Supporting the Elaboration of the Impact Assessment for a ......Ecosystem Services Final Report...

Supporting the Elaboration of the Impact Assessment for a Future EU Initiative on

No Net Loss of Biodiversity and Ecosystem Services

Final Report

ENV.B.2/SER/2014/0018

April 2016

The Institute for European Environmental Policy (IEEP)

in collaboration with Biotope, eftec and ICF

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Institute for European Environmental Policy (IEEP)

London office: 11 Belgrave Road London SW1V 1RB United Kingdom Brussels Office: Quai au Foin, 55 Hooikaai 55 1000 Brussels Belgium Contact person: Graham Tucker 11 Belgrave Road London SW1V 1RB, UK United Kingdom Email: [email protected]

The Institute for European Environmental Policy (IEEP) is an independent, not for profit institute dedicated to advancing an environmentally sustainable Europe through policy analysis, development and dissemination. Based in London and

Brussels, the Institute’s main focus of research is on the development, implementation and evaluation of EU policies of environmental significance,

including agriculture, biodiversity, climate and energy, fisheries, industrial policy, regional development, transport, waste and water.

See www.ieep.eu for further details

http://www.ieep.e/

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Authorship The recommended citation for the whole report is: Tucker G M, Dickie I, McNeil D, Rayment M, ten Brink P and Underwood E (2016) Supporting the Elaboration of the Impact Assessment for a Future EU Initiative on No Net Loss of Biodiversity and Ecosystem Services. Report to the European Commission. Institute for European Environmental Policy, London.

Recommend citation for the Germany case study: Wende W, Darbi M and Stein C (2016). Evidence of the costs of offsetting in Germany, in G M Tucker, I Dickie, D McNeil, M Rayment, P ten Brink and E Underwood. Supporting the Elaboration of the Impact Assessment for a Future EU Initiative on No Net Loss of Biodiversity and Ecosystem Services, pp 351-363. Report to the European Commission. Institute for European Environmental Policy, London.

Recommend citation for the offsetting in France case study: Quétier F, Malapert A and Vaissière A C (2016). Evidence of the costs of offsetting in France, in G M Tucker, I Dickie, D McNeil, M Rayment, P ten Brink and E Underwood. Supporting the Elaboration of the Impact Assessment for a Future EU Initiative on No Net Loss of Biodiversity and Ecosystem Services, pp 364-370. Report to the European Commission. Institute for European Environmental Policy, London.

Additional contributions and comments were provided by: Kaley Hart and Marianne Kettunen (IEEP), Mavourneen Conway (ICF) and Phil Cryle and Erin Gianferrara (eftec). Alejandro Colsa (IEEP) carried out the editing and proof reading of the final manuscript.

Disclaimer

The authors have full responsibility for the content of this report, and the conclusions, recommendations and opinions presented in this report reflect those of the consultants, and do not necessarily reflect the opinion of the Commission.

Acknowledgements

The French and German case studies relied on information from a large number of consultees, and we are therefore particularly grateful to all of them for their assistance.

We also thank the European Commission for comments on working documents and drafts of this report, in particular from the Inter-service Working Group on the Impact Assessment. Hans Lopatta provided information on the Environmental Liability Directive. We are especially grateful to the project desk officers, Patrick Murphy and Rayka Hauser, at DG Environment, who provided valuable guidance through the study contract.

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Contents

LIST OF ACRONYMS ...........................................................................................................7

EXECUTIVE SUMMARY ......................................................................................................8

1 BACKGROUND TO THE STUDY .................................................................................. 14

1.1 The EU biodiversity target and No Net Loss initiative ................................. 14

1.2 The NNL Working Group and NNL Policy Options Study ............................. 16

2 THE AIMS OF THE CONTRACT ................................................................................... 23

2.1 Overall aims.............................................................................................. 23

2.2 Specific tasks ............................................................................................ 26

3 REVIEW AND REFINEMENT OF POLICY OPTIONS ....................................................... 27

3.1 Approach to the selection of policy measures ........................................... 27

3.2 Selection of individual policy measures ..................................................... 28

4 IMPACT ASSESSMENT METHODOLOGY .................................................................... 35

4.1 Overview: Instruments and Assessment Criteria ........................................ 35

4.2 Analysis steps and communicating the impacts ......................................... 38

4.3 Aggregation across instruments ................................................................ 47

5 IMPACTS OF NNL MEASURES: THE BIRDS AND HABITATS DIRECTIVES ....................... 52

5.1 Part 1: Overview of retained policy options ............................................... 52

5.2 Part 2: Identification and assessment of impacts ....................................... 59

5.3 Part 3: Synthesis ....................................................................................... 76

6 IMPACTS OF NNL MEASURES: THE ENVIRONMENTAL LIABILITY DIRECTIVE ............... 82

6.1 Part 1: Overview of retained policy options ............................................... 82

6.2 Part 2: Identification and assessment of impacts ....................................... 88

6.3 Part 3: Synthesis ....................................................................................... 96

7 IMPACTS OF NNL MEASURES: ENVIRONMENTAL IMPACT ASSESSMENT ................. 103

7.1 Part 1: Overview of the retained policy options ....................................... 103

7.2 Part 2: Identification and assessment of impacts ..................................... 110

7.3 Part 3: Synthesis ..................................................................................... 117

8 IMPACTS OF NNL MEASURES: STRATEGIC ENVIRONMENTAL ASSESSMENT ............. 123

8.1 Part 1: Overview of retained policy options ............................................. 123


8.3 Part 3: Synthesis ..................................................................................... 143

9 IMPACTS OF NNL MEASURES: SPATIAL PLANNING................................................. 149



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9.3 Part 3: Synthesis ..................................................................................... 164

10 IMPACTS OF NNL MEASURES: BIODIVERSITY PROOFING ........................................ 170



10.3 Part 3: Synthesis ..................................................................................... 178

11 IMPACTS OF NNL MEASURES: COMMON AGRICULTURAL POLICY ........................... 183



11.3 Part 3: Synthesis ..................................................................................... 198

12 IMPACTS OF NNL MEASURES: FOREST POLICY ........................................................ 204



12.3 Part 3: Synthesis ..................................................................................... 218

13 IMPACTS OF NNL MEASURES: MARKET BASED INSTRUMENTS ................................ 224



13.3 Part 3: Synthesis ..................................................................................... 237

14 IMPACTS OF NNL MEASURES: OFFSETS .................................................................. 242



14.3 Part 3: Synthesis ..................................................................................... 278

15 SYNTHESIS OF IMPACTS ON THE NO NET LOSS OBJECTIVE ...................................... 284

15.1 Summary assessment of the individual NNL Measures and Instruments .. 284

15.2 Summary Assessment: Links and wider contributions of the NNL Measures 294

15.3 Conclusions, interpretation and next steps .............................................. 304

16 REFERENCES .......................................................................................................... 306

ANNEXES ...................................................................................................................... 321

ANNEX 1: ELD..................................................................................................... 321

ANNEX 2: DESCRIPTION OF MBIs AND THEIR LINKS TO POLICY INSTRUMENTS .... 330

ANNEX 3: OFFSETTING AMOUNTS AND COSTS UNDER OF2 ................................. 341

ANNEX 4: EVIDENCE OF THE COSTS OF OFFSETTING IN GERMANY ...................... 352

ANNEX 5: EVIDENCE OF THE COSTS OF OFFSETTING IN FRANCE .......................... 365

NNL Impact Assessment Support Study – Final Report

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LIST OF ACRONYMS BaU Business as Usual BBOP Business and Biodiversity Offsets Programme CAP Common Agricultural Policy CBD Convention on Biological Diversity CEF Connecting Europe Facility CEPF Confederation of European Forest Owners CFP Common Fisheries Policy CICES Common International Classification of Ecosystem Services EAFRD European Agricultural Fund for Rural Development EEA European Environment Agency EIA Environmental Impact Assessment EIP-AGRI European Innovation Partnership for Agricultural Productivity and

Sustainability ELD Environmental Liability Directive EMFF European Maritime and Fisheries Fund ENRD European Network for Rural Development ERDF European Regional Development Fund ESF European Social Fund ESIF European Structural and Investment Funds FAS Farm Advisory Service FISE Forest Information System for Europe FSC Forest Stewardship Council FTE Full-time equivalent FTE Full-time equivalent GAEC Good Agricultural and Environmental Condition HNV High nature value IA Impact assessment IAS Invasive Alien Species JRC Joint Research Centre LULUCF Land use, land-use change and forestry MBI Market based instrument MCPFE Ministerial Conference for the Protection of Forests in Europe MFF Multi-annual Financial Framework (with respect to the EU) MSFD Marine Strategy Framework Directive NCA Natural Capital Accounting NNL No Net Loss NNLWG No Net Loss Working Group NRN National Rural Network PAF Prioritised Action Frameworks PEFC Programme for the Endorsement of Forest Certification PES Payments for Ecosystem Services RDP Rural Development Programme SEA Strategic Environmental Assessment SFM Sustainable Forest Management WFD EU Water Framework Directive


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SUPPORTING THE ELABORATION OF THE IMPACT ASSESSMENT FOR A FUTURE EU INITIATIVE ON NO NET LOSS OF BIODIVERSITY AND ECOSYSTEM SERVICES

EXECUTIVE SUMMARY

The objectives of the study

The EU aims to halt biodiversity and ecosystem service loss by 2020, and has developed an EU Biodiversity Strategy to help achieve this headline target. Action 7 of the Strategy is to ‘ensure no net loss (NNL) of biodiversity and ecosystem services’, and Action 7b states that ‘the Commission will carry out further work with a view to proposing by 2015 an initiative to ensure there is NNL of ecosystems and their services (e.g. through compensation or offsetting schemes).’ To support this initiative the European Commission contracted a study on Policy Options for an EU No Net Loss Initiative1 (Tucker et al, 2014), which assessed the effectiveness and potential for existing EU policies to contribute to the NNL objective, and then identified a set of 30 EU policy options for achieving the NNL target. These measures addressed all stages of the mitigation hierarchy, and included options to improve existing policies and legislation as well as to fill gaps.

Although the general conclusions of the NNL Policy Options Study were clear, it was not within the scope of the study to undertake a sufficiently detailed and quantitative analysis to inform a formal policy Impact Assessment by the Commission. The purpose of the contracted study reported on here has therefore been to further support the Commission in sub-action 7b by providing information that can contribute to the elaboration of the Impact Assessment that will accompany the future NNL initiative. In particular, it has aimed to provide the Commission with a detailed assessment of the impacts of the options identified in the NNL Policy Options Study.

