Offsetting nature

‘Mike Hannis and Sian Sullivan explore the strange world of biodiversity offsets and habitat banking’, for The Land Magazine.

Land use planning is a key arena for the spectacles of localism and marketisation being staged by our self-proclaimed greenest government ever. The new “presumption in favour of sustainable development” aims to encourage housebuilding and other development by simplifying and decentralising the planning system, while protecting the natural environment. This protection is in part to be achieved through a new market in off-site mitigation, supplementing existing policies which (can) require on-site mitigation of habitat degradation. The proposed system allows developers to offset deleterious impacts on biodiversity in one place by paying for improvements somewhere else, at a market rate.

The message is that this “habitat banking” system will not only aggregate small habitats into ecologically significant reserves, while facilitating the development we allegedly need to escape financial crisis, but also open up new income streams for landowners
and reserve managers to spend on habitat conservation. By moving mitigation somewhere else, however, offsetting will also reinforce the idea that humans and other species live in separate places: that the non-human is not present in everyday life, but inhabits a separate world, which is fragile and in need of protection. Biodiversity offsetting and habitat banking will serve only to entrench this separation, further retarding the emergence of ecologically sustainable settlements.

 

Planning Reform: Good for Biodiversity?

Reform of the planning system is said to be needed in order to ‘cut red tape’, and thereby facilitate the increased development which will allow our economy to grow. This has in fact been an article of faith for the Conservative Party ever since the 1947 Town and Country Planning Act was passed. It probably reflects an instinctive opposition to the perceived socialism of the idea, inherent in planning, that landowners should not be allowed to simply do whatever they like with their land.

The new National Policy Planning Framework (NPPF, p. 4) states that,

At the heart of the NPPF is a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan-making and decision taking. 

This rhetoric is very reminiscent of the Thatcher era White Paper “Lifting the Burden”, which proclaimed “there is always a presumption in favour of development”. The word ‘sustainable’ has been added this time around, but the message is the same: land-use planning should encourage economic growth, not restrain it. The NPPF (p. i) thus states that,

The purpose of planning is to help achieve sustainable development. Sustainable means ensuring that better lives for ourselves don’t mean worse lives for future generations. Development means growth. We must accommodate the new ways by which we will earn our living in a competitive world.

It would, apparently, be old-fashioned to think that this growth might have damaging consequences for the environment. The 2011 Natural Environment White Paper (NEWP, para. 1.17) leaves little room for doubt:

We reject the outdated idea that environmental action is a barrier to growth, or that achieving economic development and a healthy natural environment are incompatible
objectives.

Putting the planning reforms into the context of broader environmental policy, NEWP states that the new streamlined planning system will in fact “contribute to our objective of no net loss of biodiversity” (para. 2.35).

 

Biodiversity Offsetting

This impressive feat of having your cake and eating it is in part to be achieved by biodiversity offsetting.

Biodiversity offsets are conservation activities designed to deliver biodiversity benefits in compensation for losses in a measurable way. Good developments incorporate biodiversity considerations in their design but are still likely to result in some biodiversity loss. One way to compensate for this loss is by offsetting: the developer secures compensatory habitat expansion or restoration elsewhere. (NEWP para. 2.38)

These offsets will replace or supplement existing arrangements for securing mitigation through ‘section 106’ agreements¹ and planning conditions. The claim is that this makes things easier for all concerned, as well as producing better conservation outcomes by aggregating small pockets of green space into larger areas. Offset purchases are also being suggested as an ex-post remedy for accidental damage to biodiversity (for example due to pollution incidents), facilitating compliance with the European Environmental Liability Directive, which came into force in 2010.

Voluntary pilot biodiversity offsetting schemes have started this year (2012) in six areas: Warwickshire, Coventry and Solihull; Essex; Devon; Greater Norwich; Doncaster and North Nottinghamshire. The proposal is that central government will eventually set up a legally binding framework for biodiversity offsetting and habitat banking, and mandate standard approaches to be applied to the valuation of habitats. As yet this has not happened: the current two year pilots are voluntary, and intended to inform DEFRA’s subsequent development of guidance and legislation. Volunteering local authorities have some leeway in how they operate their schemes, but they are subject to ‘quality assurance’ provided by Natural England as regards conservation standards and verification, and are expected to follow detailed DEFRA guidance non the ‘metrics’ used to calculate what offsets are appropriate.

Local planning authorities (LPAs) participating in the trial will process applications “in line with the normal development management process, including avoiding and mitigating impacts on biodiversity”, except that where “there is some biodiversity loss that requires compensation under planning policy, developers will be able to choose whether to meet this requirement by using the offsetting mechanism”. Where developers do agree to participate in the pilot, “local authorities will secure the implementation of the offset via a planning mechanism such as Section 106, or planning conditions.”²

It is important to recall that the “normal development management process” is itself undergoing radical change, as the strongly pro-development NPPF has entered into force almost simultaneously with the beginning of these pilots, superseding the previous far more detailed policy framework. While the final document did make some concessions compared to earlier drafts, concerns remain that the NPPF will in effect reduce protection for “ordinary” rural areas which are not covered by specific designations. These are precisely the sorts of areas likely to be involved in offsetting, and guidance issued to participating LPAs (p. 3) makes clear that “biodiversity policies in Local Plans should be consistent with the principles and policies set out in the NPPF”.

