The future of Biodiversity Net Gain

Biodiversity Net Gain (BNG) is England’s new statutory tool to prevent biodiversity loss due to development, and it is being talked about as a powerful new tool for nature recovery and a way to funnel private investment into doing it. It’s going to be mandatory from January 2024 (delayed from November 2023) for most developments where planning permission is needed.

A diagram showing the steps in the mitigation heirarchy for Biodiversity Net Gain.
Steps in the mitigation heirarchy for Biodiversity Net Gain (Adapted from Bennet et al., 2017)

Under BNG, development projects must provide a measurable improvement in biodiversity as a result of the development, offsetting any loss plus at least 10%. Several Local Planning Authorities (LPAs) want to mandate more; Kingston, for example, is looking for a 30% uplift in biodiversity with additional requirements around habitat connectivity. That 10% minimum net gain in biodiversity is quantified using the Biodiversity Metric, an accounting tool that uses habitats as a proxy measure for biodiversity.

Wild West?

While BNG will be mandatory from January 2024 (after a delay), you’d be forgiven for thinking that BNG, and nature finance in general, resembles the Wild West. Information has been patchy on regulation and implementation, and a national register of Biodiversity Net Gain sites is not due to launch until BNG becomes law. Local Planning Authorities across England vary in their approaches to BNG and their readiness to implement it. A third of England’s LPAs had no BNG requirements in their plans at the beginning of 2023. Meanwhile, a marketplace has been emerging for some time around natural capital payments for voluntary markets, including biodiversity, carbon, nutrient neutrality and water protection, with farmland being targeted for interventions. This year’s regenerative agriculture festival Groundswell had more of these businesses in attendance than I had seen before, with slick presentation and the promise of long-term income from diversifying land use.

Nature finance, or green finance, isn’t new. Carbon finance in particular has a chequered past, with problems around permanence and verification. Some rainforest carbon offsets are worthless and soil carbon certificates to date are likely to fall short of providing the certified emission offsets they claim. New voluntary carbon standards the Woodland Carbon Code and Peatland Code are already live, with standards for soils, hedgerows, saltmarsh and agroforestry in various stages of development. These standards are there as much as anything to address issues with permanence, verification and quality of carbon credits that go back over 25 years.

BNG or its regional variants needs enough assurance and quality built in to safeguard against greenwashing and to really drive nature recovery in the UK, so often described as one of the most nature-depleted countries in the world. BSI has been working on standards for implementing Biodiversity Net Gain.

New information

A series of announcements from Defra in July brought some clarity on BNG, including

  • Eligibility criteria to become a Responsible Body, that is, the body responsible for the creation of new conservation covenants, private voluntary legal agreements that landowners will enter into for delivery of Biodiversity Net Gain.
  • Statutory biodiversity credit prices – buying statutory biodiversity credits will be the option of last resort for developers who have exhausted their mitigation hierarchy and cannot deliver the required net gain on-site or off-site. These prices are intended to act as a deterrent (they start at £42,000, and you have to buy two for each unit of biodiversity you need to compensate for) with the income being invested by the government in habitat creation schemes.
  • £9 million in funding to help local authorities recruit the ecologists and support staff they need to deliver BNG (that’s about £28k for each local planning authority.)

Following these announcements, Defra has been hosting webinars with more information on BNG aimed at landowners in particular. These sessions were aimed at supporting landowners in making informed choices so that they can engage with BNG, though doing BNG will still involve ecologists, Responsible Bodies, Local Planning Authorities, developers, legal and financial support, planning, monitoring and verification. New businesses in this space are offering to do a lot of the facilitation around BNG, a commitment involving a minimum 30-year change of land use to deliver conservation-grade habitat enhancement.

More questions than answers

I joined both of Defra’s recent webinars for landowners and saw that most of the questions in the Q&A went unanswered because time ran out. Some basic questions were there, suggesting that some haven’t taken in the basic detail of BNG, or that the basic detail of BNG isn’t being spelt out clearly enough. Still more questions dealt with a range of issues including how rules apply when sites straddle LPA boundaries, what happens if BNG can’t be delivered due to factors outside the landowner’s control and how unit pricing is supposed to work.

