Conservation Banking

A brighter future for quarrying in the UK

By Dr. Brian Briggs and Professor David Hill of The Environment Bank Ltd

Developers in general, and quarry operators in particular, are finding it more difficult to obtain permission to extract minerals as the planning process becomes increasingly complex and, some would say, frustrating. This is occurring at a time when the Government wants to see an unprecedented level of house building (regardless of the acute problems arising from the current credit crunch).

But has anyone considered where the minerals will come from to deliver this development? Ironically, the biggest issues tend to arise from environmental constraints, despite the fact that many of the most valuable wildlife sites are the direct result of historical quarrying activities, eg the Cotswold Water Park, the South West London Waterbodies SPA, the Lee Valley SPA etc. Moreover, wetlands have recently been highlighted in the UK’s Wetland Vision as a priority habitat for restoration all around the UK. Not only are wetlands rich in wildlife, but they also provide a number of essential ecosystem services, including flood alleviation and water purification, as well as being one of the most popular habitats for human recreation and enjoyment.

The recent launch by Natural England of the Report on the State of the Natural Environment makes for grim reading. Large-scale declines in biodiversity and landscape have occurred through a range of land uses, and development pressure, which has been greater in the past 15 years than ever before, has played a significant part. But the adversarial approaches to development planning continue to exacerbate the problem when, in fact, biodiversity and landscape conservation, together with the other ecosystem services that land provides, could be provisioned by a proper engagement with the development industry.

Quarry operators, in general, are keener now than at any time in the past to demonstrate their commitment to environmental issues, and a number of recent schemes have clearly illustrated that, with the right management and design, mineral workings can develop into rich sites for nature over just a few years (see fig. 1.). So why do they meet so much resistance?

Clearly, in some instances, gravel deposits do not make suitable sites for extraction because they lie below existing designated wildlife sites or other important semi-natural habitats. However, many proposed quarrying locations are on degraded habitats or farmland, which could be restored to a higher quality for wildlife and recreation when extraction is complete.

Such plans can be held up by the process of agreeing the detail over mitigation schemes requested within the site boundary that, in the end, do not deliver and are not monitored.  Minerals companies argue that there is too much of a delay between the submission of the planning application, commencement of works, and the eventual ecological restoration. Well-intentioned plans are watered down during the process and no-one, least of all wildlife, benefits.

Fortunately, there is a solution to this in the form of a process known as ‘conservation banking’. By creating or restoring habitats elsewhere, it is possible to provide attractive conditions for habitats and species of conservation interest ‘in advance’ of the mineral extraction taking place, thereby removing both of the main obstacles to planning permission.   Such a process would also result in significant gains for biodiversity, and, with careful siting, could help to link up existing nature reserves into larger, more coherent networks, which will be vitally important if many native species are to survive the effects of climate change. Bigger nature reserves also provide more opportunities for public recreation, with all the associated health benefits that entails. In theory, quarrying companies could compensate for the impacts of multiple quarries, leading to huge economies of scale not only ecologically, but also in expertise, financing, administration and management. Some of the numerous potential advantages of conservation banking are listed in table 1.

Conservation banking has been working  fairly well in the US for the past 20 years and there is now a large number of ‘banks’ that facilitate the creation and ‘in perpetuity’ management of land for biodiversity conservation, landscape and other ecosystem services. Support for conservation banking in the EU, potentially similar to that operating in the US, at the level of environmental policy development, has been growing rapidly, defined as the restoration, creation or enhancement of habitats for the purpose of providing compensation for development impacts. The approach needs to be flexible, bringing together landowners, ecologists, consultants, planners and developers.

There is huge potential to make better use of the UK planning system to deliver proper compensation for development that is required. The Environment Bank Ltd are the first company to pilot and promote the conservation banking concept in the UK, and they expect it to become standard practice within a few years. Nick Herbert of the Conservative Party is now advocating the use of ‘bio-banks’, and it seems only a matter of time before a conservation banking policy is put into place.

A key difference from the previous mitigation process is that the developer would be released from the physical task of providing on-site compensation in many circumstances, allowing something of much greater value to be created and managed by professional ecologists and conservation organizations. A type of Planning Gain Supplement (eg through the much-talked about and highly relevant Community Infrastructure Levy), as outlined in the recent Barker Review, could provide one funding stream for such schemes. Quarry operators would generally have an advantage over other developers because they are often landowners and could provide the land for the conservation bank to use.