 

Developers and Habitat Bankers

DEFRA’s 2012 Guidance for Developers (p. 3) states that developers “can provide an offset themselves if they are able to do so, or they can commission someone else to do it for them”. A key feature of the scheme is that offsets can be traded, meaning that a developer can deliver the required biodiversity offset by simply buying credits from landowners and reserve managers, who accumulate these credits by creating, restoring and managing habitat in line with standards set down by central and local government. By selling these credits, landowners gain a new income stream, which helps ensure the viability of continued habitat protection. (Habitat serves as a proxy for biodiversity, as explained below.)

This is where the idea of habitat banking comes in. ‘Habitat banking’ is defined in a 2010 report by consultants to the EU (p. ii) as “a market where credits from actions with beneficial biodiversity outcomes can be purchased to offset the debit from environmental damage”.

Unlike the present situation, where funding for managing land for biodiversity is scarce, the vision is that offsetting requirements will stimulate substantial demand for these credits, making such management a commercially viable use of land. The idea is that providing habitat will become an attractive business proposition for landowners. Offset markets will incentivise them to proactively ‘bank’ conservation credits by investing in the creation or restoration of larger areas of habitat, calculating that their investment will be profitably repaid in the future from the sale of credits to developers. It is these banks (containing both habitat covered by credits already paid for, and habitat which is ‘banked’ awaiting the sale of credits) which are intended to provide the benefits of aggregating all the little bits of habitat together into larger ecologically valuable areas.

 

Nature Brokers – and Offsets Promoters

As part of this system, nature (in the guise of conservation credits) potentially becomes a tradeable asset, giving rise to new market opportunities. Private sector groups want a slice of this cake, and have indeed been heavily involved in baking it. One key player in England is a company called The Environment Bank, established in 2009 by professional ecologists, and received £175,000 in 2011 from the Shell Foundation to assist with the development of ecosystem service markets through piloting ‘the use of “eco-credits” in the UK to build environmental costs into land development proposals‘ (p. 14). In 2012, The Environment Bank describes itself as having been “established to facilitate mitigation and compensation schemes associated with planned development”³.

The Environment Bank claim additionally that the existing system produces “pitiful, poorly executed piecemeal schemes often repositories for supermarket trolleys, rather than providing a haven for wildlife”⁴. They have been enthusiastic promoters of the idea that it would be better for everyone if planners allowed developers to use offsetting instead, by buying conservation credits and spending them with an approved provider of habitat – of nature – somewhere else. They helpfully offer to “assess the credit requirements of development sites […] and source receptor sites from our registration system that can deliver the credits”⁵. This company is already involved in running one of DEFRA’s pilot schemes⁶. Its chairman, David Hill, is also currently the deputy chair of Natural England, who are in charge of quality assurance for these pilots. Other environmental brokerage firms in the UK, such as Climate Change Capital (now owned by US agribusiness firm Bunge), are similarly positioning themselves to act as brokers for an emerging offsetting trade⁷.

The emerging conservation banking market in the UK has to a large extent been inspired by (p. 3) the US wetland mitigation banking and species banking markets, as well as by other conservation banking markets in countries including Germany, Australia, Brazil and South Africa. Both DEFRA and The Environment Bank are represented on the advisory board of the Business and Biodiversity Offsets Programme (BBOP), an influential international body set up to “test and develop best practice on biodiversity offsets and conservation banking worldwide”⁸.

In February this year (2012) The Environment Bank launched an online conservation credit trading platform for England, described by David Hill as “a definitive market mechanism that will give developers greater certainty from the planning process”, which “will deliver truly sustainable development”⁹. This platform is not freestanding, but rather is an integrated part of the international mmEarth.com platform, hosted in 2012 in the US by Mission Markets™, described as a “boutique professional services firm specializing in the impact and sustainability sectors” who broker investment deals in the carbon credit, wetland mitigation banking, species banking, and other similar markets¹⁰. The application of biodiversity offsetting in England is clearly seen by such actual and potential participants in the emerging global biodiversity credits market as a key step towards later expansion across the EU and beyond:

[t]here is a unique opportunity to successfully render a working and effective system that can be replicated, improved and expanded across Europe and throughout the world. […] As a centre of global finance and trade, the UK can play a pivotal role in creating market rules that are workable and possess robust environmental integrity. This will be particularly important for one of the main barriers to creating a deep and liquid biodiversity market attractive to investors: selecting an appropriate “currency” or common unit of account.¹¹

 

Design Principles for Trading Nature

Several core design principles underpin conservation banking and associated offset markets. Here we briefly discuss five, all of which are constructed as working for the overarching principle of ‘no net loss of biodiversity’, or even more optimistically, ‘net gain’, producing the somewhat unintuitive assertion that ‘the environment’ will in fact benefit from development activity.

i) The Mitigation Hierarchy and the Circular Logic of Unavoidability

The widely adopted ‘mitigation hierarchy’ concept seeks to reduce the foreseen harm of a development intervention as far as possible, by adopting a staged approach to environmental mitigation, as shown in the Figure below¹².

