out works and also administration costs. Environment Bank believe that the suggested tariff system would need to be based on precautionary approach unless the credits were linked to a specific biodiversity gain provision agreement.

It is critical that an SoS tariff mechanism, if introduced, is only a last resort ie if the markets cannot find a suitable site for a development to deliver biodiversity net gain. It has been mooted that a fund generated by a centrally controlled tariff mechanism could be used to support the management of SSSI’s, SAC’s and SPA’s (not in the Environment Bill it should be stated). Clearly this would be totally inappropriate since such sites should already be properly funded under the statutory duty to maintain these sites in favourable condition. If this were the case there would be no potential for biodiversity net gain to deliver any biodiversity restoration in the UK.

The other conflict with a tariff based system is that it would destroy any opportunity for third party investors to come forwards and invest in the creation of offset sites/habitat banks (the concept developed by the Environment Bank). It is therefore essential that Government supports a market based approach to delivering biodiversity net gain, otherwise the system will fail to deliver any of the aspirations of the 25 year Environment Plan. It would also be contrary to Treasury rules whereby Government should not intervene where there is a private sector solution.

Finally, at the Environment Bank we are setting out a series of business standards and criteria as to what an offset site and habitat bank should achieve. We believe that these standards are critically important so that the system doesn’t perpetuate a race to the bottom simply based on the price of conservation credits.

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