CPD articles

CPD: Biodiversity offsetting

2 July 2014

Moves to quantify construction's impact on the natural environment should help contractors achieve 'no net losses' if they develop biodiverse sites. Dr Julia Baker of Parsons Brinckerhoff reports.

As sustainable development and enhanced sustainable approaches have become an integral part of the construction industry, quantifying environmental issues, such as waste and carbon reduction, is increasingly important. Understandably, processes have developed to allow these issues to be measured and quantified.

In the UK, biodiversity – essentially the number, variety and variability of living organisms – has never been subject to such a “quantifying” approach. This is partly because there was no universal measurement that could be easily adopted, given the complexities of measuring diverse and dynamic eco systems.

Consequently, biodiversity reports have continued to be about “the potential of a site for dormice” and “the probability of great crested newts”. However, how we communicate biodiversity as part of a development will change if the government introduces the biodiversity offsetting proposal outlined in the 2011 Natural Environment White Paper.

In April 2012 the government then launched six pilot projects that put into practice the principles of biodiversity, which are due to run for two years, to evaluate whether an offset approach can address the shortcomings of the current system and achieve the ultimate win-win scenario: nature conservation as an integral part of development.

In September 2013, the government also issued a public consultation paper on options for biodiversity offsetting, including its preference for a voluntary system, with Parsons Brinckerhoff’s work for Network Rail’s Thameslink programme listed as a best practice example (see case study below). The government is currently reviewing the consultation responses and, following the evaluation of the pilots on offsetting, will issue a policy statement later this year.

What is biodiversity offsetting?

In the UK, biodiversity offsetting would only be applicable to land that has been approved for development, which means it does not apply to protected sites such as Sites of Special Scientific Interest (SSSIs) or National Nature Reserves (NNRs). In addition, vulnerable or irreplaceable habitats (such as ancient woodland) are also exempt from biodiversity offsetting, and legislation protecting wildlife and habitats overrides an offset approach.

But for sites approved for development, biodiversity offsetting would become one way to compensate for the unavoidable loss of biodiversity from development, which is a requirement under UK legislation and the National Planning Policy Framework 2012. It would form the last stage of the mitigation hierarchy (Figure 1) when all reasonable efforts have been made to avoid or reduce impacts on biodiversity. This means that developers go through stages of first avoiding biodiversity loss, for example by locating their development in a less sensitive area, and then minimising losses that cannot be avoided, such as reducing the amount of vegetation clearance on the site itself (see Figure 1).

Figure 1: Mitigation Hierarchy

(adapted from The Business and Biodiversity Offset Programme)

However, if there are losses that cannot be avoided or reduced, legislation and planning policy dictate that developers compensate for these losses to achieve no net loss as a minimum, and preferably a net gain. Biodiversity offsetting is a method of achieving this that the -government believes is more robust and cost-effective than the existing system of biodiversity compensation.

So what’s wrong with the existing system? Various guidelines exist on compensating for biodiversity loss. Typically, these involve creating like-for-like habitats offsite. However, there is no standardised process for calculating the amount of biodiversity lost or compensation needed, or identifying the location where compensation efforts will result in the greatest biodiversity benefit.

This lack of a standardised process has raised fears that the development system is failing to protect biodiversity. Which is why the government – in step with other governments around the world – is working towards biodiversity offsetting as an option when compensation is needed for unavoidable loss.

The key difference with offsetting is that it needs to show measurable outcomes that are sustained over time: the losses resulting from the impact of the development and the gains achieved through an offset are measured in the same way. Until recently, we could not robustly determine whether a development achieved a no net loss or a net gain. At the wider scale, the result has been a failure to halt biodiversity loss.  

How will biodiversity offsetting impact developments?

As explained above, biodiversity offsetting would not change existing requirements for developers to compensate for unavoidable loss of biodiversity, but it would make it easier to do so and result in greater benefits for the environment. Offsets can be provided either by the developers themselves, or they can use an offset provider. Developers can compensate for the unavoidable loss of biodiversity at a different location to their development site, but only if it meets certain criteria.

These criteria vary among countries but most governments, including the UK, have adopted the principles established by the Business and Biodiversity Offset Programme (BBOP), a US-based coalition of 75 companies, financial institutions, government agencies and civil society organisations working to develop best practice.

The principles include strict adherence to the mitigation hierarchy, limits on what can be offset (particularly irreplaceable habitat such as ancient woodland), and achieving “no net loss” as a minimum, though a net gain would be preferable. Adherence to BBOP’s principles is a safeguard against offsetting becoming “a licence to trash” culture, whereby developers immediately look to offset their impacts on biodiversity rather than first avoiding or reducing these impacts.

Measuring biodiversity

Measuring biodiversity is a significant step change in the protection and enhancement of biodiversity as part of development in the UK. The process allows non-experts to assess more easily how different choices impact biodiversity and whether harm can be avoided or reduced. In cases where harm cannot be avoided, numbers simplify the discussion between developers and statutory agencies on compensation for biodiversity loss.

For its pilot test on biodiversity offsetting, the UK government’s intention was to develop a simple yet robust metric to calculate “biodiversity units”. This metric is based on three variables: habitat distinctiveness, habitat condition, and habitat size. To calculate biodiversity units, a developer (or its consultant) first identifies all habitat types on a development site. For each habitat type, using government guidance, they determine whether the habitat is of low, medium, or high distinctiveness and then assess whether the condition is poor, moderate, or good. Each variable is scored, and all scores are multiplied to give the number of biodiversity units (see Table 1).