The first stage is to consider how harm might be avoided, including whether the development should take place at all in the proposed location. Secondly, measures should be taken to ensure that any harm arising is minimised. Thirdly, the ecology and landscape of a development site should be restored after the lifespan of the development, so as to rehabilitate and reinstate remaining unavoidable harm. Compensation, including measures such as biodiversity offsets, is the last resort of the mitigation hierarchy. Offsets are indeed influentially defined by BBOP (p. 15) as follows:

[a] biodiversity offset is a commitment to compensate for significant residual adverse impacts on biodiversity identified after appropriate avoidance, minimization and on-site rehabilitation measures have been taken according to the mitigation hierarchy.

This “last resort” stage is increasingly interpreted in such a way as to permit the creation of conservation markets. When environmentally damaging development, and the ensuing harm, is rationalised as unavoidable, this apparent unavoidability legitimises
the idea of compensation, understood as off-site mitigation or offsetting. Offsetting thus reinterprets conservation as development-led, in that conservation activity now takes place because of, and funded by, development. All this, of course, can serve to obscure the key issues of who decides what development, and what environmental damage, is unavoidable where, and why.

ii) Off-site Mitigation

Advocates maintain that off-site mitigation will consolidate areas of ecological value, helping create and maintain resilient ecological networks (as recently recommended by the government’s so-called Lawton Report of 2010, Making Space for Nature). It is also presented by The Environment Bank as desirable for developers, since it provides a ‘simple, streamlined and secure’ route through the planning process, that also limits ‘long-term management costs and liabilities’ and will result in an ‘increased net developable area – because any habitat creation is done off-site’¹³.

The pictures below provide a schematic representation of how such consolidation is imagined¹⁴. The planned development area is clearly consolidated and expanded in the lower diagram, with conserved habitat also consolidated to a narrow linear band cutting through the centre of the development. Whether or not there is more environmental conservation value present in this diagram than in the mosaic of developed and conserved areas depicted in the so-called unplanned development of the upper diagram seems, however, open to question.

 

iii) Additionality

The third principle is that of ‘additionality’, as used in the EU Emissions Trading Scheme for carbon dioxide, and in other environmental markets, such as that in sulphur dioxide credits under the US Clean Air Act. In these frameworks a marketised transaction (of a unit of environmental health or harm) is permitted on the basis that this will manifest as a reduction of environmental harm that is measurably additional to that which would have occurred without the exchange. In conservation banking markets, a conservation activity is considered additional (and hence legitimately credit-bearing) only if it would
not have occurred in the absence of a payment.¹⁵

Payment is thus considered to have directly caused the measurable conservation effect, and hence to have generated conservation additionality. This additionality can be difficult or impossible to demonstrate, however. At a conceptual level this difficulty arises because detailed counterfactual knowledge is required of what ‘would have happened’ in the absence of the payment, and this can never be known in a fully accurate or conclusive way. In practice a further problem to date has been that many, if not most, conservation banking and offsetting schemes have simply designated a locality of existing relatively untransformed habitat. In US species banking, for example, most (107 of 123) banks were listed in June 2010 as preserving already conserved habitat.¹⁶ As such, species banks increase the credit-bearing value of land areas under formal, usually private tenure, but do not necessarily enhance conservation additionality or ensure ‘no net loss’ of species presence.

The additionality aspect of conservation banking may also generate counter-productive outcomes in which actions enhancing environmental health manifest only if they are associated with monetary payments. In economic parlance, this would constitute a perverse incentive. It risks displacing or “crowding out”¹⁷ environmentally caring activities done for aesthetic or moral reasons, or in acknowledgement of intrinsic values associated with nonhuman natures, by reducing such practices to a monetary value, and thus creating a context where such practices cease to exist in the event that they are not paid for.¹⁸

 

iv) Ecosystem Metrics: Constructing Commensurability

Habitat banking markets require a policy framework that permits exchanges in credit-bearing conservation units to occur between different localities. This requires conversion of the affected aspect of nature into a symbolic numerical measure that makes the two different places firstly commensurable with each other, and secondly able to assume monetary value (price) and thereby permit a marketised exchange.