Two proposed models for conservation banking in the UK

A. The Regional Bank
Conservation banking could work very effectively at the scale of the region (which might go down to the scale of borough or district) by pooling compensation credits from multiple local developments, including those from quarrying, new housing and businesses. Environmental impacts would most commonly affect terrestrial or mixed terrestrial/aquatic habitats, and compensation would typically be required because of the existence of protected species on development sites. Since the size of these developments would generally be relatively small, conservation banking would be hugely advantageous in terms of economies of scale and could result in one or a few flagship nature reserves within the region, which as well as providing a valuable natural habitat, could become a resource used by local people for recreation and education. Since quarrying often results in the creation of wetland sites, such a model could also help fund the UK’s 50-year Wetland Vision, recently launched (July 2008) by government and NGO partners.

The model would work best if a conservation banking organization were to make a long-term (eg 10-year) agreement with the local authority to the effect that all developments with an unavoidable environmental impact would be compensated for by that organization. The site(s) purchased and habitats created/restored would be determined by the locally important habitats and species likely to be affected by developments in the area. Given the likelihood of much housing-related compensation relating to protected species such as newts, reptiles and bats, the bank could be principally designed with these in mind. Regular monitoring of these species would take place before, during and post restoration to determine the success of the bank.

Development proposals affecting habitats that cannot be recreated effectively would be rejected or relocated at the outset. Any approved developments affecting Natura 2000 sites, or unusual habitats not held in the ‘bank’, would need to be compensated for on an individual basis through the existing Article 6 assessment process (see model B below). The whole process would be overseen by a Conservation Banking Working Group and all practical works carried out in conjunction with the NGO sector (eg the Wildlife Trust or a conservation organization such as the RSPB or WWT), which would also act as quality control (for example, through independent species and habitat monitoring) working with the bank. Once restoration is complete, they could take over the ongoing management of the reserve, the costs of which would be incorporated into the price of compensation credits discharged by the bank. Alternatively, the conservation banking company could retain ownership of the land and charge a small rent for it to be managed by the NGO sector or equivalent with the relevant expertise.

The siting of the compensation habitat would aim to connect existing nature reserves in the region where possible. At the scale considered in this model, conservation banks would provide a visible and accessible amenity, and a clear public perception of replacement of valued natural resources. They would be unlikely to encounter problems relating to the ecological incompatibility of sites, and would also avoid any political and administrative problems arising from habitats being recreated outside set regional boundaries.

B. The SPA/SAC Wetland Bank
The EU Habitats Directive 92/43/EEC (implemented under UK law through the Habitats Regulations 1994) requires that the condition of individual SPA and SAC sites be maintained, as well as the coherence of the Natura 2000 network as a whole. Compensation will be required for any development impacting on a Natura 2000 site which is approved for imperative reasons of over-riding public interest. It is unlikely that compensation for such a development could take place either in situ or across the Natura network, hence the use of off-site compensation, ie conservation banking, offers an attractive possible alternative. A high proportion of the UK SPA and SAC sites are wetlands, which is the habitat type that can be most effectively and rapidly recreated.

Given the scale and more dispersed nature of many of the developments that have the potential to negatively impact protected Natura 2000 habitats, in this model conservation banks would function most effectively for individual (or very few) developments, so that they could be tailored to the specific requirements of the project. Even for individual developments, the use of a conservation banking organization would offer a number of advantages: the habitat restoration/creation work would be undertaken by suitably qualified professional ecologists rather than developers (resulting in higher-quality habitats), permit processing times would be reduced, the developer would be released from the task of providing compensation, costs of compensation would be pre-defined, and the site would be managed for wildlife (and visitors if appropriate) in the long-term. Interest in and influence over the compensation land by the developer would cease on the purchase of credits.

Conservation banks should be located close to the proposed development site, and preferably directly contiguous. However, if it was not possible to find or secure a suitable location for compensatory habitat in the immediate vicinity, there is nothing in the Habitats Directive to prevent the search from being widened further, subject to the point of ‘coherence’. If the proposal relates to a site designated for a population of a particular species (as is often the case for SPAs), this ‘coherence point’ may be very close by, since the bank will need to function as replacement habitat for use by that same population. Alternatively, ‘coherence’ could also be maintained by creating an area of habitat sufficiently large and attractive to support internationally important numbers in its own right.

