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Monetising Biodiversity – How Civity can help find opportunities for landowners and developers.

(Last Updated 25th October 2023)  The enactment of the Environment Act 2021 has been delayed until January 2024 nevertheless, there will be a legal obligation to ensure the destruction of biodiversity caused by development is minimised, and through construction, the site is left in a better state than before.  The law demands a Biodiversity Net Gain (BNG) of 10%. If this cannot be found on site, it must be found offsite, preferably as near as possible.  Meanwhile, many landowners will have suitable land that developers will be looking for and, possibly, not aware how the new law values it. So, this is an opportunity to make an income from land that may previously have been thought to have little financial value.    The situation prompts questions from both developers and landowners:   How is a site’s biodiversity measured?   How is a site’s biodiversity value monetised? How do you value habitats? It starts with a valuation of the land in biodiversity terms, using a metric known as Defra Metric 4.0 and expressed as biodiversity units. The valuation can only be made by experienced, qualified ecologists. The metric was created by the government for the benefit of developers, landowners, local planning authorities, professional advisors, contractors and others. The valuation depends on:   The distinctiveness of the habitat:   The location:   Its quality:   The richness and/or variety of the wildlife:   The extent of the area. The developer. The valuation of the development site will take into account the loss of habitats as well as mitigating factors that could reduce the biodiversity deficit, such as improvements to habitats remaining in the site before and after construction. The gross loss or gain of the value in biodiversity units, plus the net 10% gain, is the figure necessary for approval by the Local Planning Authority (or Responsible Body) before seeking planning permission. In order to meet BNG’s mandatory demands, developers will have to search for the necessary ‘biodiversity units’ and subsequently buy them. It is at this stage that the monetisation takes place. However, before the developer translates the deal in financial terms, he faces some more hurdles: The type of habitat affected by his development must be replaced like-for-like or better. This means the search for qualifying land has to be more focused and, therefore, possibly harder and longer to find depending on the type and quality of the habitats degraded by the development. Within the BNG law, the further the compensating land is from the development site, the greater the cost in biodiversity units. Put another way, the cost is proportional to the distance. It is called the “Spatial Risk Multiplier” (link to Glossary). The value of biodiversity units is subject to market forces so it might be hard to budget for. For hard and fast financial values of biodiversity units, the government offers ‘Biodiversity credits’ (Link to Glossary). Their financial value is fixed, expensive and only to be used as a last resort. When the developer finds the right type of land, he also needs to meet the cost of its maintenance to BNG standards for 30 years. Unless there is a shortcut …   The shortcut. Fortunately, there is a faster, easier way: land brokers, like Civity, have biodiversity units to sell; Civity also has the connections to find specific types of land if required. It’s more economic than ‘do-it-yourself’. The company is privately owned and headed up by an ecologist. Biodiversity units sold by Civity absolve the buyer/developer of any responsibility for the habitat’s future preservation, improvement and maintenance.   The landowner. The landowner, or long lease holder, looking over his estate may recognise woodlands or riverbanks as habitats to all kind of species that have prospered for centuries, nevertheless unaware of the financial benefit that lies therein. To be helpful, The Department of the Environment for Rural Affairs (DEFRA) and Natural England have defined 35 habitat types across the coasts and landscapes of England. The habitats are divided into five grades of distinctiveness: Low, Medium, High, Linear and Watercourses. An overview of these divisions is shown below. Within each distinctiveness there are subdivisions: Broad and Specific. For example, within the Medium sector there is ‘sparsely vegetated land’ is said to be broad whilst ‘inland rock and scree’ is specific. 35 habitat types The ‘Tiers’ are indicators of value. So, A1 has the lowest value and A5 the highest. ‘Linear’ refers to hedgerows that can be rich in wildlife, likewise ‘Watercourses’. However, hedgerows usually have A1 values whilst rivers and streams are typically A2 to A5. Below, we list Defra’s types of habitats and their places in the hierarchy.   LOW –Scrub land of common biodiversity.   MEDIUM – Heath & scrub, grassland, individual trees, urban land, cropland, wood and forest, intertidal and sediment, lakes and ponds.   HIGH – Wetland, grassland, heath & scrub, urban, woodland/forest, intertidal, wetland mosaic sediment, ponds, coastal lagoons, rocky shore, littoral rock, saltmarsh/saline reedbed, littoral seagrass, coastal saltmarsh, coastal sand dunes, coastal vegetated shingle, maritime cliffs & slopes, inland rock outcrops, scree habitats, upland mixed ashwoods, native pine woodlands, lowland pine woodlands, lowland mixed deciduous woodland, upland oakwood, high alkalinity lakes, marl lakes, moderate alkalinity lakes, peat lakes, reservoirs, inland rock & scree.   LINEAR – Hedgerows.   WATERCOURSES – Rivers, streams.   Note: duplication is due the variations of quality, richness and location of the habitat, Statutory Credits The government deliberately wants the biodiversity unit marketplace to be privately led, however should a private agreement not be possible developers can, as a last resort apply to purchase Statutory Credits. These credits are deliberately expensive, but they give a good benchmark as a relative indicator of unit prices.    As a guide to the relative value of sterling, go to the Government’s website here but remember the prices quoted only apply in extremis.   Landowners may find the value of Statutory Credits quite interesting, not because of the quoted value but as confirmation that habitats are worth a lot more than previously thought. If you have land that might qualify, you have the option of selling it or leasing it for 30 years at a price related to market value. You will need a qualified ecologist to help you. Subject to an ecological survey, Civity will be happy to lease (or buy) the land from you and take over the stringent BNG obligations:   protecting and enhancing the habitats contained within it   paying you for its maintenance if you wish   AND allowing you access for the whole period of the lease   The minimum area for disposal must be 10 hectares but not necessarily in one plot. Help is on hand. It is a fact of life that the country needs more houses; there is also an imperative to preserve our shrinking environment for the future health and welfare of our people. Biodiversity Net gain is both a redemption and a guardian that sees fair play in this dichotomy. If you need help as a developer, or as a landowner, talk to Civity; we understand both sides of the equation and can be of great practical help. Civity Net Gain Exchange. Click here.