In US species banking, species credits are awarded by the regulators (the US Fish and Wildlife Service) for the same species that will be harmed by development, and tend to be based on direct measures such as populations of breeding pairs or, commonly, acreage of appropriate habitat conserved, created or restored. Currently these must involve land areas relatively close to the affected population. Habitat banking as proposed in the UK, however, potentially allows for conservation investments to involve habitats that are both different to, and geographically distant from, the habitat impacted by development. In addition,

[c]redits can be produced in advance of, and without ex-ante links to, the debits they compensate for, and stored over time.¹⁹

This mirrors the US wetland mitigation banking industry, in which conservation credits can be sold after sites have received their status as a conservation bank but prior to being able to demonstrate ecological performance compliance.²⁰

As ecosystemic values are translated into numerical ones, an array of additional scoring ‘multipliers’ can be added into the mix, to deal with varied sources of risk, although as candidly noted in DEFRA’s Biodiversity Offsetting Technical Paper of 2012 (p. 12),

[i]f the worst case risk is realised (i.e. if the restoration or expansion fails to deliver), a multiplier will not solve the problem.

Perhaps oddly from an ecological perspective, financial insurance is also proposed in this technical paper (p. 13) such that the offset provider could take out insurance against their failure to deliver the right number of units.

 

v) Enabling Policy and Governance Frameworks

Critical for the creation of conservation banking markets is the presence of a supportive regulatory framework. This means that although a primary raison d’être for conservation banking is the maintenance of nature health through the institution of money-bearing privatised market exchanges, government regulation and public resources remain essential.²¹

For species banking in the US, for example, the key supportive legislation is the 1982 amendment of the 1973 Endangered Species Act, which permitted the establishment of species banks which could fund themselves at least partly through trading species credits. This federal legislation enables landowners, including those seeking to offset their own impacts, to apply to the FWS to establish species banks on their land, thereby converting the presence of protected species from a liability into an economic asset. It also enables developers, public or private, to obtain a permit to destroy the habitat of threatened or endangered species in one ‘service area’, so long as they buy credits in a ‘bank’ that protects that species in the same ‘service area’.²²

Proposals for habitat banking and biodiversity offsets in England, while resting firmly on an enabling policy framework in which decisions to require biodiversity offsets are made by local planning authorities, seem in contrast to be oriented towards the encouragement of voluntary offset transactions, facilitated by independent consultants and brokerage firms.

 

Metrics and Proxies

Turning to how these design principles translate into the specifics of the English scheme, the first point to note is that there is no proposal to actually measure biodiversity as such, in the sense of measuring numbers or populations of specific species:

[b]iodiversity in its entirety is impossible to measure so a ‘metric’ is used to represent, and provide a measure of, overall biodiversity. […] Metrics are transferable between sites and habitats, allowing an impact on one habitat type to be offset with conservation action elsewhere, or involving a different habitat type and/or quality of habitat. […] The metric we propose for the offsetting pilot is based on habitats. Development sites need to be mapped and divided into habitat parcels. The offset requirement (and resulting compensation) can then be worked out on a habitat basis.²³

Both development sites and offset sites are thus categorised according to the type(s) of habitat involved. Over 300 habitat types are identified in DEFRA’s 2012 guidance on Distinctiveness Bands for the Biodiversity Offsetting Pilot, but these are then grouped
into just three ‘distinctiveness bands’ denoting low, medium and high distinctiveness. Essentially high distinctiveness covers “priority habitat” , medium is “semi-natural” habitat, and low covers most other greenfield land.²⁴

A hectare of habitat can be ‘worth’ between 2 and 18 ‘biodiversity units’ depending on its condition and its distinctiveness²⁵, as shown in the scoring matrix constituting the DEFRA Metric for offsetting below (nb. the original DEFRA Metric shown here included the possibility of scores upto 24, but the top band for ‘condition’ was later removed to enhance simplicity):

There is also a requirement to “trade up”, meaning that the offset site cannot be of lower distinctiveness than the development site. Low distinctiveness land must be offset by the creation or restoration of at least medium distinctiveness land, and development on high distinctiveness land can be offset (if at all) only by habitat of the same type.

Both the development site and the offset site are assessed on this matrix, allowing for instance a development involving the loss of 6 hectares of low distinctiveness land in poor condition (i.e. 12 biodiversity units) to be offset elsewhere by the restoration of 2 hectares of high distinctiveness land from moderate to good condition.²⁶

This framework is portrayed as an attempt to move beyond simply measuring area, and towards reflecting the complex differences between different sites. Ironically though, in reality it is a key stage in achieving the objective of making different habitats commensurable. The development site and the offset site may be very different, but by first using habitat as a proxy for biodiversity, and then secondly applying numerical formulae, the approach achieves the apparent equivalence required to make offsetting appear meaningful and legitimate.

 

Multipliers and Incentives

On the offset side, three further formulae are also applied to this ‘baseline’ figure, before arriving at the final number of biodiversity units which a given offset project, of habitat creation or restoration, can deliver. These ‘multipliers’ aim to adjust the number of units delivered by factoring in the project’s location, the time taken for it to come to fruition, and the risks of it failing to deliver the ‘target’ habitat. The number of saleable units delivered per hectare is thus reduced, in proportion to:

a) the assessed risk of failure to deliver the target habitat in the target condition;

b) the number of years taken to deliver the target habitat in the target condition;

and c) how well the project’s location fits the local authority’s wider biodiversity strategy.

