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Biodiversity offsetting –
what does it mean for developers?

Biodiversity offsetting – what does it mean for developers?

Published: 29th July 2019
Area: Real Estate & Planning
Author: Paul Wakefield

Later this month, the Environment Bill is set to become law. As a result, developers will have to pay for biodiversity offsetting where habitats have been damaged. Although a worthy endeavour, the changes will increase development costs, and could, if poorly administered, cause a net habitat loss.

Paul Wakefield, one of our planning specialists, explains what planners need to be aware of once these new rules are introduced:

What is biodiversity offsetting?

Damage to habitats due to development can upset levels of biodiversity. To ensure this doesn’t happen, the Bill will introduce planning policies that encourage developers to leave sites with greater biodiversity than when they first entered them.

This mitigation hierarchy approach can involve avoiding, minimising, remediating, and if necessary, compensating for any negative impacts on biodiversity. If unable to do this, developers must cover the costs of replacing and maintaining the lost habitats.

Are there any potential issues?

The Bill is a positive step forward for the environment, but it could lead to a host of financial challenges:

New costs for developers
Higher property prices to balance the new costs
Additional costs for Local Authorities (LAs), who will need to employ ecologists to create mitigation strategies
Dishonest developers may bypass the mitigation hierarchy by falsely claiming they have used all options available and instead go the compensation route, forcing LAs to invest in replacing the habitat

In the case of a LA not being able to afford replacement habitat, the new rules could result in a net biodiversity loss. Therefore, the Government must ensure that compensation is only used as a final resort.

Keeping up to date with the Bill

Before the Environment Bill is fully implemented, a number of political events and legislative changes must happen. If Brexit fails to occur, EU environment law will still be in place, and the disruption to Parliament after the Conservative leadership contest could throw a spanner in the works. It is also likely that further changes to the Bill’s legislation will be made, so planners must stay on top of the rules and prepare accordingly.

In order to meet its ambitious sustainability targets, the UK must bring in measures such as biodiversity offsetting, as well as clean air and zero avoidable waste strategies. Although there is sure to be an increase in financial and time investments for developers, in the grand scheme of things, the new Bill carries many more benefits than disadvantages.

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