The reassessment and selection of policy options for analysis

The first task in this study was a reassessment of each policy option, as well as the four associated policy scenarios (i.e. increasingly ambitious packages of policies) and the Business as Usual (BaU) scenario that were included in the NNL Policy Options Study. This was necessary to take into account policy developments and legislative amendments, new information and the latest Commission Work Programme. The task firstly screened each of the individual policy options to establish if they remain relevant, feasible and realistic; and secondly, reassessed the coherence and feasibility of each of the policy scenarios. Policy options were excluded from further analysis if they were considered to be unlikely to be implementable before 2020 or if they were no longer considered to be appropriate according to new information. As a result, several CAP policy options that would require legislative changes were dropped as the 2014-2020 regulations have been finalised. Some other policy

1 Hereafter referred to as the NNL Policy Options Study


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options were modified so that they were no longer mandatory for Member States (e.g. biodiversity proofing).

Policy options on mandatory offsetting were also excluded from this study, because they would need an EU wide legal framework that would require preparatory actions that would take several years to carry out and could not therefore be in place before 2020. Furthermore, the results of the public consultation on the NNL initiative were taken into account and priority given to measures that aim to avoid and reduce impacts rather than offsetting residual impacts.

Some policy options have been largely implemented since the NNL Policy Options Study as a result of policy developments (e.g. the EIA reform and adoption of the Marine Spatial Planning Directive) and were therefore considered to be part of the BaU scenario for this study. Although it was not possible to revise the BaU modelling carried out in the previous study, the policy developments were taken into account through expert judgment where relevant.

As a result of the reassessment, the following 10 instruments and associated 18 specific policy options (incorporating some revisions) were taken forward for further analysis of their potential impacts2:

Birds and Habitats Directives

BHD 1: Improved and wider appropriate assessments and compensatory measures for unavoidable impacts, including improved metrics

BHD 2: Improve the implementation of Birds Directive Article 3 and Habitats Directive Articles 3 and 10 to maintain bird populations and the coherence of the Natura 2000 network

Environmental Liability Directive

ELD 1: Enhancement of the implementation of the Directive, through awareness raising, improved guidance and enforcement

ELD 2: Extension and clarification of damage significance threshold to reflect NNL biodiversity objectives

ELD 3: Extension of coverage of the Directive to include nationally threatened species

Environmental Impact Assessment (EIA)

EIA 3: Improve implementation of the EIAs through awareness raising and enforcement, especially for agriculture.

Strategic Environmental Assessment (SEA)

SEA 1: Improved implementation of SEA through capacity building and guidance.

SEA 2: Improvements to the SEA Directive, including improved screening criteria.

Spatial Planning

2 The codes refer to those used in the Policy Options Study


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SP 2: Promotion of best practice spatial planning by Member States.

Common Agricultural Policy (CAP)

CAP 1: Raise awareness amongst land managers about the importance of maintaining semi-natural habitats, with a particular focus on HNV farmland.

CAP 6: Encourage Member States to implement the EAFRD agri-environment-climate and forest-environment-climate measures (and other measures) in ways that deliver greater contributions towards NNL.

Policy measures to support forest biodiversity

FP 1: Encourage Member States to cooperate on a voluntary basis to develop a rigorous standardised accountable forest monitoring and evaluation system.

FP 2: Develop voluntary targets that contribute to NNL of biodiversity and ecosystems and promote their integration into relevant sustainable forest management strategies, programmes, plans, criteria, indicators, and monitoring and certification schemes.

Biodiversity Proofing

BP 1: Encourage Member States to ensure that the implementation of all EU funded projects, especially those related to regional policy, transport and energy, fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures.

Market Based Instruments (MBI)

MBI 1: EU guidance on the potential role of Market Based Instruments to deliver NNL.

MBI 2: Development of an EU ‘No Net Loss’ Label.

Offsetting

Of 1: EU Offsetting framework and implementation plan to promote agreed types of offsetting according to defined standards.

Of 2: EU Framework to promote offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem services.

The impact analysis methodology

This study primarily assessed the potential impacts of the policy options individually, as it was no longer considered appropriate to fix policy package scenarios in view of political and policy developments. However, the study also provides summaries of the policy options' potential impacts under each instrument in such a manner as to facilitate later assessments of combined impacts, should policy package scenarios become devised in the future. The synthesis chapter also provides a semi-quantitative overview of their potential total combined impacts.


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The policy options were assessed in against 16 criteria relating to:

Environmental issues: biodiversity and ecosystem service impacts, and the potential contribution of the measures to NNL.

Economic issues: administrative costs (at EU and Member State level), financial costs (one-off and recurrent) and opportunity costs.

Social issues: number/quality of jobs, health benefits/quality of life.

Governance issues: clarity, measurability, practicability/feasibility, enforceability and coherence with sustainable development and other policies.

Consideration was also given to the extent to which each policy option supports the mitigation hierarchy, and which stages of the hierarchy it contributes to. The study also briefly assessed how each policy option could contribute to four policy themes, which tie in with the stated priorities of the new Commission, namely: the subsidiarity principle; better implementation and better regulation (in accordance with the ‘smart regulation’ agenda); the provision of information and guidance for good governance; and maximising the added value of EU funding.

Where available data allowed, the focus of the assessments were on economic impacts. However, in accordance with impact assessment guidelines, the quantification of impacts concentrated on the policy options that have potentially the most significant impacts, particularly in terms of economic costs and benefits. The most detailed assessments of costs and benefits were therefore carried out for the measures related to the Birds and Habitats Directives and offsetting.

The assessments were carried out on the basis of a review of published information and other readily available data, and included two detailed case studies of offsetting costs in Germany and France (Annexes 4 and 5).

Conclusions

Notwithstanding the uncertainties connected with the technical and operating constraints associated with this type of prospective assessment, it can be reliably predicted that all of the instruments and policy options that were assessed have the potential to provide benefits for biodiversity and ecosystem services, and thereby contribute towards meeting the NNL objective. The exact range and magnitude of impacts from the NNL policy options will depend on their detailed design, the level of, and capacities for, their implementation and the combined synergies between these policy options and further EU and national policy developments. In particular there is considerable uncertainty over the potential take up of voluntary measures. Current government capacities and the need for investment in additional capacity and knowledge (e.g. in environmental authorities) may also affect the effectiveness and efficiency of several measures. Addressing data gaps (such as on the economic value of ecosystem services) would also improve the assessment of the measures.

There is a considerable range of potential benefits, ranging from minor to substantial. The largest and most certain benefits would be expected from the


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options related to legal instruments such as the Birds and Habitats Directives and EIA, and when in combination, the ELD and offsetting measures. The spatial planning and the biodiversity proofing options can be very effective in terms of avoiding and reducing biodiversity impacts, promoting policy coherence and supporting offsetting where needed to ensure NNL of biodiversity. The main caveats related to these current options arise from their voluntary nature and the uncertainty of their uptake.

The policy options would lead to a range of different types and scale of costs, from the arguably relatively minor (e.g. millions of Euro across the EU as a whole), expected for the ELD, CAP, spatial planning, MBI and biodiversity proofing measures, to quite substantial costs (hundreds of millions of Euro) expected for the Birds and Habitats and forest policy options. If taken up by Member States and implemented thoroughly according to good practice, the offsetting of residual impacts from EU funded development projects could lead to expenditure in the order of billions of Euros. However, the simple modelling carried out in this study and evidence from offsetting in France and Germany indicates that offsetting normally comprises a small percentage of total development costs. Moreover, evidence indicates that for all the measures, except under forest policy, the economic value of their benefits would be expected to be of the same order of magnitude or greater than their estimated potential recurring costs.

The social impacts of the policy options would be generally positive as they would improve the level of access to nature and recreation opportunities, as well as providing health benefits and, in all but one case (ELD), providing net increases in jobs. Overall, the set of policy options are would be expected to lead to substantial improvements in governance, though with some variations across options and instruments. Furthermore, all of the instruments and policy options have the potential to support the wider EU objectives for improved implementation, better regulation and increased EU added value (from policies and funds), as well as being sensitive to subsidiarity issues and the diversity of Member States’ contexts, practices and needs.

From an economic perspective, the options analysed in this study may have both negative (e.g. opportunity costs, restoration and offsetting costs, administrative burden) and positive impacts on investments. Some options such as the ELD, EIA, spatial planning, proofing and offsetting options have a significant potential to stimulate valuation and internalisation of biodiversity and, when properly implemented, could also instil clear rules, predictability and transparency in planning processes, help prevent delays and facilitate investments in economic activities and in green infrastructure and biodiversity.

Although all the instruments have their merits and would contribute to the NNL objectives, their potential added value vary considerably and therefore some can be considered to be a higher priority than others. Overall, the assessment suggests that four instruments in particular should be seen as particularly high priority: the Birds and Habitats Directive measures in combination with measures under the ELD, the EIA measure, the spatial planning and the offsetting measures. Moderate priority measures are the combined instrument options relating to SEA, the CAP, forest


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policy and MBIs. Spatial planning and biodiversity proofing options may have significant added value if, acknowledging that guidance and information does not deliver change by itself, they are combined with effective mechanisms to incentivise their uptake.

While the NNL policy options would offer significant incremental improvements, compared to the BaU scenario, EU biodiversity and ecosystem service losses would not be expected to be halted by the combined measures considered in this study. In order to fully achieve the NNL objective a wider range of post-2020 EU and national measures would therefore be needed. In particular, more ambitious measures would be required for forestry and agriculture (as part of the CAP reform) and biodiversity proofing, as the options considered here are largely voluntary and have limited scope. In accordance with the mitigation hierarchy, such measures should firstly aim to avoid and reduce biodiversity and ecosystem service impacts, but residual impacts would still be inevitable. Therefore, in the longer term mandatory offsetting with a wider scope than considered in this study (i.e. beyond development projects, so as to address agriculture, forestry and marine impacts) would be required to achieve the NNL objective.


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1 BACKGROUND TO THE STUDY

1.1 The EU biodiversity target and No Net Loss initiative

The conservation of biodiversity (i.e. ecosystems, species and genetic diversity) and associated ecosystem services is an important policy objective for the EU. After evaluating a previous unsuccessful attempt to halt biodiversity loss by 2010, the European Council adopted a new target in March 2010 to ‘halt biodiversity and ecosystem service loss by 2020, to restore ecosystems in so far as is feasible, and to step up the EU contribution to averting global biodiversity loss’. A longer term vision was also adopted: ‘By 2050, EU biodiversity and the ecosystem services it provides – its natural capital – are protected, valued and appropriately restored for biodiversity's intrinsic value and for their essential contribution to human wellbeing and economic prosperity, and so that catastrophic changes caused by the loss of biodiversity are avoided.’

To support the achievement of the EU targets (and CBD targets agreed in Nagoya in 2010), the Commission developed in cooperation with Member States, an EU Biodiversity Strategy to 20203

, which includes six sub-targets and 20 related actions. (see Box 1-1). An important driver of the development of the Strategy is recognition of the role of biodiversity in underpinning ecosystem services. Therefore it is considered to be “an integral part of the Europe 2020 Strategy4, and in particular the resource efficient flagship initiative”5. The Strategy is therefore expected to contribute to the European Union’s strategic objectives, including a more resource efficient economy, a more climate-resilient and low carbon economy, a leader in research and innovation, and the creation of jobs and business opportunities.