BNG is being promoted as a diversification option for farmers alongside carbon sequestration and other natural capital payments at just the time when BPS dwindles to nothing and they are negotiating new funding streams, from the Sustainable Farming Incentive to other Environmental Land Management schemes and time-limited options. The range of options is one thing; how they interact or can be combined (or not) is quite another.

In the run-up to BNG going live this January, expect further announcements and more detail being fleshed out; also expect a lot of unanswered questions as more guidance and secondary legislation is released.

Possible futures

Biodiversity Net Gain could end up looking like a lot of different and exciting things: a leap in biophilic building and landscape design and other on-site mitigation measures creating brilliant new green spaces for work and living; premium off-site BNG units bundling carbon sequestration with biodiversity; rewilding with camping allowing nature to flourish while providing eco-tourism opportunities; landscape-scale projects involving multiple landowners with a whole range of benefits being delivered; resurrection of unloved places and neglected communities. A lot of these things are already being developed by some talented and passionate people.

Imaginative and holistic combinations of habitat enhancements and other works could be put together to bring about powerful improvements to biodiversity, carbon sequestration, pollution prevention, water protection, social good, health, landscape character, heritage and economic benefit. Clarity, simplification and new technical platforms could facilitate brokerage and prevent people from going insane figuring out how not to fall foul of rules around stacking, bundling and additionality. Biodiversity Metric data could be enriched by surveys of invertebrates, breeding birds, soil diversity, earth observation data and other indicators, telling a broader story and informing improvements. All of this could be supported, monitored, mapped, visualised and published by an open ecosystem of fintech and green tech providing backup to an army of fairly-remunerated ecologists, conservationists, farmers, landowners, businesses and communities. Sounds pretty great.

Or that might not happen.

The risks are numerous. Businesses delivering BNG that haven’t accounted for all of the costs involved in delivering it will either go under or underdeliver. Conservation covenants for BNG will lock land down for 30 years of biodiversity delivery regardless of low demand for units, inflation, finance gaps, fluctuating costs, drought, heatwave events and lack of rainfall (or extreme rainfall). Excessive targeting of low-hanging fruit such as marginal arable land or modified grassland enhancement could result in lots of neutral grassland while mosaic habitats and niche ecological communities could be left out. Communities could have BNG done to them, not developed with them. BNG could become a postcode lottery with strong areas of delivery and BNG deserts depending upon demand and LPA capacity. It could be a race to the bottom that fails to deliver the bigger, better and more connected ecological networks that are so needed and all of the very many co-benefits available.

It’s early days. The reality may be somewhere between these best and worst-case scenarios. I’d much prefer the former.

What could help

To quote Inspiral Carpets, no one ever said it was gonna be easy. Biodiversity recovery at the scale needed needs a massive push, and BNG is just one part of that. These things could help.

  • Putting communities in the driving seat – through integrated local delivery and holistic approaches that include people in landscape restoration
  • Transparency, clear reporting and collaboration – and honesty about what doesn’t work, with clear paths to remediation
  • Technology to facilitate brokerage, planning, management, monitoring and verification
  • Open data standards and interoperability – the Biodiversity Metric gives us an example, with a government-backed, standardised approach to measuring biodiversity. From Earth Observation data to measures of social good, data that can be interpreted and transferred, so that a BNG delivery company uses the same language needed by an LPA, broker, Responsible Body or developer
  • Looking beyond marginal farmland and not avoiding complex or difficult sites and habitat mosaics
  • Pushing to deliver beyond the statutory 10% and beyond what meets the trading rules
  • Imagination and flexibility to blend BNG with the myriad of other options and supporting farmers and landowners to do that
  • Thinking beyond the land boundary about opportunities to deliver landscape-scale improvements, social good and economic benefit.

There will be more. If you’ve read this far, I’d love to know what you think.


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