SESSION 4 The Environment Bank Ltd. Delivering biodiversity offsetting through an independent broker. Guy Duke Director Europe & Research

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1 SESSION 4 The Environment Bank Ltd. Delivering biodiversity offsetting through an independent broker Guy Duke Director Europe & Research

2 The Environment Bank Ltd Private company working to broker biodiversity offsetting agreements for both developers and landowners Calculates residual environmental impact of development proposals using government approved metrics Matches developers offset requirements with sites put forward by landowners and conservation groups who have credits available to sell Not a habitat bank but an offset broker Registers potential offset sites on trading platform Legal and fiscal systems assure planning authorities that offsets have een arrnged independently and delivery will be overseen and guaranteed in the long-term

3 How can brokers enable offsetting? Accurate, consistent and independent calculation Supply that meets demand Assurance of long-term delivery

4 Benefits for planning authorities Transparent, consistent and auditable demonstration of no net loss sustainable decisions Removes compliance monitoring needs but retains decision making locus and enforcement capability Removes obligations but increases accountability But only if there is assurance on quality of both process and delivery

5 Benefits for developers Reduces planning delays and consultancy costs - greater clarity, predictability and consistency Long-term liability for management discharged Transparent delivery of sustainable development But only if they can buy their credits efficiently i.e. developers need certainty & speed

6 Benefits for landowners Pays for long-term conservation management of land at a price they set Guaranteed long-term payments No administrative complications But only if they can sell their credits i.e. landowners need an effective way of selling their credits

7 Benefits for conservation Environmental value accounted for in all planning decisions Financial disincentives to habitat destruction Drives up on-site mitigation standards Mainstreams land management value Enables long-term and large-scale habitat conservation

8 What s needed to make it work? Policy framework Consistent process metrics applied consistently (without conflicts of interest) Effective market demand and supply i.e. right receptor site (right habitat type, right size, right place, right time, right price) Long-term delivery

9 Essex offsetting strategy

10 Warwickshire strategic areas To target restoration and creation of new core areas

11 Case study example - development Biodiversity value of existing 12.96ha site = units Biodiversity value of the proposed development = units Biodiversity Offset units = units Large areas of low value habitats, but significant impact due to small areas of mitigation to allow development to meet housing need.

12 Case study example - development Biodiversity value of existing 5.10ha site = units Biodiversity value of proposed development = units Biodiversity Offset units = units Scheme amended to retain and enhance best existing habitats to reduce biodiversity loss.

13 Case study example - provider Existing Units Existing biodiversity value of 4.1ha Species Poor Grassland = 8.2 units (4.1ha) Existing biodiversity value of 10.4ha Poor Semi-improved Grassland = 41.6 units Potential Credits To enhance the Species Poor Grassland to Semi-improved Grassland in 10 years would generate 5.86 credits gain. To enhance the species-poor Semi-improved Grassland to species-rich Semi-improved Grassland in 10 years would generate 9.90 credits gain The Total Grassland units available on the site = credits

14 Land supply - receptor sites Habitat creation or restoration Credit calculations reflect the difference between the baseline and target habitat condition Multipliers applied Delivery risk Years to target condition Spatial risk Like-for-like and trading up Land managers set price of credits

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16 Long term delivery

17 How do brokers enable biodiversity Only brokers provide: offsetting? Consistent and independent calculation Supply that meets demand Assurance of long-term delivery Reduced transaction costs

18 Offsetting myths Undermines existing protection Encourages loss of important wildlife sites Green tax on development Cost for developers Costly to run Creates another industry

19 Some key messages ADVANTAGES FOR THE ENVIRONMENT proper accounting of both environmental impact and environmental gain both on- and off-site (through use of approved metric) Encourages greater on-site mitigation and avoidance - because if you have to pay to compensate then you do your best to avoid that gives financial disincentives to build on wildlife sites - because if you have to pay to do so, then you'll go looking for other places to build [i.e. the opposite of a 'license to trash ) 'mainstreaming' the financial value of habitat creation - creating a market where NGOs and farmers are properly paid to create habitat up to 7b pa in Europe! allowing lots of small developmental impacts to be joined together to produce large-scale habitat creation schemes. OFFSETTING ALSO ALLOWS: quantifiable and accountable corporate investment in habitat creation schemes the potential for biodiversity to be 'stacked' in PES schemes transparent and accountable delivery of NNL through good planning decisions quicker processes through planning - reduced delays for developers transparent delivery of NNL for developers (and Government infrastructure projects)

20 Biodiversity offsetting htttps://environmentbank.mmearth.com