This study concerns Action 7, which is to ‘ensure no net loss (NNL) of biodiversity and ecosystem services’, in support of Target 2, which is that ‘By 2020, ecosystems and their services are maintained and enhanced by establishing Green Infrastructure and restoring at least 15% of degraded ecosystems’. More specifically, the focus is on Action 7b of the EU Biodiversity Strategy, which states that ‘the Commission will carry out further work with a view to proposing by 2015 an initiative to ensure there is NNL of ecosystems and their services (e.g. through compensation or offsetting schemes).’

3 Communication on our life insurance, our natural capital: an EU biodiversity strategy to 2020,

COM(2011) 244 final. Hereafter referred to as the “Biodiversity Strategy”. 4 Communication on Europe 2020: A strategy for smart, sustainable and inclusive growth,

COM(2010)2020. 5 A resource-efficient Europe – Flagship initiative under the Europe 2020 Strategy, COM(2011)21.


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Box 1-1. The EU 2020 Biodiversity Strategy targets

Target 1: To halt the deterioration in the status of all species and habitats covered by EU nature legislation and achieve a significant and measurable improvement in their status so that, by 2020, compared to current assessments: (i) 100% more habitat assessments and 50% more species assessments under the Habitats Directive show an improved conservation status; and (ii) 50% more species assessments under the Birds Directive show a secure or improved status.

Target 2: By 2020, ecosystems and their services are maintained and enhanced by establishing Green Infrastructure and restoring at least 15% of degraded ecosystems.

Target 3

A) Agriculture: By 2020, maximise areas under agriculture across grasslands, arable land and permanent crops that are covered by biodiversity-related measures under the CAP so as to ensure the conservation of biodiversity and to bring about a measurable improvement in the conservation status of species and habitats that depend on or are affected by agriculture and in the provision of ecosystem services as compared to the EU2010 Baseline, thus contributing to enhance sustainable management.

B) Forests: By 2020, Forest Management Plans or equivalent instruments, in line with Sustainable Forest Management (SFM)21, are in place for all forests that are publicly owned and for forest holdings above a certain size (to be defined by the Member States or regions and communicated in their Rural Development Programmes) that receive funding under the EU Rural Development Policy so as to bring about a measurable improvement in the conservation status of species and habitats that depend on or are affected by forestry and in the provision of related ecosystem services as compared to the EU 2010 Baseline.

Target 4: Fisheries: Achieve Maximum Sustainable Yield (MSY) by 2015. Achieve a population age and size distribution indicative of a healthy stock, through fisheries management with no significant adverse impacts on other stocks, species and ecosystems, in support of achieving Good Environmental Status by 2020, as required under the Marine Strategy Framework Directive.

Target 5: By 2020, Invasive Alien Species and their pathways are identified and prioritised, priority species are controlled or eradicated, and pathways are managed to prevent the introduction and establishment of new Invasive Alien Species (IAS).

Target 6: By 2020, the EU has stepped up its contribution to averting global biodiversity loss.

The intention to attain NNL of biodiversity and ecosystem services was further encouraged in a Council meeting in June 2011. In December 2011 Council agreed ‘that a common approach is needed for the implementation in the EU of the NNL principle and invited the Commission to address this as part of the preparation of its planned initiative on NNL by 2015, taking into account existing experience as well as the specificities of each Member State, on the basis of in-depth discussions with Member States and stakeholders regarding the clear definition, scope, operating principles and management and support instruments in the context of the common implementation framework of the Strategy'.


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In 20 April 20126, the European Parliament adopted a resolution urging the Commission to develop an effective regulatory framework based on the NNL initiative, taking into account the past experience of the Member States while also utilising the standards applied by the Business and Biodiversity Offsets Programme (BBOP).

The need for a NNL initiative is also referred to in the Resource Efficiency Roadmap, which calls for proposals to foster investments in natural capital, to seize the full growth and innovation potential of Green Infrastructure and the ‘restoration economy’ through a Communication on Green Infrastructure (2012) and a NNL initiative (2015).

1.2 The NNL Working Group and NNL Policy Options Study

To seek stakeholder views and advice on the NNL initiative, the Commission established a Working Group on NNL of Ecosystems and their Services (NNL Working Group). The objective of the Working Group was to collect views from Member State representatives, stakeholders and experts on the way forward for the NNL initiative announced for 2015, within the mandate of the 2011 December Council conclusions, taking into account all relevant policies and instruments. The Working Group completed its work in July 2013, with the production of reports on ‘Scope and objectives of the no net loss initiative’ (NNLWG, 2013a) and ‘Development of operational principles of any proposed EU no net loss initiative’ (NNLWG, 2013b) and a supporting glossary.

In addition it contracted a study on Policy Options for an EU No Net Loss Initiative, which aimed ‘to support the Commission in developing the NNL initiative foreseen in the EU Biodiversity Strategy to 2020 by developing potential alternative options for this initiative, and analysing their main impacts.’ The study was carried out by IEEP, eftec, ICF GHK and IVM and was completed in January 2014 (Tucker et al, 2014), and is hereafter referred to as the ‘NNL Policy Options Study’.

The study carried out the following tasks:

1. Developed a Business as Usual (BaU) scenario against which to evaluate alternative options. Based on a review of recent studies and some new modelling, this provided an overall indication of the most likely important impacts on biodiversity and ecosystem services under a BaU scenario; and hence helped to identify key gaps and inadequacies in the current environmental policy and legislative framework. It also developed indicators and metrics that were used later in the study to model the potential impacts of policy option scenarios.

6 http://ec.europa.eu/environment/nature/biodiversity/comm2006/pdf/EP_resolution_april2012.pdf


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2. Organised a stakeholder workshop, which gathered feedback on the initial results of the BaU scenario analysis and identified some potential policy options for consideration.

3. Developed policy options for implementing NNL goals. This firstly assessed the current effectiveness and potential for existing EU policies to contribute to the NNL objective, and then identified a set of EU options for achieving the NNL target. Measures across all stages of the mitigation hierarchy7 were considered and opportunities to improve existing policies and legislation or address policy gaps were identified. To avoid duplication with other initiatives and to maximise added value, the focus of the analysis was on offsetting8 and related policy measures that address residual impacts from developments and activities affecting the use of land or the sea. As part of the analysis, consideration was also given to the need for additional measures such as regulation, financing, governance change, research and other supporting actions, with the aim of selecting options that would achieve NNL as efficiently as possible.

4. Analysed the potential impacts of selected policy options (as summarised in Table 1-1). The effectiveness, efficiency and overall policy coherence of each identified policy option were assessed individually, using a standard set of criteria that were evaluated in relation to existing information (such as relevant published Commission impact assessments). The models used in the first task were then run again to quantify the potential 2020 impacts of four policy package scenarios reflecting increasing levels of policy ambition (with each scenario incorporating the policy options included in the former scenario):

A. Better enforcement and implementation of existing measures, and encouragement of voluntary offsetting.

B. New and enhanced measures to avoid and reduce impacts, and mandatory offsetting for residual impacts from EU funded developments.

C. Development of a policy framework with mandatory NNL objectives for scarce biodiversity and priority ecosystem services9 and minimum key standards for offsetting at the EU level.

7 A hierarchical procedure where appropriate actions are taken in the following order: avoidance,

reduction/minimisation and restoration/rehabilitation of impacts, and then offsetting of residual impacts. 8 Biodiversity offsets are measurable conservation outcomes resulting from actions designed to

compensate for significant residual adverse biodiversity impacts arising from project development after appropriate prevention and mitigation measures have been taken. 9 In this context scarce biodiversity and priority ecosystem services was defined as: all globally and

European threatened species as listed by the IUCN (whether protected under the Habitats and Birds Directive or not); all species of Community interest listed in the Habitats Directive and species listed in Annex I of the Bird Directive outside Natura 2000 sites (because impacts on these species are subject to mandatory compensation measures under Article 6.4 of the Habitats Directive); species and habitats identified as being a national conservation priority in national biodiversity strategies and


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D. Development of a policy framework for NNL with mandatory NNL objectives and key implementation standards for all biodiversity and ecosystem services.

5. Prepared recommendations, based on the results of the compiled evidence

and policy impact analysis, concerning the development of policies that would effectively achieve the NNL goals in the EU, whilst being efficient and consistent with other EU environmental objectives.

Table 1-1: Overall assessment of the potential effectiveness, efficiency and coherence of each policy option and scenario

Policy option Effectiveness

Biodiversity Ecosystem

Services Efficiency Coherence Comments

Scenario A Low-moderate Moderate Moderate

BHD 1: Improved and wider appropriate assessments and compensatory measures for unavoidable impacts

High Moderate -

High Moderate High

BHD 2: Improve the implementation of Birds Directive Article 3 and Habitats Directive Articles 3 and 10

Moderate Moderate High High


Low-Moderate

Variable Moderate High

Could link metrics to those used for biodiversity offsets, and other policies.


Moderate Variable Moderate High

EIA 3: Improve implementation of the EIAs through awareness raising and enforcement, especially for agriculture

Moderate - High

Moderate High High

SEA 1: Improved implementation of SEA through capacity building and guidance

Moderate Moderate High Moderate

SP 2: Promotion of best practice spatial planning by Member States

Moderate Moderate Moderate Moderate

CAP 1: Raise awareness amongst land managers about the importance of

Low-Moderate

Low-moderate

High High Low effectiveness by itself, but moderate if

action plans, red data books or similar official documents; habitats occurring within officially recognised Green Infrastructure protection zones or ecological networks; and ecosystems that occur within officially recognised areas that provide important ecosystem services.


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maintaining semi-natural habitats, with a particular focus on HNV farmland

supporting other policies


Moderate - High

(uncertain)

Moderate – High

(uncertain) Uncertain Moderate

Depends on Member State uptake. Efficiency uncertain, as it will depend on the resulting changes in use of specific measures

FP 1: Develop a rigorous standardised accountable forest monitoring and evaluation system

Moderate Moderate Moderate High

BP 1: Ensure all EU funds, especially those related to regional policy, transport and energy fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures

Moderate-high

Moderate - high

Variable High

This could have a more explicit NNL requirement, thereby linking to Of 2

Of 1: EU Offsetting framework and implementation plan to promote agreed types of offsetting according to defined standards

Low – High Low - High Low - High

Low - High options

Low by itself, high if linked to mandatory offsetting

MBI 1: EU guidance on the potential role of Market Based Instruments to deliver NNL

Low Low Moderate High

Scenario B Moderate Moderate Moderate


Moderate-High

Variable Moderate Moderate

EIA 1: Ensure key EIA reform proposals made by the Commission are adopted


These have now been adopted and MS must implement the revisions by May 2017

EIA 2: Wider future reforms of the EIA Directive


SEA 2: Improvements to the SEA Directive, including improved screening criteria

Moderate Moderate High Moderate

SP 1: Adoption and implementation of the proposed Marine Spatial Planning Directive

Moderate - High

Moderate - High

High High This has now been adopted. Supports SEA and EIA

SP3: Development of a Directive establishing a framework for terrestrial spatial planning

Moderate - High

Moderate - High

Moderate High Supports SEA and EIA

CAP 2: Include suitable indicators within the

Moderate Moderate High High


20




Monitoring and Evaluation Framework to allow progress to be evaluated against NNL objectives.

