As the Environment Bill progresses through its early stages in Parliament, Defra has published its economic impact assessment of the biodiversity net gain as set out in Part 6 of the bill.

The Bill sets out the government’s approach to securing net gains for biodiversity through the planning system and having considered a number of options and consulted widely on the issue, Defra has decided to opt for a mandatory tariff system using a biodiversity metric. Put simply, the government is mandating that all development (with a few exceptions) will be required, through the new bill, to secure 10% gains in biodiversity. The loss or gain must be calculated using the Defra Biodiversity Metric which is currently in its 2.0 beta form. The metric calculates the loss of biodiversity that any development may cause based on the area of habitat lost, the output expressed in ‘biodiversity units’. The metric then takes into account any mitigation measures (for example, onsite habitat creation) and gives an overall net loss or gain for the development. Where there is a net loss (and because of the way the metric works this will be the case for most developments) it will be mandatory for developers to pay a tariff to balance any deficit plus 10% of the baseline value.

Normally the impact assessment (IA) of new wildlife law amounts to a few paragraphs at the end of the bill usually stating that the economic effects of the bill are benign and of little consequence. It is therefore an indication of the potential game changing nature of the bill that this report runs to 80 pages.

The IA concludes an indicative cost of £11,000 per biodiversity unit. It is envisaged that local markets will develop for the cost of delivering biodiversity units with the administration falling to the Local Planning Authorities. The IA also concludes that the costs will be passed down to landowners and that the impact upon the development industry will be small.

The Bill was due to have its second reading on October 28th and there is of course significant doubt about how quickly the Bill will progress. However, Local Planning Authorities are already drafting policies to reflect the 10% net gain requirement and referring to the Defra metric. Baker Consultants has been using the metric on many projects recently and the spread-sheet is still full of bugs (if you are using it check the calculations very carefully). To be fair Natural England has been very quick a correcting the bugs once they have been identified.

Mandating biodiversity gain is firmly on the political agenda and if the Bill does progress further this is set to be a significant piece of legislation with far reaching consequences.

The Impact Assessment is available to download here Net Gain Impact Assessment