The effect of all this is, on the face of it, to encourage offset projects to be well conceived and realistic, and to be located where they will form part of a wider network of connected habitats. It also incentivises projects which deliver the target habitat swiftly, or ideally have already done so. In fact the clear and acknowledged intent is to incentivise habitat banking, since only a habitat bank can deliver the risk-free ready-made habitat required to get the maximum possible biodiversity units from its available hectares, avoiding any multiplier penalties.

This is because, due to the requirement for offsets to provide ‘additional benefits’, existing habitat cannot be counted as an offset except under very specific conditions. It must be shown that it would not have existed (or would have existed only in a poorer condition) were it not for measures taken specifically to develop an offset for later sale. This improvement cannot be shown retrospectively, as the initial condition of the site must be formally assessed and logged in order to later “prove that something additional
has been delivered” (p. 8).

 

So What Will the Effects Be?

One of DEFRA’s worked examples reads as follows (p. 3):

A housing development is proposed which will result in the loss of 6 hectares of arable field. The grassland is of low distinctiveness so the habitat score is 8*6 = 48 units. The developer finds that there are 2 local possibilities for offsetting:

Option 1: A habitat bank has 6 hectares of lowland meadows, created specifically for offsetting. Their establishment has been very good. The risk of failure is low, so each hectare is worth 8 units. The 6 ha area is therefore worth 48 units, and would meet the developer’s need.

Option 2: In response to the enquiry from the developer a local offset provider has said he is able to initiate a lowland meadow recreation scheme. Because of inherent uncertainties in the creation of this BAP habitat, associated with seed establishment and soil nutrients, there is a small delivery risk. It is therefore agreed that they should apply a multiplier of 2, in order to be confident that they will be able to deliver 48 biodiversity units. So they will be recreating the grassland over a 12 ha area.

Both options are worth the same number of units. The developer can select their preferred option, based on price.

It seems likely that the pre-established 6 hectare offset might end up as the cheaper option, and hence the one likely to be “selected based on price”. If so, to look at this scenario another way, what happens is simply that the developer pays some money to the habitat bank owner (perhaps a local Wildlife Trust), who use it to pay for some additional management activities on their existing land, thus meeting existing conservation goals. In return, as The Environment Bank put it, the developer’s “liability for compensation delivery [is] discharged once permission is received”, while they also get “increased net developable area”. This may well mean more houses can be built on the site, making the development more profitable.

Clearly, offsetting will be good for developers, as it is intended to make development easier and contribute to a net increase in land developed. It will therefore not be good for local biodiversity on the land which hosts this increased and more intensive development.

Offsetting could be good for habitat bank owners, such as green-leaning landowners or those (including Wildlife Trusts and certain NGOs) who manage existing reserves, as it potentially opens up a new income stream to fund the restoration or creation of more habitat. To this extent it may be good for local biodiversity on the land which hosts the new offsets.

There is however a substantial risk here that, if offsetting takes off, this new privatised funding stream may come to legitimise the reduction of other conservation funding, particularly that from the public purse. As a recent parliamentary briefing paper presciently observed (p. 2), “biodiversity markets are being increasingly employed as a means of incorporating the cost of nature conservation into development activities.”

Whether the positive biodiversity impact of increased conservation funding can adequately compensate for the negative biodiversity impact of increased development is, of course, the key question. If the overall frame of reference is accepted, this question arguably becomes an issue of detail and implementation.

 

Polarisation

But there are more fundamental problems with all this than whether it will work on its own terms. It is important to ask what the idea of biodiversity offsetting says about the relationship between humans and the non-human world.

One key message is that human habitat is best separated from non-human habitat: nature is best preserved by separating it from our daily life and safely enclosing it elsewhere. To an extent, of course, this problematic message is already conveyed by many more traditional conservation activities. But the offsets paradigm both explicitly entrenches the idea that nature can and should be concentrated away from humans, and also suggests that doing so can legitimise the creation of human places from which nature is ever more absent.

This human/nature polarisation is reminiscent of many other polarisations resulting from neoliberal economic policy, such as the global trend toward increasing inequality of wealth. Just as low-income families are being rehoused away from desirable parts of cities like London, so nature is to be ‘rehoused’ out of the way of lucrative development.

 

Transferring Significance: What is Conserved?

Is this conservation? It is presented as such, so should perhaps be judged as such. Commissioned by a statutory conservation body to reflect on the ethics of conservation, environmental philosophers Kate Rawles and Alan Holland came up with the following influential, if initially surprising definition:

… conservation has as much to do with conserving the future as with conserving the past. It is not, however, simply about preserving the potential for future exuberance, but about preserving the future as a realisation of the potential of the past. […] Conservation is about negotiating the transition from past to future in such a way as to secure the transfer of maximum significance.²⁷

In the case of biodiversity offsetting, the “potential of the past” inherent in the place which becomes a development site is lost. None of the significance of the place, as Holland and Rawles understand it, is transferred to the future. On this basis, no conservation has happened. What has been conserved is an abstraction: a net amount of habitat, which serves as a proxy for a net amount of biodiversity, both of which are located elsewhere. The place which has disappeared under a new development has not been conserved. Nor has its history, or any specific individuals or populations, or anything else that was previously valued about it.