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How to get your Biodiversity Net Gain plan approved

How to Achieve Biodiversity Net Gain and Get Your Plan Approved

(Last Updated 12th September 2023)  Developers have known about Biodiversity Net Gain (BNG) for some time. So, they will know that, from this coming November, with only a very few exceptions, planning applications will only be granted on proof that their development site can show a minimum biodiversity net gain of 10% over the biodiversity value of the land before work starts.  Many developers have already prepared for this, but many more have not. The Environmental Act 2021 becomes law in November 2023, when Biodiversity Net Gain becomes mandatory.  First, let’s start by answering a fundamental question: How do you measure biodiversity? The answer is Metric 4.0, a standard of measurement developed by Natural England and used by developers, local authorities, landowners, stakeholders, land banks and brokers, professional advisors, and government departments with responsibility for England’s environment.  So, if you are not ready now, what can you do about it? When should you start to prepare? What is involved and from whom can you get help?  How do you start? As a developer, you will know that between the purchase of a site and the completed development, there are many fences to leap, one of them being planning permission. From November 2023, there is another fence: Biodiversity Net Gain, a mandated pre-condition for the granting of planning permission. In other words, an approved BNG plan is an essential preliminary to getting planning permission. You cannot gain planning permission without a BNG plan; there is no shortcut. A BNG Plan A BNG plan involves a great amount of detail unique to a particular project so, only the broadest brush sketch is possible. It is important to understand an approved plan will take time, money and professional help to put together. Here are the basic ingredients required: A biodiversity survey of your site before work starts to value the habitat in terms of type (woodland, meadow, riverbank, heath etc), extent, location, environmental richness and condition. An experienced, qualified ecologist must complete surveys. Ecology by Design can help here. A projection of the biodiversity value of the development site after completion. The result of the survey(s) will determine what, in detail, is needed to meet the target biodiversity gain of 10%. Some of the biodiversity loss may be achieved on-site by mitigating some, or all, of the degradation caused by the development. This could help reduce the target net gain. Your BNG plan will further set out how you will achieve the target:   Local planning authorities like to see a like-for-like biodiversity type being replaced either on-site or off-site.  Where the replacement habitats will be, the distance from your development site, their type, richness, rarity, physical state etc. How will the habitats be maintained or improved over a period of 30 years? who will be responsible for their management Mitigation Hierarchy. Your BNG plan may show that there is scope to achieve some, if not all, of the loss of biodiversity. A mitigation hierarchy is a necessary discipline to minimise the offset value needed to achieve a 10% Gain. So, following the biodiversity survey, you need to look at how to avoid the damage; then find ways and means to minimise that damage; then restore as much of the damage as possible before establishing the value of the offset required to reach the 10% gain. Offsetting Biodiversity offsets are defined as the measurable conservation outcomes of a developer’s actions to compensate for their project’s biodiversity impacts. It is seen as the last step in the mitigation hierarchy and a useful discipline to establish the optimum value of their projects. Finding biodiversity units. Where do you look for compensatory biodiversity? Your professional advisers may have some ideas. The local authority in whose area your site is located will advise you or have units to sell. If you know of a landowner, land agent, ecologist (Ecology by Design) or a land broker (such as Civity), you will get help. They will tell you where and how you can buy the biodiversity credits you need. Biodiversity Credits. These credits are the units of value for a registered parcel of land containing various types and conditions of habitat. However, the price you pay for each credit will vary considerably, dependent on factors such as: The type of habitat required: ‘Broad’ (ie – grassland, wetland) and ‘Specific’ (ie -orchards, reedbeds). Every type of habitat has a notional value. The rarity or richness of the species living there. The physical condition of the habitat. The distance between the location of the habitat and your site; The value decreases with distance (Spatial Risk Multiplier). The seller: are you prepared to pay the offer price? The government has introduced its own price guide called Statutory Credits. These are very much a last resort and nearly always cost double the stated values because of the Spatial Risk Multiplier. However, straight financial compensation is sometimes acceptable to LPAs who use the money to fund ecology projects of their own. Biodiversity Credits can be bought from landowners, land agents, land banks (such as Civity) local authorities and, if all else fails, the government.  Responsible bodies. You will know that the grant of planning permission is usually a matter for the LPA. However, a consultee may be a Responsible Bodies, which consists of an assembly of individuals and/or corporate establishments. When submitting to a Responsible Body, you should take into account that their views may be wider and more ecologically-based than the LPA by virtue of its constituent members. This may influence the focus and style of your BNG plan application. Start sooner than later.  Assuming you have a site that you plan to develop at some stage, start the BNG process sooner rather than later. The LPA approval process is not quick, your application will go thorough several stages of diligent checks (ecological, legal, local, conservation covenants and national planning). Once the LPA approved your BNG plan in principle, you must secure the biodiversity credits, show how the habitat will be managed for 30 years (in some circumstances, Civity will assume the task). When you and your advisors are satisfied your plan is complete, submit it for final approval.   Now you know what is involved, make sure you allow enough time for you to initiate the searches, assemble all the data, put forward the application and get it approved BEFORE you seek planning permission. Help is at hand As we said, the process involved in getting approval for a BNG plan is dependent on so many factors – geography, ecology, opportunity – the best way to understand what you need to do is talk to us. We will listen to you and tailor-make suggestions how you start your BNG plan. There is no obligation. In the first instance, email for an appointment. We will respond immediately.

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