Human survival depends on nature yet economic growth is destroying ecosystems and biodiversity. Should we put a price on nature?

Putting a price on nature isn’t a new idea. In Natural Capital: Valuing the Planet, Sir Dieter Helm measures and values natural capital in terms of nature’s renewable and non-renewable resources. Helm acknowledges that human survival and wellbeing depend on protecting and restoring biodiversity and ecosystems, and proposes a framework for sustainable economic growth that is politically and economically viable. It makes no sense to judge a thriving economy on GDP alone and ignore the impact of economic growth on natural assets. The Dasgupta Review: The Economics of Biodiversity says we need to account fully for our interactions with nature if we want to stop the overexploitation of natural resources, the decline in biodiversity, and the destruction of ecosystems we depend on.

Human actions have consequences for nature

You only need to look at past examples of human impact on nature. Take the historic draining of peatlands to make way for forestry, which has deprived us of vital habitats for wildlife, water retention, and carbon sequestration; the grazing of excessive numbers of sheep on the same areas of land, which has dramatically reduced the variety of flora and fauna; and the building of industrial-scale chicken farms in Gloucestershire, which has turned the River Wye into a dead zone.  

Sir David Attenborough’s foreword on the Dasgupta Review is a sobering reflection on modern livestock farming:

“Today, we ourselves, together with the livestock we rear for food, constitute 96% of the mass of all mammals on the planet. Only 4% is everything else – from elephants to badgers, from moose to monkeys. And 70% of all birds alive at this moment are poultry – mostly chickens for us to eat. We are destroying biodiversity.”

The Review points out that we don’t all experience resource scarcity in the same way. Communities living subsistence lifestyles are impacted by natural resource shortages. In the UK, air and water pollution may be more noticeable or the disruption to food and energy supply chains. Regardless, environmental problems affect us all, with land-use change and species exploitation being major causes.

Paying the price of land development

Surprisingly, even though 55% of global GDP relies on what nature provides, the cost of doing business isn’t being paid. But this is set to change in the planning and development sector later this year when biodiversity net gain (BNG) becomes mandatory under the Environment Act (2021). With the aim of ensuring developers pay the cost of nature loss, most developments in England will need to achieve a minimum 10% net gain to receive planning permission. Biodiversity at the development site will be measured in ‘biodiversity units’ calculated using a biodiversity metric, taking into account the extent, condition, distinctiveness, and location of the habitat.

How does biodiversity net gain (BNG) work?

Developers must either avoid natural habitat loss on land they plan to develop or compensate for the loss. They can do this by creating new habitat on the development site itself or off-site on land they own, or by buying units from land managers or statutory credits from the UK Government. Land managers, including landowners, farmers, local authorities, and habitat bank operators, can sell off-site biodiversity units to developers, either directly or indirectly.

BNG will create a market where ‘biodiversity units’ are bought and sold to deliver outcomes for nature and support economic growth. The sale price of BNG units will cover the following: management of enhanced habitat for at least 30 years; monitoring and reporting; ecologist costs, legal fees and insurance; and remedial work if the habitat fails to achieve the agreed condition.

Local planning authorities (LPAs) will need to approve a proposed development’s biodiversity net gain plan before work can start. Local authorities can even use their own land to deliver BNG, providing necessary requirements are met and conflicts of interest managed (a risky placement of trust perhaps).

Natural England supports BNG to tackle biodiversity loss

Marian Spain, Chief Executive of Natural England believes “Biodiversity net gain offers a new route for development of homes, businesses, and infrastructure to play its part in enabling nature to thrive, and to deliver nature-based solutions to climate change, water and air quality and flood risks. It can also help level up access to nature and provide accessible green space on the doorstep of new homes and further afield.” BNG has economic benefits, says Natural England in terms of long-term income opportunities for landowners, sustainable financing for habitat management, and job creation.

Will the promises of BNG be kept and who will check?

But not everyone is so optimistic. Researcher Sophus zu Ermgassen shared their concerns about BNG with the British Ecological Society: “Our net gain database shows that the vast majority of the benefits of net gain, as it stands, are being delivered through promises of small, high-quality habitats many years in the future, within the development footprint. If these promises of improved future condition within the built environment do not materialise in reality, then net gain might be associated with a considerable loss of greenspace which might actually harm nature overall.”

Developers must be held accountable for any failures to deliver the habitats they have committed to, says Sophus, which will require monitoring and enforcement. This is usually carried out by LPAs, but they often lack the expertise and funds. Furthermore, the Chartered Institute of Ecology and Environmental Management (CIEEM) stresses that to ensure sustainable BNG, soils on a site must be suitable for the habitat that is to be created or translocated. 

Sophus also says habitat assessments must be robust to ensure biodiversity at proposed development sites is not undervalued. Bearing out this concern, a report commissioned by The Wildlife Trusts reveals shortcomings in the way HS2 Ltd assessed the value of nature along the construction route. Watercourses, ponds and trees were left out and mature species-rich hedgerows were given a lower value than the new hedgerows HS2 Ltd will plant.

Will biodiversity net gain deliver thriving wild places?

Referring to HS2, Craig Bennett, chief executive of The Wildlife Trusts, expressed the importance of local places to local people and the impact of their destruction. “This vast infrastructure project is taking a wrecking-ball to wildlife and communities are in despair at losing the wild places – the woods, meadows and wetlands that they love – they will never get these back.” Sophus proposes that BNG is achieved by improving local nature networks and not just through on-site landscaping, which may deliver less biodiversity benefit.

Ready-made habitat in a box?