What is conserved is, at best, “biodiversity” in the abstract. This new commodity is entirely divorced from both time and space – it exists outside history and has no place. It has been entirely decontextualised, and transformed into numbers. It has been made liquid and become “natural capital”, which can be moved from one bank account to another. This is explicitly about the conservation of capital, not of nature. The connected case studies below explore these implications in more detail.

 

 

A Tale of Two Offsets: In Which Two Wrongs Fail To Make a Right

Even before this year’s DEFRA pilots began, some local authorities had already been testing biodiversity offsetting within the planning process, through voluntary agreement
between planners and developers. One such agreement was made between West Somerset Council and EDF Energy, as part compensation for the ‘unavoidable’ loss of barbastelle bat habitat arising from the controversial site preparation works for Hinkley Point C nuclear power station.

An ecologist working for Somerset County Council calculated that in addition to EDF’s proposed onsite mitigation measures, in order to achieve ‘no net loss’ of habitat an offset of a further 8.7 ‘habitat hectares’ of offsite barbastelle bat habitat creation would be required. These hectares could be provided by EDF directly, or could be supplied through a biodiversity offsets trade with one or more habitat banks.

It is not clear from the planning documents quite what the bats are supposed to do during the time-lag between the destruction of their habitat (which is already happening) and the proposed habitat creation work. While the new habitat may eventually supply appropriate bat foraging habitat, and perhaps even be within the foraging range of the current bat population, it is unlikely to benefit the actual population of bats that currently forage on-site. Biodiversity offsets are invoked here to ‘green’ a substantial loss of actual habitat, transforming this into ‘no net loss’ of environmental value. But it remains hard to see how this translates into reality, given the level of disruption to specific place-based habitats and mobile species such as barbastelle bats.

Hinkley C nuclear power station remains the focus of resistance by environmental groups.

 

Uranium Mining in Namibia

Meanwhile EDF celebrate the recent Anglo-French agreement on nuclear energy production as providing ‘unprecedented opportunities’ for its ‘supply chain partners’. Fuel for Hinkley will be provided by the French company Areva, who source their uranium from countries such as Niger and Namibia. This connects the Hinkley offsets story with a very different landscape, where biodiversity offsets are also invoked in order to make nuclear energy development green.

The central Namib desert has recently experienced what the Namibian government calls a ‘uranium rush’, involving not just Areva but also other companies from China, India, Russia, Japan, Korea, Australia and Canada.

Uranium mining companies are seeking to capitalise on high uranium prices, though these have fallen significantly since the devastating impacts of an earthquake and tsunami on the Fukushima Daiichi nuclear power station in Japan in March 2011, resulting in reduced production. Over sixty uranium prospecting licenses have been issued, many covering areas considered to be biodiversity ‘hotspots’. The industry will also impact on numerous archaeological sites in the region. Licenses have already been granted within two of Namibia’s iconic National Parks, namely Namib-Naukluft and Skeleton Coast.

Areva’s existing Namibian uranium mine at Trekkopje is ‘poised to become the largest in southern Africa and the tenth largest in the world’, with an estimated life of 12 years. Production was recently suspended, but the intention is to resume production once uranium prices rise again, driven by demand from new reactors such as Hinkley C. Uranium mining in Namibia tends to be open-pit, involving the excavation of large swathes of landscape. For instance the proposed uranium mine at Etango (formerly a popular tourist location known as Goanikontes, showing the area’s displaced indigenous Khoe and Sān history), will be 6km long, 1km wide, and up to 400m deep.

Uranium mining also requires a host of support industries and assocated infrastructure. Areva has already built a desalinisation plant on the Skeleton Coast to provide the massive quantities of water required, which may be expanded to supply other mines. Construction of both a 400MW coal or gas-fired power station and a diesel emergency power plant is also proposed to provide energy for the uranium mining industry. Combined with its massive transport and construction impacts, this shows the absurdity of assertions that nuclear power is ‘zero-carbon’.

At the time of writing, the South African Gecko Group plan to construct three major chemical plants in Namibia to produce the vast quantities of acid reagents required for leaching the metal from the ore. These will cover 4,000 hectares, cause acid fogs devastating to local coastal ecologies, and dump their toxic production waste out to sea. Their proposed location has significant implications for the Ramsar-listed Walvis Bay Wetland, considered “the most important coastal wetland in Southern Africa and one of the top three in Africa”. Gecko’s response to environmentalists has been to state that they “pity… prophets of doom who lack the insight to grasp the spectacular future that lies ahead for this incredible country”, suggesting that they “should quietly move aside to allow those who have the vision, both in the public and private spheres, to grow Namibia to its real potential”. Ironically there are some 13 endemic species of gecko found in the Central Namib, of which three are of conservation concern. The proposed
operations of the Gecko Group will almost certainly not be good for real geckos (see below).