CAP 3: Encourage and support all Member States to put in place a system of mapping and recording of all semi-natural habitats and landscape features on agricultural land

Low-High (uncertain)

Low-High (uncertain)

Moderate Moderate

Depends on Member State uptake, if taken up, low effectiveness by itself, but high if supporting other policies

CAP 4:Encourage Member States to require all land holdings entering land management options under EAFRD to have an environment plan in place against which changes can be assessed, approved etc.

Low-Moderate (uncertain)

Low-moderate

(uncertain) High Moderate

As CAP 3, but impact in support of other policies only moderate

CAP 5: Encourage Member States to apply the Pillar 1 greening requirement for permanent grassland in a way that protects valuable semi-natural grasslands

High (uncertain)

High (uncertain)

High Moderate

Depends on Member State uptake, possibly some declines in provisioning services

CAP 7: Include ‘preservation of semi-natural habitats, including semi-natural grassland, peatlands, wetlands [others]’ in the cross-compliance framework as a GAEC standard as an alternative to CAP Option 4.

Moderate –High

Moderate - High

High Moderate-

high

High benefits if linked to maps (CAP 3). Impacts would be post 2020

SD 1: Adoption of the proposed Soil Directive

Moderate (uncertain)

High (uncertain

Moderate High

This has now been withdrawn by the Commission but impacts would have been post 2020.

FP 2: Include targets that contribute to NNL of biodiversity and ecosystem within Sustainable Forest Management in the new EU Forest Strategy

Moderate - High

(uncertain)

Moderate (uncertain)

Moderate High

Depends on Member State uptake and interpretation of SFM

Of 2: EU Framework with mandatory offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem services

Low - moderate

Low – moderate

(uncertain) Moderate High Difficult to quantify

MBI 2: Development of an EU ‘No Net Loss’ Label

Low Low Moderate High Could support other voluntary initiatives, e.g. Of 1

Scenario C High High High

Of 3: Mandatory requirements to offset significant losses of scarce biodiversity and ecosystem services

Moderate-High

Moderate – High

(uncertain) High High


21




Scenario D Very high Moderate High

Of 4: Mandatory EU requirements to offset losses to all biodiversity and ecosystem services

Very high Very high Moderate High

Essential to achieve full NNL for biodiversity; some ecosystem trade-offs would be necessary

Source: adapted from NNL Policy Options Study (Tucker et al, 2014) Table 5.38 and Table 6.10. Efficiency = the extent to which the contribution to the NNL objective may be achieved for a given level of resources/at least cost (cost-effectiveness).

From this analysis it was concluded that there is a complex and wide range of significant pressures on ecosystems that are proving difficult to address and are likely to continue affecting biodiversity and ecosystem services to 2020 and beyond. Some of the most widespread and significant impacts on biodiversity and ecosystems services arise from agriculture, forestry and other land uses, and therefore it will be necessary to address these sectors fully to achieve the NNL target. The NNL Working Group came to similar conclusions regarding the need for offsetting across all sectors.

Significant policy initiatives will need to be taken from the EU down to the more local scale to address these pressures. These could start with improving the implementation of existing EU legislation as there is evidence that several measures are not being implemented either sufficiently or always effectively by Member States. In accordance with the principles of the mitigation hierarchy, the improvement and enhancement of existing policies and instruments should focus firstly on measures that primarily avoid or reduce impacts.

However, although the NNL Policy Options Study concluded that much could be achieved by better implementation of existing measures, there are some significant policy gaps, most notably concerning the treatment of unavoidable residual impacts on biodiversity outside Natura 2000 sites, especially those related to agriculture and other land-use related activities. Therefore, to achieve the NNL objective requirements for both offsetting and remediation will need to be extended beyond the treatment of residual impacts under the Habitats Directive and Environmental Liability Directive (ELD) to cover significant impacts on all species and habitats, wherever they occur. These measures are included in Policy Scenario C above, for scarce biodiversity, but only Scenario D would achieve NNL for all habitats and species.


22

The introduction of offsetting could, however, if implemented without sufficient care, introduce risks (such as a lowering of existing protection levels) and therefore the study recommends that ‘offsetting should only be further extended through new legislation and made a mandatory requirement if the provisions are sufficiently well designed and robust to ensure that it will be adequately:

designed and regulated according to clear principles and standards that are compatible with international best practice;

monitored by competent environmental and nature conservation authorities, with clear enforcement measures triggered if the offset does not comply with agreed standards and/or meet its objectives and achieve as a minimum NNL; and

supported and administered through appropriate governance procedures and adequately resourced institutions.’

Although the general conclusions of the NNL Policy Options Study were clear it was not within the scope of the study to undertake a detailed and in-depth analysis of the likely impacts of the policy scenarios. As a result many of the assessments of effectiveness and efficiency were primarily qualitative and those that are quantitative were mostly of a preliminary nature. Therefore the impact assessment components of the study are considered to be indicative and not sufficient to inform a formal policy Impact Assessment by the Commission.


23

2 THE AIMS OF THE CONTRACT

2.1 Overall aims

As stated in the Technical Specifications the general objective of this contract is to provide the Commission with a detailed assessment of the policy options identified in the final report of the service contract “policy options for an EU No Net Loss initiative” and in particular to provide information on the impacts associated with the various options.

In particular, this study aimed to provide the additional information on the impacts of the policy options and scenarios (with necessary revisions) put forward in the NNL Policy Options Study (Tucker et al, (2014) that is necessary to support the Commission’s required impact assessment of the NNL initiative. Therefore, since its start in December 2014, the study has followed the European Commission’s 2009 Impact Assessment Guidelines10 with particular regard to Chapters 8 and 9 (and associated annexes). According to this, the objectives of an impact assessment are to:

help the EU institutions to design better policies and laws;

facilitate better-informed decision making throughout the legislative process;

ensure early coordination within the Commission;

take into account input from a wide range of external stakeholders, in line with the Commission's policy of transparency and openness towards other institutions and the civil society;

help to ensure coherence of Commission policies and consistency with Treaty objectives such as the respect for Fundamental Rights and high level objectives such as the Lisbon or Sustainable Development strategies;

improve the quality of policy proposals by providing transparency on the benefits and costs of different policy alternatives and helping to keep EU intervention as simple and effective as possible; and

help to ensure that the principles of subsidiarity and proportionality are respected, and to explain why the action being proposed is necessary and appropriate.

The 2009 guidelines indicate that impact assessments should involve the following key analytical steps:

1. Identifying the problem a. Describe the nature and extent of the problem. b. Identify the key players/affected populations. c. Establish the drivers and underlying causes. d. Is the problem in the Union's remit to act? Does it pass the necessity

and value added test?

10

SEC(2009) 92 http://ec.europa.eu/smart-regulation/impact/commission_guidelines/docs/iag_2009_en.pdf


24

e. Develop a clear baseline scenario, including, where necessary, sensitivity analysis and risk assessment.

2. Define the objectives

a. Set objectives that correspond to the problem and its root causes. b. Establish objectives at a number of levels, going from general to

specific/operational. c. Ensure that the objectives are coherent with existing EU policies and

strategies, such as the Lisbon and Sustainable Development Strategies, respect for Fundamental Rights as well as the Commission's main priorities and proposals.

3. Develop main policy options

a. Identify policy options, where appropriate distinguishing between options for content and options for delivery mechanisms (regulatory/non-regulatory approaches).

b. Check the proportionality principle. c. Begin to narrow the range through screening for technical and other

constraints, and measuring against criteria of effectiveness, efficiency and coherence.

d. Draw-up a shortlist of potentially valid options for further analysis.

4. Analyse the impacts of the options a. Identify (direct and indirect) economic, social and environmental

impacts and how they occur (causality). b. Identify who is affected (including those outside the EU) and in what

way. c. Assess the impacts against the baseline in qualitative, quantitative

and monetary terms. If quantification is not possible explain why. d. Identify and assess administrative burden/simplification benefits (or

provide a justification if this is not done). e. Consider the risks and uncertainties in the policy choices, including

obstacles to transposition/compliance. Where there are significant uncertainties, note these for sensitivity analysis.

5. Compare the options a. Weigh-up the positive and negative impacts for each option on the

basis of criteria clearly linked to the objectives. b. Where feasible, display aggregated and disaggregated results. c. Present comparisons between options by categories of impacts or

affected stakeholder. d. For key assumptions and uncertainties noted during preceding steps,

undertake sensitivity analysis to establish the robustness of the results.

e. Identify, where possible and appropriate, a preferred option.

6. Outline policy monitoring and evaluation


25

a. Identify core progress indicators for the key objectives of the possible intervention.

b. Provide a broad outline of possible monitoring and evaluation arrangements.

The NNL Policy Options Study developed a BaU Scenario to support the Commission in step 1 and analysed the NNL objective to support the Commission in step 2 of the Impact Assessment. Steps 3a and 3c were also carried out to a large extent. Therefore, this study aimed to support the Commission with respect to steps 3d (carried out under Task 1 – see below) and 4 and 5a-c (carried out under Task 2 and 3).

However, as part of its Better Regulation agenda, in May 2015 the European Commission published a comprehensive set of Better Regulation Guidelines11, which contain guidance on how Commission Services should conduct impact assessments. These are accompanied by a toolbox that provides complementary guidance on specific impact assessment elements. As this study had already been underway for six-months and had completed a lot of its analysis its results may not be entirely in accordance with the new guidance. However, the new guidance does not include major changes to the principles of impact assessment and the steps are similar to those outlined above. Nevertheless, the analysis undertaken in this study and presentation of results takes into account changes in the guidance to the extent that it was feasible.

In accordance with the tender specification, this impact assessment has focussed on economic impacts, where this is feasible with the information that is available. This focus is appropriate because the NNL Policy Options Study carried out a relatively comprehensive assessment of the likely terrestrial environmental impacts of the policy scenarios (i.e. bundles of policy options) through modelling of land use changes and in turn their impacts on biodiversity and selected ecosystem services indicators. The impacts of individual policy options were estimated semi-quantitatively in relation to biodiversity and ecosystem service indicators. In contrast, only indicative and mostly qualitative estimates of the economic costs and benefits (and in turn social impacts), could be produced within the scope of the study. With a more detailed objective assessment of available evidence it is possible to quantify economic impacts to some extent for the policy options that are likely to have the highest impacts.