Since, in this model, conservation banks would generally compensate for isolated development projects, the advantage of economy of scale is diminished. For this reason, and because the affected site may not be returned to a favourable condition, the scale of compensatory measures should be increased, for example by increasing the ratio of habitat created to habitat lost. Inevitably, every development will involve a large number of ecological, practical and social considerations, thus the precise level of compensation will need to be decided on a case-by-case basis.

Conclusion

In recent years, the public have become more aware of the value of the natural environment as a whole, particularly due to carbon and climate change issues, since habitats provide not only food, fuel and tourism, but also a vast range of vital ‘ecosystem services’. These services are the processes by which the environment produces resources such as clean air, water, and other goods, and they have huge economic value.

With increasing concerns over the loss of biodiversity and a greater appreciation of the importance of natural areas for human well-being, there is likely to be a trend towards compensation being required for impacts to habitats and species, including those not currently listed for statutory protection but that do nevertheless contribute to the nation’s biodiversity and landscape quality.

The Environment Bank have been progressing a novel solution to allow developments such as quarrying to yield substantial gains for the natural environment – something everyone wants. By brokering arrangements between developers, landowners and planning authorities in appropriate locations, it is possible to assimilate large funds for the creation and management of habitats at a landscape scale, providing an abundance of new and interesting places in the countryside for people to visit, supporting greater biodiversity, sustaining soils and water, and making the landscape attractive again. The developer would be released from the physical task of providing on-site compensation in many circumstances, allowing something of much greater value to be created and managed by professional ecologists and conservation organizations.

Conservation banking offers a more robust, consistent and independent delivery mechanism to ensure that further biodiversity degradation in the countryside is avoided and that the road to recovery of the UK’s wildlife is assured. The Environment Bank would urge the Mineral Products Association to seek agreement from the authorities to use conservation banking within their mineral extraction operations to sit alongside the planning application, for the sake of developers, conservationists, and planners alike.

The Environment Bank was set up to facilitate the delivery of mitigation and compensation schemes associated with planned development via ‘conservation banking’ – a concept developed in the US as a means of achieving no net loss of habitats and species. It is the first company of its kind in the UK, and aims to take the concept one step further, to deliver gains for both biodiversity and people. For further information visit: www.environmentbank.com.

Table 1

• It contributes to an overall zero net loss of habitat or protected species.
• Temporal losses of habitat can be avoided (credits are put in place in advance of debits).
• Restoration is consolidated into large areas. From a conservation biology perspective, larger    contiguous habitats are more valuable than the same acreage of habitat in a more dispersed spatial distribution. Small islands of habitat are also more vulnerable to edge effects, and require a disproportionate effort of management in order to maintain their ecological interest. From a human perspective, larger reserves give more potential to combine recreational usage with wildlife conservation.
• Economies of scale are achieved in restoration/enhancement, expertise, financing, management/monitoring.
• Habitat restoration/creation is undertaken by suitably qualified professional ecologists rather than developers, resulting in higher-quality habitats at lower cost.
• Permit processing times are reduced, and developers are released from the task of providing on-site compensation.
• Compensation costs are pre-defined. Developers are far happier with a known cost predicted for the term of a compensation project because they can roll this cost in as capital at the beginning of a scheme. By contrast, they dislike uncertainty that can lead to escalating costs and no exit strategy.
• It provides an effective mechanism for linking existing habitat patches into more coherent ecological networks.
• It provides a mechanism to integrate conservation into the investment plans of companies and into development planning at a time of growing pressure for resource development.
• It provides a significant new source of finance for biodiversity and landscape conservation.
• It leads to better relationships between developers, companies, local communities, government regulators, environmental groups and other important stakeholders.
• Landowners can benefit by using schemes as a means of diversification.
• Large schemes can cover their own income streams over time, by, for example, making landscapes more accessible to a wider range of people and attracting visitors.
• Larger compensation schemes, particularly those involving endangered species and incorporating public access, receive more public support.
• Schemes with public access can benefit human health and well-being.