Offsetting Mining

Invoking the mitigation hierarchy and referring to BBOP guidance, the Namibian Ministry of Mines and Energy (MME) propose biodiversity offsets as a means of compensating for the ‘unavoidable’ direct loss of species due to projected landscape disturbance, as well as for indirect impacts due to ‘habitat loss, degradation and fragmentation’ and through the proliferation of other related infrastructure such as roads. They state that:

[i]t is clear that the developments […] will be unable to avoid priority biodiversity areas and as there are limited mitigation measures that can be implemented in the desert and because restoration of arid ecosystems is essentially untested, a large residual impact on biodiversity is expected. For this reason it will be essential to include the establishment of sustainable offsets… for many of the proposed developments.²⁸

Given the scale of the impacts to be offset, however, it is hard to see how such offsets could ever meet additionality criteria. The offset locations proposed (which include the Brandberg, Messum Crater, Spitzkoppe and Namib areas in north-west Kunene) already exist as areas of high ecological and conservation value. As such, their designation as offset areas for uranium extraction will not constitute added environmental and/or conservation value, and certainly not to a degree commensurate with the harms caused.

 

It is also suggested that indigenous ‘communal area conservancies’ might help deliver offsets by, for example, establishing plant nurseries for species that will assist with rehabilitation. This raises the further ethical problem of constructing rural Namibians as providers of environmental services to compensate for the environmental damage caused by others elsewhere. Finally, ‘no net loss in terms of tourism and recreation opportunities’ is proposed such that ‘the development of new tourism products (e.g. mine tours)’ will contribute to both environmental education and tourism, as if these are commensurable with current visitor experiences of the biodiverse, open and little industrialised landscape of the Central Namib.

The MME state that through such measures ‘companies stand to have a net positive impact on the ecosystems’, although elsewhere it notes more candidly that ‘under any of the mining scenarios envisaged, … [economic] benefits will be at the cost of the biophysical environment which will be a net “loser”’.

Given the massive impacts of extractive industry, and the sleight of hand suggesting that existing localities of high biodiversity value can serve as offset localities for these impacts, it is hard to see how offsetting can result in a net positive impact. It is even harder to see how the potential impacts of support industries such as Gecko’s chemical reagent plants can possibly be offset to engender anything like ‘no net loss’.

 

Published as Hannis, M. and Sullivan, S. 2012 Offsetting nature? The Land 12: 44-51, from longer version written for the UK’s Green Party think tank The Green House as Hannis, M. and Sullivan, S. 2012 Offsetting Nature? Habitat Banking and Biodiversity Offsets in the English Land Use Planning System. Dorset: Green House. The section ‘A Tale of Two Offsets’ comes from Sullivan, S. 2013 After the green rush? Biodiversity offsets, uranium power and the ‘calculus of casualties’ in greening growth. Human Geography 6(1): 80-101.

 

Connected peer reviewed publications

Sullivan, S. 2018 Making nature investable: from legibility to leverageability in fabricating ‘nature’ as ‘natural capital’. Science and Technology Studies 31(3): 47-76.

Carver, L. and Sullivan, S. 2018 Creating ‘good biodiversity yield per hectare’? Calculating conservation yields in the English Biodiversity Offsetting Pilot, pp. 122-144 in Bracking, S., Fredriksen, A., Sullivan, S. and Woodhouse, P. (eds.) Valuing Development, Environment and Conservation: Creating Values that Matter. London: Routledge Explorations in Development Studies.

Carver, L. and Sullivan, S. 2017 How economic contexts shape calculations of yield in biodiversity offsetting. Conservation Biology 31(5): 1053–1065.

Sullivan, S. and Hannis, M. 2017 ‘Mathematics maybe, but not money‘: on balance sheets, numbers and nature in ecological accounting. Accounting, Auditing and Accountability Journal 30(7): 1459-1480, special issue on ‘Ecological accounts: making non-human worlds (in)visible during moments of socio-ecological transformation’, edited by Markus J. Milne, Shona L. Russell and Colin Dey.

Sullivan, S. 2017 Natural capital, fairytales and ideology. Invited Review Essay, Development and Change 48(2): 397-423.

Sullivan, S. and Hannis, M. 2015 Nets and frames, losses and gains: Value struggles in engagements with biodiversity offsetting policy in England. Ecosystem Services 15: 162-173 (special issue on ‘Biodiversity Offsets as MBIs? From discourses to practice’, edited by Froger, G., Hrabanski, M. and Boisvert, V.).

Sullivan, S. 2013 After the green rush? Biodiversity offsets, uranium power and the ‘calculus of casualties’ in greening growth. Human Geography 6(1): 80-101.

Sullivan, S. 2013 Banking nature? The spectacular financialisation of environmental conservation. Antipode 45(1): 198-217.

