Achieving biodiversity net gain by addressing governance gaps underpinning ecological compensation policies

Biodiversity compensation policies have emerged around the world to address the ecological harms of infrastructure expansion, but historically compliance is weak. The Westminster government is introducing a requirement that new infrastructure developments in England demonstrate they achieve a biodiversity net gain (BNG). We sought to determine the magnitude of the effects of governance gaps and regulator capacity constraints on the policy's potential biodiversity impacts. We collated BNG information from all new major developments across six early-adopter councils from 2020 to 2022. We quantified the proportion of the biodiversity outcomes promised under BNG at risk of noncompliance, explored the variation in strategies used to meet developers' biodiversity liabilities, and quantified the occurrence of simple errors in the biodiversity metric calculations. For large developments and energy infrastructure, biodiversity liabilities frequently met within the projects' development footprint. For small developments, the purchase of offsets was most common. We estimated that 27% of all biodiversity units fell into governance gaps that exposed them to a high risk of noncompliance because they were associated with better-condition habitats delivered on-site that were unlikely to be monitored or enforced. More robust governance mechanisms (e.g., practical mechanisms for monitoring and enforcement) would help ensure the delivery of this biodiversity on-site. Alternatively, more biodiversity gains could be delivered through off-site biodiversity offsetting. For the latter case, we estimated that the demand for offsets could rise by a factor of 4; this would substantially increase the financial contributions from developers for conservation activities on private land. Twenty-one percent of development applications contained a simple recurring error in their BNG calculations. One-half of these applications were approved by councils, which may indicate under-resourcing in council development assessments. Our findings demonstrate that resourcing and governance shortfalls risk undermining the policy's effectiveness.

Systematic nature positive markets

Environmental markets are a rapidly emerging tool to mobilize private funding to incentivize landholders to undertake more sustainable land management. How units of biodiversity in these markets are measured and subsequently traded creates key challenges ecologically and economically because it determines whether environmental markets can deliver net gains in biodiversity and efficiently lower the costs of conservation. We developed and tested a metric for such markets based on the well-established principle of irreplaceability from systematic conservation planning. Irreplaceability as a metric avoids the limitations of like-for-like trading and allows one to capture the multidimensional nature of ecosystems (e.g., habitats, species, ecosystem functioning) and simultaneously achieve cost-effective, land-manager-led investments in conservation. Using an integrated ecological modeling approach, we tested whether using irreplaceability as a metric is more ecologically and economically beneficial than the simpler biodiversity offset metrics typically used in net gain and no-net-loss policies. Using irreplaceability ensured no net loss, or even net gain, of biodiversity depending on the targets chosen. Other metrics did not provide the same assurances and, depending on the flexibility with which biodiversity targets can be achieved, and how they overlap with development pressure, were less efficient. Irreplaceability reduced the costs of offsetting to developers and the costs of ecological restoration to society. Integrating economic data and systematic conservation planning approaches would therefore assure land managers they were being fairly rewarded for the opportunity costs of conservation and transparently incentivize the most ecologically and economically efficient investments in nature recovery.