The Commission’s 2009 and 2015 impact assessment guidelines indicate that the economic, social and environmental impacts of the different policy options should be quantified to a level proportionate to the importance and scope of the proposed measure. Therefore, this has been reflected in this study, with the greatest resources given to quantifying, to the extent that is feasible, those policy options that are likely

11

http://ec.europa.eu/smart-regulation/guidelines/toc_guide_en.htm

http://ec.europa.eu/smart-regulation/guidelines/toc_guide_en.htm


26

to have the most significant impacts, particularly in terms of economic costs and benefits.

2.2 Specific tasks

The following tasks were set out in the contract specification:

Task 1: Review and refine Business as Usual (BaU) and policy scenarios The aim of this task was to ‘review the 4 policy scenarios and the Business as Usual scenario, identified in the previous contract and amend and refine them in the light of the latest information’. The results of this task are set out in chapter 3.

Task 2: Assessment of the impacts of each policy scenario The project specification stated that ‘On the basis of the revised policy scenarios resulting from Task 1, the contractor will analyse the projected direct and indirect impacts of the different policy scenarios following the approaches described in the Commission Impact Assessment guidelines including annexes, for carrying out impact assessment and in particular chapters 8 and 9 thereof.’ This included an analysis and comparison of the economic (including administrative and legal costs of implementation and administrative burdens), social and environmental impacts of the different scenarios, in comparison with the (possibly revised) BaU scenario.

The specification also noted that in order to develop a quantitative (and as far as possible monetary) assessment of the impacts, the chain of logic relating to the impacts should be set out and the methodology used for carrying out the analysis, including the underlying assumptions, clearly explained and justified. In particular, ‘A set of operational criteria for comparison of the impacts shall be developed, taking into account the Commission IA guidelines. The projected impacts should, where the quality and extent of the underlying data allow it, be detailed and quantified; where quality and extent of the data is not deemed of sufficient quality for quantitative analysis, alternative approaches should be proposed’.

However, as explained in the next chapter, it is important to note that as a result of political and policy developments it was no longer realistic at the time of this study to focus the assessments on the combined impacts of policy options under policy package scenarios. As a result, the study primarily assessed the potential impacts of individual policy options, but in a manner that should facilitate later assessments of their combined impacts, if revised policy package scenarios are devised in the future.

Task 3: Revision of the assessment of the impacts of each the policy scenarios

The principal aim of this stage was to carefully check, update and complete the impact assessment on the basis of information provided by the Commission.


27

3 REVIEW AND REFINEMENT OF POLICY OPTIONS

3.1 Approach to the selection of policy measures

This chapter presents the results of Task 1, which reviewed the Business as Usual (BaU) scenario and the policy options in the four policy scenarios as identified in the NNL Policy Options Study (Tucker et al, 2014), and amended and refined them in the light of the latest information. This involved two principle steps: firstly a reassessment of the individual policy options identified in the NNL Policy Options Study to establish if they remain relevant, feasible and realistic; and secondly, a reassessment of the coherence and feasibility of each of the scenarios.

The reassessment of each policy option was necessary in order to take into account policy developments and legislative amendments (e.g. the amendment of the EIA Directive), new information (especially the public internet consultation on the EU NNL initiative12) and the latest Commission Work Programme13. In particular, the formal engagement letters from President Juncker to the new Commissioners indicate that this Commission’s work programme will not be focused on new legislation14. In addition, the majority of respondents to the consultation on the EU NNL initiative were against developing an EU level legal framework for compensation / offsetting. The NNL Policy Options Study clearly indicated that the development of any EU wide legal framework on offsetting would require a number of preparatory and supporting actions to develop new tools, to gain experience and to increase competence and capacity, that would take several years to carry out. It was therefore clear that, even if taken forward by this Commission, offsetting could not be a mandatory requirement before 2020.

While public debate on the NNL initiative has tended to highlight the issue of offsetting, there are many other actions that are needed to achieve the NNL objective. Indeed, whilst there was majority support for a voluntary offsetting framework that would provide guidance and standards for good practice, there was a strong agreement that respecting the principles of the mitigation hierarchy was essential for achieving the NNL objective. The majority of respondents to the public consultation also felt that agriculture, forestry, fisheries and aquaculture were priority sectors for inclusion in the initiative. With this in mind, measures to ensure the avoidance and reduction of impacts were considered as a priority over offsetting unavoidable residual impacts. However, opportunities for developing or changing policies related to these sectors are limited as a result of the policy timetable, with changes to the CAP, CFP and other EU funding instruments for the 2014-2020 programming period no longer possible.

12

http://ec.europa.eu/environment/nature/biodiversity/nnl/results_en.htm 13 http://ec.europa.eu/atwork/key-documents/index_en.htm 14

http://ec.europa.eu/commission/sites/cwt/files/commissioner_mission_letters/vella_en.pdf

http://ec.europa.eu/environment/nature/biodiversity/nnl/results_en.htm

http://ec.europa.eu/atwork/key-documents/index_en.htm

http://ec.europa.eu/commission/sites/cwt/files/commissioner_mission_letters/vella_en.pdf


28

3.2 Selection of individual policy measures

To carry out a systematic reassessment of the policy options, taking into account the issues above, the following set of criteria were used to identify the options that should be withdrawn from the scope of the present study:

Unlikely to be implementable before 2020 (i.e. the reference year for the impact assessment, as discussed below) as a result of practical issues (e.g. the need for a number of preparatory and supporting actions to develop new tools, to gain experience and to increase competence and capacity), or as a result of the timing of the EU’s policy and legislative cycle (which precludes revisions to the CAP and other EU funding regulations before 2020).

The policy option has been adopted and implemented in a similar way to the proposed option, and therefore should be incorporated into the BaU scenario and modified if necessary to ensure it is aligned with the actual policy / legislative instrument.

No longer considered to be appropriate according to new information (e.g. evidence on the impacts of the policy in terms of its effectiveness and cost or unexpected detrimental impacts).

In carrying out this task, and the study as whole, it was important to consider what should be the reference year for the impact assessment, as the tender specification did not explicitly refer to a specific year for which impacts should be assessed. It was considered most appropriate to use 2020 as the reference year for expected impacts, because this is the year referred to in the EU biodiversity headline target and Target 2 of the EU Biodiversity Strategy (see Box 1-1 above), which the NNL initiative aims to support (under Action 7). Furthermore, 2020 is the reference year used for the BaU scenario developed in the NNL Policy Options Study, and the tender specification indicated that the impact assessment should be in relation to the BaU scenario. However, it was also recognised that some of the economic and social impacts of the policy options would take time to become significant, and therefore 2030 was also used as an additional reference year where the impacts are expected to differ from those in 2020.

A summary of whether each policy option has been retained, modified or excluded from further analysis is set out in Table 3-1. Major modifications are summarised in the table below, with further elaboration provided in the subsequent chapters, which assess the retained policy options in groups.


29

Table 3-1: A summary of the treatment of the policy options included in the NNL Policy Study

Colour codes: green = included in this study (with amendments if necessary); purple = included but as part of the BaU scenario; orange = excluded from this study.

NNL Policy Study option Criteria for exclusion Requirements for modification Action taken & revisions

BHD 1: Improved and wider appropriate assessments and compensatory measures for unavoidable impacts, including improved metrics

None

Update in relation to latest MS reports, and other information obtained as part of the nature legislation Fitness Check, but with no prejudgments of the outcome of the Fitness Check

Included in study, taking into account new information, but avoiding duplication of the Fitness Check analysis

BHD 2: Improve the implementation of Birds Directive Article 3 and Habitats Directive Articles 3 and 10 to maintain bird populations and the coherence of the Natura 2000 network

None As BHD 1 above As BHD 1 above


None

Take into account existing training and awareness raising measures of the Commission, but with no prejudgements of the outcome of the ongoing ELD Fitness Check

Included, taking into account new information, but without prejudging the outcome of the ELD Fitness Check


None, assuming no change to the legislation is required

Update in relation to other information obtained as part of the ELD REFIT evaluation, but with no prejudgments of the outcome of the Fitness Check

As ELD 1


None (the legislation already allows for this)

As above Included, taking into account new information, but without prejudging the outcome of the ELD Fitness Check

EIA 1: Ensure key EIA reform proposals made by the Commission are adopted

Key reforms have been adopted Incorporated into the BaU Scenario taking into account the final revised Regulation

EIA 2: Wider future reforms of the EIA Given recent reforms there is no Excluded from study


30


Directive possibility for further reforms before 2020

EIA 3: Improve implementation of EIAs through awareness raising and enforcement, especially for agriculture

None Included in study





SP 1: Adoption and implementation of the proposed Directive establishing a framework for maritime spatial planning and integrated coastal management Marine Spatial Planning Directive

The proposed Directive has been adopted but Member States do not need to develop maritime spatial plans until 2021. Therefore the Directive will not have any significant impact before 2020

Excluded from analysis



SP 3: Development of a Directive establishing a framework for terrestrial spatial planning

Not realistic as it would require new legislation, which would take several years at least to be developed and agreed under EU processes, which would lead to impacts after 2020

Excluded from the study

BP 1: Ensure all EU funds, especially those related to regional policy, transport and energy fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures

None

Modify as the regulatory instruments have been agreed to 2020, so Member States cannot be required to undertake this option, but can be encouraged to do so. Take into account DG ENV study on a common framework for biodiversity proofing (Medarova-Bergstrom et al, 2014).

Included in study with revisions as ‘Encourage Member States to ensure that the implementation of all EU funded projects, especially those related to regional policy, transport and energy fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures’

CAP 1: Raise awareness amongst Member None Update in relation to new CAP Included in study and updated so that it


31


States land managers about the importance of maintaining semi-natural habitats, with a particular focus on HNV farmland

regulations, delegated and implementing acts and new information on the implementation of Greening Measures and Rural Development Programmes (RDPs) in each MS.

is now aimed at Member States

CAP 2: Include suitable indicators within the Monitoring and Evaluation Framework to allow progress to be evaluated against NNL objectives.

The MFF has been finalised and RDPs have proposed additional national/regional indicators. There is no opportunity to make significant revisions to the CAP 2014-2020 regulations.

Excluded from study

CAP 3: Encourage and support all Member States to put in place a system of mapping and recording of all semi-natural habitats and landscape features on agricultural land

No longer feasible as new CAP regulations were modified to limit mapping and recording requirements on MSs in the face of cost implications for MSs. Such an initiative is likely to need to come from the MS rather than from the Commission before 2020 and significant resistance from many to carry out mapping consistently. There may be a new policy impetus to encourage the mapping and recording of semi-natural habitats on farmland via the new requirements for reporting and accounting cropland management and grazing land management under the EU Decision on Land Use, Land Use Change and Forestry, but the impacts are unlikely to be significant before 2020,



32


as legislation would not take full effect until after that date.

