Habitat banking: Get your nature credits here

The Environment Bank is a private company set up to deliver biodiversity gain through 'biodiversity offsetting'. Offsetting is supported by the UK Government - it was a key policy initiative in the government's 2011 Natural Environment White Paper and six government pilots are testing how it will work. The Environment Bank is a lead partner on two such pilots, in Essex and Warwickshire. Here's how it works:

1. A Local Planning Authority agrees with the developer that planning consent can be conditioned with biodiversity offsetting. 
2. The residual environmental impact of the proposed development is calculated using government metrics that assess habitat type, condition and area.
   
3. The developer is left with, for instance, '15 grassland credits' that need to be bought to offset the impact of the development and satisfy the planning condition. 
4. Elsewhere, a farmer or conservation NGO land manager has submitted to the registry (the Environmental Markets Exchange) a long-term management plan that will, if funded, deliver biodiversity gain of 15 credits.
   
5. When the two – developers needs and land manager's offers – are matched, then credits are bought and sold and money passes into the system to fund long-term conservation management.

The Environment Bank admits that some habitats are simply not 'recreatable'.  Habitats such as peatlands or ancient woodlands, cannot be recreated by man (at least not within a lifetime) – for these habitats one cannot 'offset' damage in one place by creating habitat in another. However, they see it as a partial solution to a planning system is failing to protect biodiversity, since the wildlife value of land is often ignored or, at best, underestimated.