Government's biodiversity offsetting proposals are "too simplistic", MPs warn

The Environmental Audit Committee (EAC) said that, if properly implemented, 'biodiversity offsetting' had the potential to enhance the way the planning system accounts for the damage done to natural habitats by new building work. However, it concluded that the proposals set out in a Government green paper did not properly reflect the values of different types of habitat or even the year-round biodiversity of single sites.

"Many witnesses to the inquiry were concerned that the Government's proposal would allow offsetting to be applied to ancient woodland and Sites of Special Scientific Interest," said committee chair Joan Walley. "There is a danger that an overly simplistic offsetting system would not protect these long-established ecosystems."

"The assessment process currently proposed by the Government appears to be little more than a 20 minute box-ticking exercise that is simply not adequate to assess a site's year-round biodiversity. If a 20 minute assessment was carried out in a British wood in winter, for instance, it would be easy to overlook many of the migratory birds that may use it as a habitat in summer," she said.

In March, the Ecosystems Market Task Force recommended the creation of a UK biodiversity offsetting scheme as a means of tackling biodiversity loss while encouraging  development that is necessary for economic growth. The Task Force, chaired by Ian Cheshire of Kingfisher and featuring a number of business leaders, was set up by the Government to identify opportunities for UK businesses to develop green goods and services.

A consultation on Defra's green paper, setting out how such a biodiversity offsetting scheme could work, has recently closed. Defra based its proposals on six trials of a voluntary approach to offsetting through the planning system, which are running in England until April 2014, and on various international approaches. The pilots use an offsetting 'metric' which allows impacts on nature to be quantified in standard 'biodiversity units', but which would be updated to reflect different species and improve the way it assesses habitat condition before being used more widely.

The offsetting pilots are voluntary, and according to the EAC have not been well subscribed. In its report, it concludes that any future biodiversity offsetting scheme should be mandatory in order to "encourage a market to develop". However, it adds that the case for a mandatory system has "not yet been made" and that more analysis of the pilots would be needed before any meaningful conclusions could be drawn about the benefits of offsetting. For this reason, the pilots should be "allowed to run their course and then be subjected to the independent evaluation previously promised by ministers" before the Government takes a final decision about whether to proceed.

"The Government should exercise some caution about this because the pilots need to be rigorously and independently assessed first to make sure all the lessons are properly taken on board," committee chair Joan Walley said. "The Government will need to be sure that the poor take-up wasn't a result of weaknesses in the offsetting scheme design."