CAP 4:Encourage Member States to require all land holdings entering land management options under EAFRD to have an environment plan in place against which changes can be assessed, approved etc.

No longer feasible as the conditions for entry into land management agreements under the EAFRD have already been identified by MSs in their RDPs which are currently in the final stages of approval by the Commission. Any changes to scheme eligibility criteria prior to 2020 would need to come primarily from a MS as a programme modification rather than instigated from the Commission.


CAP 5: Encourage Member States to apply the Pillar 1 greening requirement for permanent grassland in a way that protects valuable semi-natural grasslands

No longer feasible as it would require an adaptation of the new CAP but political agreement on the CAP has already been concluded for the period 2014-2020.



None

Update in relation to new CAP regulations, delegated and implementing acts and new information on the implementation of Greening Measures in each MS.

Included in study, taking into account the finalised regulations

CAP 7: Include ‘preservation of semi-natural habitats, including semi-natural grassland, peatlands, wetlands [others]’ in the cross-compliance framework as a GAEC standard as an alternative to CAP Option 4.

No longer feasible as it would require an adaptation of the new CAP and there is no opportunity to make significant revisions to the CAP 2014-2020 regulations.

Excluded from study

FP 1: Develop a rigorous standardised None Revisions in the light of evaluations of Included in study with revisions as ’


33


accountable forest monitoring and evaluation system

the current forest biodiversity monitoring and evaluation schemes (the Forest Europe (MCPFE) criteria, JRC Forest Information System for Europe, Habitats Directive Implementation reports etc.) and the current state of the policy framework for Sustainable Forest Management.

Encourage Member States to cooperate on a voluntary basis to develop a rigorous standardised accountable forest monitoring and evaluation system’

FP 2: Include targets that contribute to NNL of biodiversity and ecosystems within Sustainable Forest Management in the new EU Forest Strategy and Implementation Plan

None

The EU Forest Strategy has been finalised and therefore targets cannot be incorporated directly, but voluntary targets can be promoted alongside

Included in study with revisions as ‘Develop voluntary targets that contribute to NNL of biodiversity and ecosystems and promote their integration into relevant sustainable forest management strategies, programmes, plans, criteria, indicators, and monitoring and certification schemes’

SD 1: Adoption of the proposed Soil Directive

This has now been withdrawn by the Commission but impacts would have been post 2020 anyway





Revise to support other voluntary initiatives (e.g. Of 1)

Included in study


None Consider in response to the recent DG ENV study on specific design elements of biodiversity offsets

Included in study, taking into account new information

Of 2: EU Framework with mandatory offsetting of residual impacts of EU funded development projects on scarce

A step-wise approach to the development of an EU framework for offsetting is seen as more realistic. Of 2

Reflect the stepwise approach so that Member States are not required to undertake this option, but are

Included in study with revisions as ‘EU Framework to promote offsetting of residual impacts of EU funded


34


biodiversity and priority ecosystem services

would build on Of 1, but mandatory offsetting would require changes to EU funding regulations, which is no longer feasible within this period of the budget (MFF) running up to 2020.

encouraged to do so. Consider in response to the recent DG ENV study on specific design elements of biodiversity offsets.

development projects on scarce biodiversity and priority ecosystem services’

Of 3: Mandatory requirements to offset significant losses of scarce biodiversity and ecosystem services

As noted above a step-wise approach to the development of an EU framework for offsetting is seen as more realistic. Mandatory offsetting would also require some form of new legislation, which would take several years at least to be developed and agreed under EU processes. The NNL public consultation also indicated that there is little support for mandatory offsetting.

Excluded from study

Of 4: Mandatory EU requirements to offset losses to all Biodiversity and Ecosystem Services

As above Excluded from study


35

4 IMPACT ASSESSMENT METHODOLOGY

4.1 Overview: Instruments and Assessment Criteria

This chapter presents the summary of the methodology for the impact assessment (IA) across the 10 policy instruments and 18 measures identified in the ‘NNL Policy Options Study’ (Tucker et al, 2014) and amended and refined in chapter 3.

While the ‘NNL Policy Options Study’ presented a largely qualitative assessment of the (initially long list of) 30 policy options, the current study not only revised the qualitative assessment for the subset of these options as agreed at the end of the Task 1, but also carried out a more comprehensive analysis that combined qualitative, quantitative and monetary assessments of the likely economic, social and environmental impacts, following the Impact Assessment guidelines and those of the new Better Regulation package15. It also covered governance impacts for each option.

In order to make the detailed impact assessment both manageable and as refined as possible, the impacts associated with each policy option listed in Table 3-1, have been analysed in isolation (i.e. measure by measure) and together as measures within an instrument package, helping to identify the interactions between measures. Chapters 5 to 14 cover the 10 instruments (and 18 selected measures) in turn. The interactions across all policy options and instruments are presented in chapter 15.

The analysis of impacts of the instrument options consisted of three steps, the third of these following the Better Regulation guidelines regarding proportionality:

Step 1: Identification of the (economic, social, environmental and governance) impacts.

Step 2: Qualitative assessment of the more significant impacts.

Step 3: In-depth qualitative and quantitative analysis of the most significant impacts.

These have been carried out against the specific criteria presented in Table 4-1 and fine-tuned for each instrument, as given in chapters 5 to 14.

15

http://ec.europa.eu/smart-regulation/better_regulation/key_docs_en.htm

http://ec.europa.eu/smart-regulation/better_regulation/key_docs_en.htm


36

Table 4-1 IA assessment criteria and links to NNL policy options study criteria

16

The new Better Regulation Package, underlines that evaluations should be: proportionate, cover economic, social and environmental factors and should ask questions related to effectiveness, efficiency, relevance, coherence and EU value-added. Table 5.2 explicitly addresses the economic, social and environmental factors as well as coherence and relevance. Effectiveness and efficiency as assessed with reference to the environmental performance indicators, and in the latter case taking into consideration the costs. The EU added value is explored explicitly in the section 5.4 and across all instruments.

IA assessment criteria16

for the

assessment of scenarios against the BaU Explanation and indicators

Addressing the problem/challenge - biodiversity and ecosystem service loss and contribution to the overarching objective of achieving NNL / net positive gain.

To what extent does the instrument address the problem of biodiversity and ecosystem service loss? i.e. is it effective? What level of contribution does the option, instrument and combination of instruments make to NNL / net positive gain? This contributes to the assessment of whether the instrument in question is “relevant” to the objective set for the NNL assessment.

Enforcing the mitigation hierarchy and contributing to different stages of the mitigation hierarchy: (i.e. what is the direct and indirect significant effects on: avoidance, minimisation, rehabilitation/restoration, offsetting and additional conservation actions?)

To what extent does the instrument support the mitigation hierarchy? i.e. is the balance of focus right? And which stages of the mitigation hierarchy does the policy principally address and contribute to?

For the above over-arching criteria, the following criteria are used (in the qualitative synthesis):

Environmental Issues (synthesis)

Biodiversity & habitats (direct and indirect land use / marine use impacts)

Indication of potentially impacted biodiversity levels: i.e. 1) EU threatened biodiversity (i.e. habitats and species requiring conservation under the Birds and Habitats Directives); 2) Scarce biodiversity (i.e. other species requiring conservation under national legislation or initiatives); and 3) All in situ wild native biodiversity.

Provision of other environmental benefits: ecosystem services

Indication of which ecosystem services will be potentially impacted. Impacts are given for overall ecosystem service benefits if all similar, or separated out for those that may be very different. Where there are trade-offs between biodiversity and ecosystem services these are noted, as well as insights on trade-offs between services. As the ecosystem service impacts are also an economic issue, and to avoid repetition, in the instrument assessment the impact is presented only once -- i.e. what values of ecosystem services are expected to be derived from the options, instruments and overall set of NNL instruments? This is then noted as the first economic criterion.

Economic Issues (costs and benefits) (together with environmental contributions helps inform reflections on efficiency)

Administrative costs (at EU and Member State level)

Costs to developers (fees, labour costs etc.; e.g. using cost per project, cost per EIA etc.) Costs to regulatory authorities (time, fees and expenses) These can be estimated using standard cost model (SCM), taking account of number of cases and time/ cost per case Time taken for permitting of developments


37

17

See also the Practicability and Enforceability checklist developed by IEEP.

Qualitative assessment of uncertainty and “hassle factors”

Financial costs (one-off)

E.g. costs of land acquisition/ rental One-off costs of restoration / re-creation One-off costs of management planning They depend on extent of activity (e.g. number and hectares of biodiversity offsets), type (e.g. type of habitat) and unit cost (e.g. cost per hectare, per management plan)

Financial costs (recurrent) E.g. ongoing costs of land management Ongoing costs of monitoring

Opportunity costs Opportunity costs of time (i.e. project delays) and foregone development (where NNL is judged to lead to net restrictions in development).

Social Issues

Number/quality of jobs; economic activity generated

Number/quality of jobs undertaken by different socio-economic groups

Access to nature and health benefits/ quality of life

How does the instrument affect access to nature and the quality of life? For example are there particular concentrations of impacts (positive or negative) in particular geographical locations that affect access, health or quality of life (e.g. coastal towns for marine policies, areas with high tourism activity)

Equity and future generations (builds on biodiversity and ecosystem service availability, health etc.)

Equity - social group burdens: distribution by social group/sector, and in relation to the ‘polluter pays’ (i.e. damager pays) principle

Recreation & tourism (builds on NNL progress)

Does the instrument support recreation and tourism and hence social access to activities and wellbeing?

Other issues: Good governance / Practicability and Enforceability

Clarity Consideration of whether the instrument option will be understood

Measurability Consideration of whether it is possible to measure with reasonable certainty the contribution to NNL

Practicability/Feasibility17

The practicability of the option: e.g. are there sufficient trained staff, available information, etc., to implement the policy?

Enforceability

Consideration of: Costs of non-compliance: the tangible/intangible advantages and disadvantages of breaking or complying with the rule, expressed in time, money and effort Degree of acceptance: the degree to which those required to comply regard the policy and the rules as acceptable. Risk of reporting: estimated by the target group, of a violation detected by others than the authorities being reported to the authorities (e.g. by an NGO)

Coherence with sustainable development and other policies

Consideration of the extent to which the option is coherent with the overarching objectives of EU policy and limits necessary trade-offs across economic, social and environmental domains.


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The IA criteria used build on the IA guidelines, the new Better Regulation package, and the team’s experience with IAs, including the EU Green Infrastructure initiative (Mazza et al, 2012), Nagoya Protocol implementation (IEEP et al, 2012a), invasive alien species strategy (Kettunen et al, 2009). The IA criteria and indicators used to assess against the criteria are presented in more detail in subsequent sections.