Pawliczek, J. and Sullivan, S. 2011 Conservation and concealment in Species Banking.com, US: an analysis of neoliberal performance in the species offsetting industry. Environmental Conservation 38(4): 435-444.

 

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1. i.e. Agreements under section 106 of the Town and Country Planning Act 1990.
2. DEFRA 2011 Testing Biodiversity Offsetting, pp. 3-4. This document was published by DEFRA in July 2011, but has been superseded and is no longer online.
3. In 2020, reframed slightly as ‘[w]orking with developers, planning authorities and landowners to provide solutions for biodiversity net gain’.
4. Formerly here. Also see The Telegraph 2009 More than 3000 shopping trolleys dumped in rivers every year.
5. Formerly at http://www.environmentbank.com/conservation-credits.html.
6. Formerly referenced at http://www.essex.gov.uk/Environment%20Planning/Environmental-Issues/local-environment/Wildlife-and-Biodiversity/Documents/EBOP_Information_Sheet_2.pdf
7. Formerly at http://www.climatechangecapital.com/media/3696/Habitat%20Banking.pdf
8. Formerly at http://bbop.forest-trends.org/pages/about_bbop.
9. Formerly at https://environmentbank.mmearth.com/, also see here
10. Formerly at http://www.environmentbank.com/docs/Environment%20Bank-
    Mission%20markets%20release%20feb2012.pdf
11. Caldecott, B.L. and Dickie, I. 2011 Habitat Banking: Scaling Up Private Investment in the Protection and Restoration of Our Natural World. Climate Change Capital and eftec, London, UK.
12. See Anstee, S. 2008 A mining company perspective. CBD Business 2010 3(3): 36-38; Pricewaterhousecoopers, BBOP and UNEP FI 2010 Biodiversity Offsets and the Mitigation Hierarchy: A Review of Current Application in the Banking Sector. Formerly at http://www.unepfi.org/fileadmin/documents/biodiversity_offsets.pdf.
13. Direct quotes are from the guidance available in 2012, which has since now been updated.
14. These diagrams are reproduced from White, W. 2008 The advantages and opportunities, pp 35-36 in Carroll, N., Fox, J., & Bayon, R. (eds.) Conservation and Biodiversity Banking. London: Earthscan.
15. The concept of additionality is analysed in Bennett, K. 2010 Additionality: the next steps for ecosystem service markets. Duke Environmental Law & Policy Forum 20: 417-438. A detailed comparison between habitat banking and the EU-ETS carbon trading scheme is offered in eftec, IEEP et al. 2010 op. cit., pp. 96-97.
16. See Pawliczek, J. and Sullivan, S. 2011 Conservation and concealment in SpeciesBanking.com, US: an analysis of performance in the species offsetting service industry. Environmental Conservation 38(4): 435-444; Sullivan, S. 2013 Banking nature? The spectacular financialisation of environmental conservation. Antipode 45(1): 198-217 (online first, 2012).
17. As discussed in, for example, Frey, B. & Jegen, R. 2001 Motivation crowding theory. Journal of Economic
    Surveys 15(5): 589-611 and also in Dobson, A. 2011 Sustainability Citizenship. Dorset: Green House.
18. Spash, C.L. 2011 Terrible economics, ecosystems and banking. Environmental Values 20: 141-145.
19. eftec, IEEP et al. 2010 op. cit. p. 9.
20. For analysis of problems caused by this see Robertson, M. and Hayden, N. 2008 Evaluation of a
    market in wetland credits: entrepreneurial wetland banking in Chicago. Conservation Biology 22: 636–646.
21. See Foucault, M. 2008 The Birth of Biopolitics: Lectures at the Collège de France 1978–1979. Basingstoke: Palgrave Macmillan.
22. Fox, J. and Nino-Murcia, A. 2005 Status of species conservation banking in the United States. Conservation
    Biology 19(4): 996-1007.
23. DEFRA 2012 op. cit. pp. 2, 4.
24. Ibid. p. 5. “Priority habitat” and “semi-natural habitat” are as defined in the Natural Environment and Rural Communities Act, 2006.
25. Ibid. p. 7 (and in other DEFRA guidance documents)
26. It should be noted that this contravenes the BBOP principles, which recommends that the ratio of development area to offset area should not fall below 1:1, i.e. that the offset area should never be smaller than the area developed. DEFRA’s argument that BBOP guidance “may be […] not applicable to England” can be found at para. 43ff of their 2012 “Technical Paper”, op. cit.
27. Holland, A. and Rawles, K. 1996 The Ethics of Conservation: Report Prepared For, and Submitted to Countryside Council for Wales. TWP 96-01, Thingmount Working Paper Series on the Philosophy of Conservation and Report for the Countryside Council of Wales, p. 45 emphasis added.
28. MME 2010-11 Strategic Environmental Impact Assessment (SEA) for the Central Namib Uranium Rush. Windhoek: Ministry of Mines and Energy (MME), South African Institute for Environmental Assessment, and the German Federal Ministry for Economic Cooperation and Development, p. 7.89, emphasis added.