With the opportunity for businesses like BioScapes to facilitate on-site BNG, Sophus’ concerns are understandable. Developed by horticulturists and ecologists, BioScapes portable pods provide self-contained habitats to support biodiversity. This may be an easy solution for developers, but how do BioScapes units compare to more natural on-site and off-site habitats for biodiversity? Another issue is what protection existing trees or newly planted trees on site have after the developer has left. How many complaints by residents about leaves or shade would it take before trees on new housing estates are heavily pruned or removed altogether?

Is biodiversity net gain too limited in its audit process?

Then there’s the question of the scope of biodiversity net gain. Dieter Helm thinks BNG’s focus is too narrow and should include soil: “Biodiversity is not limited to above-ground bats, bees, birds and newts, important though all of these are”. To accurately calculate compensation for development, Helm would like to see carbon as well as biodiversity audits conducted for a site before development, and these compared to the economically most efficient option for the use of the land. Otherwise, there is an incentive for anyone seeking planning permission to degrade the land, leaving little biodiversity to compensate for.

This hot topic of the economics of nature was debated in a Curlew Action webinar recently, relevant not only to curlew conservation but nature conservation more widely. Guests discussed the practical and moral challenges and the benefits of putting a price on nature.

Curlew Action Chair of Trustees Roger Morgan-Grenville chaired the debate. Having helped with headstarting where the cost of each curlew released is £1100, he asked how we should measure value when a headstarted curlew is taken by a fox the same day. The answer may rest on whether we view nature as having only extrinsic value, a worth determined by humans, or whether we also consider nature’s intrinsic value, a worth in its own right.

Nature conservation needs wider investment

Professor David Hill, a founding member of Natural England, would prefer not to put a price on nature but believes a love for nature is not enough to make a difference. Hill says we need corporations to invest in biodiversity to fill the funding gap, which will only happen if they see value for their business. To address his concerns about provisions for wildlife in the planning and development sector, Hill introduced the concept of Biodiversity Net Gain (BNG) to the UK and set up The Environment Bank. Hill says that LPAs have no interest or capacity to account for biodiversity, so we need to make it economically visible.

Habitat Banks help developers meet BNG requirements

The Environment Bank aims to create high-quality ‘Habitat Banks’ to give developers an easy, risk-free way to meet BNG requirements by purchasing BNG units. Habitat Banks are created on land unsuitable for food production and where there is a significant opportunity for biodiversity uplift. These newly created habitats will include species-rich grassland, woodland, wetland, mixed scrub, or rewilded areas. Habitat Banks also provide landowners with an opportunity to diversify their business, which could offer a lifeline to farmers without EU subsidies post-Brexit.

Although BNG prioritises mitigation and uplift on development sites, it usually fails, says the Environment Bank. Local authorities don’t have the capacity to monitor habitats post-development, whereas the Environment Bank takes responsibility for monitoring for 30 years. Developers make a profit, farmers make a profit, so why shouldn’t there be profit in nature restoration, asks Hill.

Shouldn’t we value nature for its own sake?

Aside from natural capital, what about the value of nature for its own sake and the psychological and emotional benefits to humans? Joining the Curlew Action debate, philosopher John O’Neill, professor of political economy at the University of Manchester, is critical of placing an extrinsic value on nature because it ignores the intrinsic value. A curlew has value in itself, independent of its contribution to human wellbeing, says O’Neill. Concerned by the current economic growth model and ongoing biodiversity loss, he asks if this loss is simply due to a lack of funds for conservation. O’Neill is sceptical about “shifting bits of nature” via BNG and would like to see a shift in thinking, with development stopped in certain places.

What about the loss of nature to local people?

O’Neill says BNG creates a dependence because biodiversity gain in one area is dependent on loss in another. Off-site gains may not be like-for-like in terms of the habitat and wildlife lost on the development site. Furthermore, BNG does not make up for the loss of a special place for local people. How nature makes us feel matters. If nature loss in cities is near working-class areas, people have a lot to lose if they cannot travel to experience nature. There is no individual or community justice if biodiversity gains are elsewhere, and environmental losses often can’t be compensated for, says O’Neill. Whereas Hill favours mitigation of development, O’Neill would like to see restraint: a new service station on a motorway that destroys woodland is not a necessity.

Another way to fund nature restoration aside from biodiversity net gain was shared by Xanthe Caldecott. Founder of Green The UK, Xanthe explained they connect local nature projects with local businesses, helping them achieve their Corporate Social Responsibility (CSR) goals by funding local wildlife projects rather than the more usual climate-related carbon offset projects.

Will BNG validate destructive developments?

There are certainly challenges ahead in implementing BNG. We have witnessed countless examples of mature or even ancient trees felled or at risk of felling for developments, including ancient trees for HS2, mature trees for Plymouth city centre redevelopment, Coton Orchard for the Cambourne to Cambridge busway, and woodland with maternal roosts of rare bats in the Wensum Valley for the Norwich Western Link. Saplings are not a replacement for mature trees in terms of carbon capture, the life forms they support above and below ground, and their value to local people.

However, without an economic value for nature and buy-in from government and business sectors, nature conservation is likely to be limited in scale and longevity. As land ownership for nature conservation becomes profitable, we can only hope that ethical landowners, farmers, and businesses lead the way and that the BNG market will not be subject to the fraud seen in the carbon credit market and the greenwashing in CSR claims. We need a guarantee too that biodiversity net gain will be monitored and enforced for the 30-year period, otherwise, we will be poorer for this well-intentioned attempt to put a price on nature.  

Also published in the North East Norfolk Bird Club digital newsletter for members (May 2023). 

Images: Tracy Brighten