Table 1: Example of biodiversity offsetting calculations

Habitat type
Distinctiveness Condition Area (ha)
Biodiversity units
Broadleaved woodland
High (6)
Good (3) 5
6 x 3 x 5 = 90
Rail transport verge
Low (2)
Poor (1) 2.5 2 x 1 x 2.5 = 5
Lowland meadow
High (6) Moderate (2) 6
6 x 2 x 6 = 72

The units are units of biodiversity: they are not an attempt to put a price on biodiversity but to enable a comparison between losses and habitat creation. The cost of providing an offset will be calculated by the offset provider, on a case-by-case basis, depending on the conservation action they are taking.

The government’s pilot raised concerns in some quarters, and case studies from other countries do highlight failures. However, there are many other case studies that demonstrate successes if the right framework is in place.

For the government, introducing a measurement of biodiversity helps ensure that offsetting becomes a well-managed component of wider biodiversity conservation strategies, and helps to achieve the twin challenges of growing economies while enhancing and protecting the environment. For developers, measuring allows biodiversity to become a valuable asset to their sustainability portfolio.

Dr Julia Baker is a biodiversity specialist at Parsons Brinckerhoff


Thameslink's biodiversity offset creates a 'net positive' impact

An innovative biodiversity offsetting project is taking shape at Streatham Common in south London. The project is being led by the £4.6bn Thameslink programme, Network Rail’s major north-south rail project in and around London, in partnership with the London Wildlife Trust, London Borough of Lambeth and Parsons Brinckerhoff.

The programme aims to do more than just mitigate biodiversity losses associated with construction, by delivering the project with a permanent “net positive” biodiversity impact.

“This is the first Network Rail project to commit to a net gain in biodiversity,” says Amelia Woodley, Thameslink environment manager. “Once we determined it was possible to go beyond a ‘no net loss’ target, our goal was to leave more than we take away.”

Loss of open land in some areas along the rail corridor was unavoidable, as was the case with woodland near Selhurst Sidings south of London. This rail-locked wooded land was required to house the trains from London Bridge over night to enable the demolition of London Bridge station – a critical and major project milestone.

“We retain as much of the green railway network as possible,” Woodley says. “When that is not feasible, as a last resort we will look at off-site locations where we can provide better biodiversity opportunities.”

Owen Paterson (centre) launched Thameslink’s biodiversity offset drive in December 2013

The outcome of this process has initiated a major habitat restoration programme for Streatham Common. Once a part of the Great North Woods with a history dating to the 13th century, this forest is located close to Thameslink, ensuring that the offset delivers local benefits.

The first planting was held in March 2014, when an estimated 8,000 native species of trees, shrubs, and other natural habitat were planted in carefully selected areas over 20 acres of Streatham Common. The project is about halfway completed, and a second planting will be held in November. Both plantings are public events that include participation from local volunteers.

Given the constraints on planting on railway land, Thamelink’s biodiversity offset at Streatham Common enables it to go beyond its planning requirements and achieve a net gain in biodiversity. Thameslink’s offset is enhancing biodiversity of the nature reserve at Streatham Common and, by doing so, adding to local residents’ enjoyment of this public park.

Typically, when a company embarks on a biodiversity offset project, it hires an environmental broker to locate and fund a qualifying project, but remains relatively uninvolved with the process. Thameslink’s approach was different. “Thameslink refused to go through that process, instead favouring a more hands-on partnership with local conservation organisations,” says Julia Baker, biodiversity specialist with Parsons Brinckerhoff. It was that genuine grassroots involvement, which Baker’s team guided Thameslink through, that set it apart from standard offset initiatives, according to Baker.

As much woodland as possible has been retained on the Thameslink project

“The government is currently pilot-testing biodiversity offsetting, although government can only do so much when it comes to the practical on-site implementation,” Baker says. “At Parsons Brinckerhoff we have developed an approach to ensure that biodiversity offsetting is undertaken appropriately and robustly with strict protocols and measures in place.”

Baker used the metric developed by the UK Department of Environment, Food, and Rural Affairs (Defra) to calculate biodiversity loss and the associated level of compensation needed. This enabled Parsons Brinckerhoff and Thameslink to work with their offset partners to find ways to surpass “no net loss” and produce the desired net positive impact.

By using the Defra metric, the project team was able to create numeric scores that helped quantify vague concepts, establish what needed to be added, and create new habitat to exceed the losses.

“Putting a number to biodiversity became a powerful engagement tool with senior executives of Thameslink,” she says. “The numbers clearly illustrated that we could achieve a net gain and they immediately committed to go above and beyond their planning requirements, then we took it from there.”

A demonstration project

The Thameslink biodiversity offset was officially launched by secretary of state for environment, food and rural affairs, Owen Paterson, in December 2013. It is now a Defra demonstration project with Streatham Common poised to become a prime example of how biodiversity losses from an economically important railway infrastructure upgrade can be leveraged into significant gains, for both wildlife and people.

“Nothing like this project existed before we could quantify biodiversity using the metric,” Woodley adds. “It’s been quite inspiring, finally being able to show these concepts through graphs, numbers, and percentages that are more easily understood by those within our business making decisions on both risks and opportunities.”

After planting at Streatham Common is finished, Woodley says London Wildlife Trust will continue to manage the offset for three years, after which management will be passed to Lambeth Council, which owns Streatham Common, thereby ensuring its long-term protection.

Click here to take the online test paper for July/August 2014

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