For each instrument and policy option the assessment focused on their incremental benefits, for each specific option and combined options of an instrument. In addition the impacts on the broader EU baseline were also assessed.

4.2 Analysis steps and communicating the impacts

4.2.1 Contribution to no net loss and the mitigation hierarchy stages

It was considered useful to indicate the potential contribution that each policy option can make to the stages/elements of achieving NNL in accordance with the mitigation hierarchy as depicted in Figure 4-1. It should be noted that this NNL hierarchy extends what is traditionally seen as the mitigation hierarchy – as it also integrates a wider “avoided impacts” through what we call “deterrence”.

Figure 4-1 The potential contribution of the instruments to no net loss in relation to the mitigation hierarchy

Source: adapted from Business and Biodiversity Offsets Programme18

18

http://bbop.forest-trends.org/pages/mitigation_hierarchy

http://bbop.forest-trends.org/pages/mitigation_hierarchy


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The hierarchy reflects a prioritisation in the sense that, for example, offsetting should only be done to address any residual impacts. However, the existence of the (threat of / need for) offsetting will in itself lead to measures higher up the hierarchy – i.e. helping in deterrence and even, potentially, more effort with and more effective SEAs/EIAs, as the potential costs of needing offsets focuses attention on avoidance.

4.2.2 Environmental impacts

The analysis of environmental impacts initially covered all the policy options retained after the Task 1 update (as summarised in Table 3-1). However, as also noted in the tender specification, the need for detailed analysis takes into account the proportionality principle, and therefore the main focus has been on those policy options that are expected to have the greatest impacts on biodiversity and ecosystem services. Thus the primary aim of the analysis of environmental impacts was to identify the main impacts on biodiversity and ecosystem services that could result from each policy option and then to quantify the most significant impacts to the extent possible without further modelling (see chapters 5 to 14 for details of the assessments and Box 4-1).

In practice, whilst the “macro baseline” (biodiversity and ecosystem service loss in the EU) of the NNL Policy Options Study (Tucker et al, 2014) formed a background/context for this study, measure specific reference points and/or baselines were created in order to ensure meaningful results. The assessment of the options and instruments was firstly relative to the option/instrument reference point and baseline (i.e. how does the instrument improve / worsen impacts across categories – firstly against current practice (reference point) and against expectations into the future – the baseline). This was largely an incremental benefits and costs analysis. The assessment against the macro baseline was considered with respect the combination of instruments as a whole, as the scale of most of the options and instruments looked at in isolation is unlikely to have a major impact on the macro baseline (see chapter 5 to 14 for more specific observations and assessment insights; and chapter 15 for the synthesis discussion).


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Box 4-1 Analysis Context: Ecosystem Services

Figure 4-1A below presents a conceptual illustration of the causal links, between drivers, pressure, impacts and value. A range of drivers create pressures on biodiversity that in turn affect its functions and the provision of ecosystem services. These have impacts on human welfare, wellbeing, society and the economy, and can be valued using a range of tools. Within this NNL study, the focus on policy drivers was on what the policy instruments and measures noted above. The impacts are illustrated in Figure 4-1B, highlighting that benefits can accrue from halting or slowing expected losses (e.g. avoiding degradation, hence safeguarding the flow of services), or driving cases of net positive gain (e.g. restoration of already degraded land).

Figure 4-1A The pathway from drivers to impacts

Figure 4-1B: Illustrative schematic for analysing the value of impacts on ecosystem services over time : Policy Measures


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Finally appreciating the multiple values associated with the loss of biodiversity, and the potential of instruments and measures to either avoid the losses or create gains, helps in selecting which instruments offer added value. The method and approach for assessing the environmental and socio-economic impacts is instrument specific, though it follows the generic approach of understanding what the biodiversity and ecosystem services are from different land uses, how this is changing and how the instruments avoid losses and/or support gains.

Figure 4-1C: Natural capital, ecosystem services, wellbeing and livelihoods and their integration into stakeholder decision making, policies and instruments

The assessment of impacts of different policy instruments and measures on biodiversity and the associated provision of ecosystem services was largely carried out by expert judgement drawing on the NNL Policy Options Study outputs, evidence from across Europe where relevant, in particular on offsetting costs in Germany and France (Annexes 4 and 5) as well and other more recent information (e.g. Member State reports on the status of habitats and species of Community interest) – in each case presenting a transparent data trail, method and assumptions.

The identification of impacts considered all policy options, with all undergoing a qualitative assessment. Quantitative assessments were undertaken for those with the largest potential impacts on biodiversity and ecosystem services where the required information was available.

The monetary assessment of ecosystem service losses (and hence avoided losses as

a results of the instrument options), is a complex challenge for the analysis.

However, there is a clear understanding that the multiple values of ecosystem

services are very high – with a provisional estimate suggesting those within Natura

2000 sites are around €200-300 billion per year (see


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Box 4-2), although the values are generally very site specific and include a range of services. Given the wide scope of this EU study across several policy instruments it was not possible to carry out primary research on the values of avoided losses of ecosystem services linked to each instrument, hence the quantitative and monetary approach adopted included:

providing concrete case examples of site specific benefits and costs from academic and grey literature;

comparing the costs of the measures in the analysis with illustrative benchmarks (e.g. comparing EIA costs with 1% of the value of ecosystem services in Europe) to give an indication of their relative scale. These “back-of-the-envelope” illustrative comparisons were generally considered more appropriate than attempting EU wide “benefits assessments” for specific instruments and measures in this study because they would have involved a wide range of assumptions, have been beyond the resources of this study and not provide answers that would offer substantially more light on the costs and benefits of the measures; and

using selective “what if” assessments as appropriate for the specific instruments in the light of what was relevant and what is known. This has helped shed light on the suitability of some options and the robustness of conclusions (e.g. what assumptions are required for their benefits to outweigh their costs). However, as all sites are unique, and values depend on both the ecosystem and the interactions with social and economic systems, the results from such assessments need to be interpreted with caution.

Quantification was therefore more suitable for some of the measures than others, and details are given in specific chapters.


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Box 4-2: Analysis Context: The Values of Ecosystem Services

A first assessment of the multiple values of protected areas in Europe has underlined that protected areas provide many services of value to society and the EU. The terrestrial Natura 2000 network comprises 27,000 sites that cover almost 18% of the EU territory and have been estimate to lead to a flow of ecosystem services valued at between €200-300 billion per year (ten Brink, Rayment et al, 2012)

across a range of ecosystem services. With regards to carbon, for example, it is estimated that

the Natura 2000 network currently stores around 9.6 billion tonnes of carbon, equivalent to 35 billion tonnes of CO2, which is estimated to be worth between €607 billion and €1,130 billion (stock value in 2010), depending on the price attached to a tonne of carbon. There are also ecosystem service benefits outside the Natura 2000 network, e.g. in relation wider Green Infrastructure. No estimate has been made of these yet, though there is ongoing work under the Mapping and Assessment of Ecosystem Services (MAES) initiative that is creating a basis for future assessments. Benefits are site specific and in many cases sites outside of protected areas will have significantly higher ecosystem service provision, though often with very different balance of services depending on land-use choices.

Illustrative mean and median per hectare values of ecosystem services in Natura

2000 sites 19

Basis Value per hectare

2011 €/Ha/yr Median Mean

(I) Simple upscaling of site based estimates 2,756 3,950

(II) GDP adjusted site based estimates 2,447 3,441 (III) Values calculated on a habitat basis, GDP adjusted

Habitat Directive Classification (Natura 2000 habitat code)

Coastal and Halophytic Habitats (1) 3,053 2,651 Coastal Sand Dunes and Inland Dunes (2) 6,856 6,856

Freshwater Habitats (3) 1,231 2,256 Temperate Heath and Scrub (4) 5,252 7,866

Natural and Semi-natural Grassland Formations (6) 1,156 1,898 Raised Bogs and Mires and Fens (7) 951 4,681

Forests (9) 924 2,309 Source: Tables 4.2, 4.3 and 4.4 in ten Brink et al (2011).

19

Ideally, the means and medians from the 2011 study would be updated by adding in recent papers for both Natura 2000 sites and range of GI measures, but this was beyond the resources of the study. In any case, with the use of the wide rates, they are arguably fit-for-purpose for the robustness checking sought in the analysis here – as asking the question of whether a measure is worthwhile is a different question from asking what the expected benefits are likely to be. The latter requires greater precision.


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4.2.3 Economic impacts (including administrative and legal costs of implementation and administrative burdens)

As indicated in the NNL Policy Options Study, achieving NNL of biodiversity will require substantial effort across a range of sectors and policy areas in all countries of the EU, and can be expected to result in significant costs and economic impacts. These will vary significantly across the different scenarios, because of variations in the type, extent and ambition of change required.

Significant economic benefits can also be expected. As well as the value of biodiversity itself and society’s willingness to pay to prevent its loss, the benefits can include the maintenance and enhancement of ecosystem services, and potentially more efficient mitigation and offsetting measures. Understanding these economic impacts, and quantifying them as far as possible, will be important in facilitating an evidence-based appraisal of options and debate among policy makers and stakeholders. For each one of the policy options, the assessment therefore explored the type, nature and likely extent and significance of their impacts, and the numbers and types of stakeholders affected. The most significant impacts were quantified and valued as far as possible. The main types of relevant costs that were considered included:

costs of compliance (including costs of land management, habitat restoration and costs of mitigating impacts of development on sites and species);

administrative costs (for business and public authorities);

other burdens (such as planning delays and uncertainties); and

opportunity costs (including restrictions on land use and development).

The analysis also distinguished between capital/ one-off costs and recurring/ annual costs and benefits. The identification of impacts considered the types of costs and benefits relating to each option, and the number and range of stakeholders impacted. This enabled an initial assessment of the overall scale and significance of likely costs and benefits, having regard for the extent of activity required, the number of stakeholders affected and the scale of costs and benefits for each. For example, options which involved developing EU guidance may be regarded as having low costs, while those that result in a substantial change in the number of EIAs required or the extent of effort required for each EIA, or give rise to a requirement for widespread biodiversity offsetting, can be expected to have more significant costs.

Qualitative assessment of impacts was undertaken for the policy options with the more significant impacts (in particular the offsetting options). These explored in more depth the type and nature of the impacts involved, the stakeholders affected, and the implications of the option in terms of the additional effort required, implications for time, fees and land management costs, potential effects on development activity, and implications in terms of administration and regulatory effort. This enabled the options that have greatest economic impact – positive and negative - to be identified.


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Quantitative and monetary assessments were undertaken for the most significant impacts. This quantified major effects of options such as the number and costs of EIAs undertaken, and the extent and cost of biodiversity offsetting. It requires quantification of actions and application of appropriate unit costs to derive overall estimates. It was therefore only carried out where this was feasible with the available information.

