Crunching the environmental numbers

The Environment Bill is set to revolutionise the relationship between developers and landowners in England. Part 6 of the bill introduces a new obligation on developers to achieve a biodiversity gain objective. This is more generally known as biodiversity net gain. This is not just another woolly element of environmental assessment or mitigation, but a firm legal obligation. Compliance will be measured using a new system – the Defra Biodiversity Metric – developed specifically for this task. It will however be possible to buy your way out of the obligation. How will it work? The draft bill will add a new schedule to the Town and Country Planning Act 1990. This will make biodiversity gain a condition of planning permission in England (clause 90 of the bill). The bill also establishes a biodiversity gain site register and a system for the purchase of biodiversity credits in lieu of providing biodiversity gain itself. The cost of credits must legally be at a level that will encourage developers to provide physical biodiversity gain instead of paying for the credits. The biodiversity value of a development site will have to be measured in its physical state on the date a planning application is permitted. If the site has been “trashed” to reduce its biodiversity value before then, its condition at an earlier date may be used instead. The biodiversity value after the development must be 10% higher than it was before. This gain may be achieved on the site itself, or it may be located elsewhere. The 10% requirement can be changed by regulations. How will it be measured? The Department for Environment, Food & Rural Affairs has been working on its biodiversity metric for a few years; version 2.0 was published last December. Another update is due in December. The bill gives the metric legal authority as the tool for measuring biodiversity gain. The metric divides habitat into three distinct categories. First comes spatial habitat, where there are numerous land use categories specified along the lines of a phase-one habitat survey, eg grassland, arable land, woodland. The second category is hedges, where again there are several different types. Last comes rivers and similar waterways. Each type of habitat is assigned a habitat unit value. This value is then adjusted for the rarity, significance and connectedness of the habitat. The metric is applied in order to the site before development, the site after development, then to offsite habitat pre-development and finally to offsite habitat post-development. The values for all three distinct categories must be 10% higher than they were before.  The developer will present a biodiversity gain plan, which must be approved by the local planning authority before development can start. The plan may show that biodiversity credits have been purchased from government to the amount needed to satisfy the biodiversity gain obligation. Incidentally, these credits can be redeemed later if suitable habitat enhancement work can be put in place at that time. These new obligations will be a considerable undertaking for developers and local authorities, which will have to review and approve biodiversity gain plans. The table below gives an idea of how the metric works for a 200ha farm.  This demonstrates the opportunity for farmers and landowners to work with developers in satisfying the new obligation. Speaking at the RICS Midlands Regional Conference held online on 30 September, Professor David Hill CBE of the Environment Bank presented a case study of a 45ha Cambridgeshire housing site. The cost of achieving just 10% of the required biodiversity units onsite compared with locating them all offsite would be an extra £61m, given the loss of housing units and the relative values of the land concerned. Taking the 200ha farm above, it has a base value of 514.9 spatial biodiversity units. Let us say a nearby developer must find 200 spatial biodiversity units to complete the biodiversity gain plan for the 10ha of arable land it wishes to develop. Another 25ha of woodland might do it, allowing not only for the 200 units required by the developer but also the substitution of cereal land with woodland on the host farm. Long term considerations The gain has to be secured for at least 30 years. This may be straightforward if the entire site is owned by the developer, but what if the developer does not wish to buy the extra land to offset, or for that matter the farmer would rather take a payment than sell? Part 7 of the draft bill introduces conservation covenants – a topic for another day, but a new type of covenant for land under which positive obligations may become obligatory on new owners as well as restrictive covenants. Conservation covenants may be made in perpetuity or for a fixed period, and there are provisions for their modification and discharge before they have run their time. So what price and what mechanism to secure the biodiversity units and the work to achieve them in the example above? These are the deals waiting to be done once the Environment Bill becomes law. Charles Cowap is a rural practice chartered surveyor Image © FLPA/Shutterstock