Biodiversity Offsetting in the UK: A Change for the Better?

As sustainable development and more sustainable approaches have become an integral part of the construction industry, the need to quantify results concerning environmental issues, such as waste and carbon reduction, has grown. Effective management requires measurement, and environmental concerns were given a “number.”

In the United Kingdom (UK), however, biodiversity (Box 1 on the following page) never got a “number” for quantification. This was partly because there was no universal measurement for biodiversity that could be easily adopted, given the complexities of measuring diverse and dynamic ecosystems. Consequently, biodiversity reports continued to be about “the potential of a site for dormice” and “the probability of great crested newts”. However, how we communicate biodiversity as part of a development will change if the UK government introduces the biodiversity offsetting proposal that they outlined in the 2011 Natural Environment White Paper, The Natural Choice: Securing the Value of Nature.

What is Biodiversity Offsetting?

Biodiversity offsetting is a way to compensate for the unavoidable loss of biodiversity from development. It is the last stage of the mitigation hierarchy (Box 2) when all reasonable efforts have been made to avoid or reduce impacts on biodiversity. This means that developers go through stages of first avoiding biodiversity loss, for example, by locating their development in a less sensitive area, and then minimising losses that cannot be avoided, such as reducing the amount of vegetation clearance. However, if there are losses that cannot be avoided or reduced, planning policy and legislation dictate that developers compensate for these losses. Biodiversity offsetting is a way to do this that the UK government thinks is more robust and cost-effective than the existing system of biodiversity compensation.

Why Biodiversity Offsetting?

“£1 million spent on one great crested newt!” This and other similar headlines in the media have highlighted the blockages to development that can arise from poor management of biodiversity issues. But even with developers investing in wildlife boxes or efforts to move slow worms out of a construction site, the existing system of biodiversity compensation has widely been recognised to have failed in ensuring “no net loss” of biodiversity. Things need to change. The system needs to be more efficient to save developers time and money, and more effective to protect and enhance biodiversity. The question is whether biodiversity offsetting can achieve the necessary win-win.

How Does Biodiversity Offsetting Work?

Developers can compensate for the unavoidable loss of biodiversity at a different location to their development site if their offset meets certain criteria. These criteria vary among countries but most governments, including the UK, have adopted the principles established by the Business and Biodiversity Offset Programme (BBOP) (Box 3). These principles include strict adherence to the mitigation hierarchy, limits on what can be offset (particularly irreplaceable habitat such as ancient woodland), and achieving “no net loss” as a minimum, though a net gain would be preferable. Adherence to BBOP’s principles is a safeguard against offsetting becoming “a licence to trash”1 culture, whereby developers immediately look to offset their impacts on biodiversity rather than first avoiding or reducing these impacts.

Why Opt for Biodiversity Offsetting?

A key criterion, and one that makes biodiversity offsetting different from other forms of compensation, is the formal requirement to measure both the unavoidable loss of biodiversity and the compensation that will be gained. This measurement of biodiversity is the very reason why offsetting has the potential to make significant positive change.

Ten Reasons Why People Love Numbers

It is generally recognised that a headline with numbers will yield more reader traffic than a headline without (all else being equal). So a blog entitled “Ten Reasons Why People Love Numbers” will receive more readership than a blog entitled “Why People Love Numbers.” So why do people love numbers? Some argue that numbers are the most universal form of language. But more than that, numbers provide structure and organisation, which makes for easier reading and understanding of a concept. Numbers also quantify knowledge, adding a level of precision and detail that gets attention.

Using Numbers to Conserve Biodiversity and Grow the Economy

Given these advantages of quantification, assigning a number to biodiversity is a significant step for the UK to achieve the win-win scenario of a growing economy and a thriving environment. Quantifying biodiversity allows non-experts to assess more easily how different choices impact biodiversity and whether harm can be avoided or reduced. In cases where harm cannot be avoided, numbers simplify the discussion between developers and statutory agencies on compensation for biodiversity loss, as developerscan demonstrate a “no net loss” or a net gain more robustly and with greater transparency. Streamlining communications saves time and money for all involved and reduces uncertainty for developers, enabling them to benefit from reduced risk to their capital and improved information flow. Developers might or might not use offsetting but, given the business benefits from quantifying biodiversity, they are more likely to formally commit to a “no net loss” or a net gain. This commitment provides a vital foundation for the environment-win development-win scenario. With so much to be gained from quantifying biodiversity, how biodiversity is measured is therefore critical.

Measuring Biodiversity

There are many ways to measure biodiversity. For its pilot test on biodiversity offsetting, the UK government’s intention was to develop a simple yet robust metric to calculate “biodiversity units.” This metric2 is based on three variables: habitat distinctiveness, habitat condition, and habitat size. To calculate biodiversity units, a developer (or their consultant) first identifies all habitat types on a development site. For each habitat type, using UK government guidance, they determine whether the habitat is of low, medium, or high distinctiveness and then assess whether the condition is poor, moderate, or good. Each variable is scored, and all scores are multiplied to give the number of biodiversity units. See Box 4 for an example.

There is much debate about whether this metric accurately represents the true value of biodiversity for the environment, society, and the economy. Some argue that omitting wildlife is a critical flaw, while others support this habitat-based metric, because the existing legislation to protect wildlife overrides offsetting and because it focuses offsetting on habitat creation or enhancement rather than a narrow species-specific approach.

Next Steps

In September 2013, the UK government issued a public consultation3 paper on options for biodiversity offsetting including its preference for a voluntary system, with Parsons Brinckerhoff’s work for Network Rail’s Thameslink Programme listed as a best practice example. The UK government aims to release a policy statement in late 2013 [Note: this article was written in November 2013 and published in December 2013] and other countries are making similar advances. The Swedish government is reviewing possibilities for a national policy on biodiversity offsetting, the European Commission is developing plans to mandate offsetting for its member states, progress to adopt offsetting in Asia continues, and there is increasing interest from developing countries to establish a formal offset system. All of these countries can learn lessons from the original pioneers of biodiversity offsetting, notably the United States and Australia. This is important to ensure that offsetting makes a positive change as a carefully constructed and well managed component of a wider biodiversity conservation strategy, and that putting a number on biodiversity helps to achieve the twin challenges facing many nations of growing the economy and enhancing the environment.


  1. POSTNOTE (2011) Biodiversity Offsetting. Number 369. UK Houses of Parliament, Parliamentary Office of Science and Technology.
  2. HM Government Department of Rural and Farming Affairs 2012 Biodiversity Offsetting: guidance for developers.

  3. Department of Environment Food and Rural Affairs (2013) Biodiversity offsetting in England. Green Paper. UK Government.


Image Header Source: Dave Rogers