Where data allowed, the environmental benefits of action (i.e. effectiveness of the instruments) were compared with their costs to inform discussions on the efficiency of the different measures.

4.2.4 Social impacts

As noted in Box 4-1, a range of social benefits are expected to be derived from improvements in natural capital. For each of the measures and instruments a range of social indicators and issues were assessed, where adequate data were available, including:

The number and quality of jobs either created or supported/safeguarded by the instruments and options and, where information was available, the socio-economic groups that benefit. The latter point can be important for issues of social inclusion, equity, distributional impacts, local and regional development and cohesion.

Access to nature. In an increasingly urban Europe, access to nature (i.e. nature within 5 minutes walk or 300m) is of growing importance and therefore the assessment identified potential impacts on this.

Health benefits and quality of life improvements. Given increasing evidence of the links between the natural environment and health and quality of life benefits (via access, recreation) such issues were noted where they could be linked to the policy options.

Equity and future generations - i.e. availability and access to natural capital and its services. Where information was available on differential social group burdens (i.e. particular burdens for certain minorities or the poor), these were noted. For example, if NNL measures can also help support the availability of recreation opportunities in nature and improve social access to activities and wellbeing, then there are equity benefits for existing and future generations.

4.2.5 Governance considerations

Key issues of importance to the governance assessment included:

Whether the proposed (package of) measures are clear and understandable - this is important to different decision makers, such as MEPs, national authorities, those implementing, etc.

Whether they are practical and enforceable, as this is a prerequisite for effective implementation.


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Whether they are feasible and measureable, which supports implementation, not least by allowing an assessment of progress and effectiveness of measures to improve future performance.

In addition, it was important to assess coherence (with other legislation, policy objectives, principles and hierarchies) to ensure that there are no barriers or inefficiencies that might ensue and that synergies with other policies are maximised to aid delivery.

Finally, there is a question of the appropriate governance level of the measure – i.e. is the responsibility for the measure at the right level (EU, national, local). This, therefore, included consideration of the application of the subsidiarity principle - i.e. whether there is EU competence (e.g. as defined by the EU Treaty), whether the issue is of European concern (i.e. an issue for many Member States and/or cross border issues), whether the issue has not already been dealt with by Member State action (i.e. there is no need for action as already effectively addressed).

Improving implementation of the environmental acquis is a key strategic objective of the EU, reiterated in the 7th Environment Action Programme (7th EAP)20 which inter alia seeks to ensure that by 2020 compliance with specific environment legislation has increased, EU environmental law is enforced at all administrative levels and a level-playing field in the internal market is guaranteed. Better implementation requires a range of different actions at different stages of the policy cycle and across governance levels.

At the same time, the European Commission continues to pursue efforts to improve the effectiveness, efficiency, and transparency of EU legislation and the way in which it is developed. This is currently being taken forward under the ‘smart regulation’ agenda (European Commission, 2010a) and the subsequent Communications on a Regulatory Fitness and Performance Programme (REFIT)) which places significant emphasis on improving the quality of EU legislation throughout the policy cycle as well as a greater focus on implementation and evaluation. Therefore, addressing governance issues in design and application of measures to support NNL is fully consistent (and contributes to) the wider objectives of EU environmental policy making (7th EAP) and the broader EU smart regulation agenda itself.

20

Decision No .../2013/EU of the European Parliament and of the Council on a General Union Environment Action Programme to 2020 "Living well, within the limits of our planet"


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In summary, in practice each measure was assessed against the following criteria:

Clarity (clear and understandable) - i.e. no practical ambiguity as to what needs to be done. Sometimes there is intentional ambiguity to allow a diversity of Member States responses, which is clear and understandable to those concerned. However, flexibility should be clearly expressed, rather than introduced through opaque text.

Measureable (which also informed the previous bullet) - whether the contribution to NNL can be assessed quantitatively. This is important so progress can be demonstrated, measures justified and improvements in application of measures made.

Practical/feasible (Pallemaerts et al. 2006) - i.e. whether there are enough data, enough people with the right skills, whether the costs of compliance could create incentives of non-compliance.

Enforceable21 - whether there is buy-in / acceptance of the instrument, legal tools/capacity exist to address non-compliance, political will to address non-compliance.

Coherent with other policies and principles (e.g. consistency with other policy requirements, compared with sustainable development principles, such as the polluter pays principle and precautionary principle); and

Governance – i.e. whether at the correct level.

4.3 Aggregation across instruments

After the assessments of each policy option in terms of environmental, economic and social impacts, and governance issues, the combined impacts of all the options within an instrument type were considered, taking into account potential synergies and trade-offs. This provided an estimation of the scale of the change compared to the BaU scenario within each impact category and for a wider range of indicators thereunder.

4.3.1 Synthesis

In the summary assessment, to facilitate comparison, the following criteria were applied, synthesising across evidence from cases, qualitative, quantitative and monetary analysis and insights. This was carried out to enable an overall perspective of the 10 instruments and 18 measures’ performance across the range of criteria and to help judge not only the specific benefits of each option, but also the benefits across the group of NNL instruments. Table 4-2 below sets out the synthesis categories that were used to summarise the assessments of each criteria category described above. Table 4-3 indicates that criteria and categories used to help prioritise the policy options, which builds on the extent to which they support the NNL objective (i.e. effectiveness) and the overall balance of their benefits and costs. It should be noted that with respect to impacts – upward arrows and green shading

21

This work will make reference to the practicability and enforceability checklist developed by IEEP for IMPEL


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indicate improvements, and downward arrows and orange shading indicate increasing burdens.22

Table 4-2 Summary of the impacts of instruments and options against the evaluation criteria

Beneficial change ↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗

Neutral -

Detrimental change ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

For scale associated with the assessment see the criteria specific scales; for details behind the synthesis qualitative indicator here, see the chapters on the instruments and measures.

Assessment criteria - issues Qualitative ranking indicators to facilitate comparability

Overarching: meeting objectives: NNL and enforcing the mitigation hierarchy

Estimated magnitude of change: ↗↗↗↗↗ = Completely meet the objective ↗↗↗↗ = close to completely meeting the objective ↗↗↗ = Moderate but substantial contribution ↗↗= Small contribution ↗ = Minor contribution - = No contribution ↘ = Negative contribution, scaled as above. (key/criteria to be defined issue by issue in the context of the assessment).

Environmental changes: Biodiversity (Ecosystem services under Economic and Financial to avoid duplication)

Downward arrows indicate a detrimental change. Estimated magnitude of change: ↗↗↗↗↗ or ↘↘↘↘↘ = Very highly significant change ↗↗↗↗ or ↘↘↘↘ = High change ↗↗↗ or ↘↘↘ = Moderate but substantial change ↗↗ or ↘↘ = Small change ↗ or ↘ = Minor change (key/criteria to be defined issue by issue in the context of the assessment)

Economic and financial: Costs and benefits: Administrative costs (at EU and MS level); Financial costs (one-off); Financial costs (recurrent); Opportunity costs (uncompensated); Economic Benefits from ecosystem services (costs are presented with downward arrows (to reflect increasing burden), benefits up)

Estimated scale of costs: Tens or hundreds of thousands of Euros - Millions ↘ or ↗ (if savings / benefits) Tens of millions ↘↘ Hundreds of millions↘↘↘ Billions↘↘↘↘ Tens of Billions ↘↘↘↘↘

22

In other words three downward arrows on costs suggest that the cost burden getting worse.


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Social: Costs and benefits: Number / quality of jobs generated; Access to nature and Health benefits / quality of life; Equity and future generations

Social (Magnitude key as Environmental above) arrows indicate a detrimental change. Estimated magnitude of change: ↗↗↗↗↗ or ↘↘↘↘↘ = Very highly significant change ↗↗↗↗ or ↘↘↘↘ = High change ↗↗↗ or ↘↘↘ = Moderate but substantial change ↗↗ or ↘↘ = Small change ↗ or ↘ = Minor change

Governance: Clarity Measurability Practicality and feasibility Enforceability Coherence with SD and other policies

Governance (Magnitude key as Environmental above) Upwards arrows indicate a beneficial change with respect to current conditions. Downward arrows indicate a detrimental change. Estimated magnitude of change: ↗↗↗↗↗ or ↘↘↘↘↘ = Very highly significant change ↗↗↗↗ or ↘↘↘↘ = High change ↗↗↗ or ↘↘↘ = Moderate but substantial change ↗↗ or ↘↘ = Small change ↗ or ↘ = Minor change

Table 4-3: Overall judgement on each option

Contribution to NNL objective Overall net benefits Overall judgement -

priorities

-----

Very high net costs across the criteria

--- Negative contribution to NNL*

---- High net costs across the criteria

--- Not recommended**

Neutral --- Moderate net costs across the criteria

Not a priority

* Minor contribution to NNL

-- Small net costs across the criteria

*

Low priority for inclusion in a suitable

policy package to make progress to NNL

** Small contribution to NNL

- Minor net costs across the criteria

**

Moderate priority for inclusion in a suitable

policy package to make progress to NNL

*** Moderate contribution to NNL

Neutral ***

Essential / high priority for inclusion in a suitable policy package to make progress to NNL

**** High contribution to NNL * Minor net benefits across the criteria

** A single "not recommended" category

was selected as no measures that are "not

recommended" would be expected to be put forward.

***** Very highly significant contribution to NNL

** Small net benefits across the criteria

* As the instruments and options were selected for the purpose of contributing to NNL, and given that no measure would be recommended if it didn't contribute to NNL, a single negative category is used in the synthesis assessment

*** Moderate net benefits across the criteria

**** High net benefits across the criteria

***** Very high net benefits across the criteria


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4.3.2 Communicating the benefits

As there are 10 instruments and 18 specific policy measures, and given the wider EU policy context, the study also provided a brief assessment of how each measure could contribute to the following four policy themes, which tie in with the stated priorities of the new Commission23:

Member State initiatives: subsidiarity. A core principle of EU law is the subsidiarity principle – to paraphrase often complex definitions – if something can be done as well or better at Member State level and/or there is no EU competence for action, then it should be done at Member State level. If the issue is an issue of European importance (i.e. for multiple Member States), is of EU legal competence (i.e. supports the implementation of the Treaties), is an issue of substantial importance (e.g. environment, health), and if Member States are not already adequately addressing the issue, then there is scope for EU (legislative) action. The new Commission is committed to ensure that the principle of subsidiarity is fully respected, both by not putting forward new legislative proposals where not necessary, by not progressing with legislative proposals where competency has been argued to be more a Member State issue (i.e. soils directive) and by repealing EU laws if and where the objectives can be proved to be better addressed through Member State action24. This in turn supports the Simplification agenda25.

Better implementation and better regulation. Improving implementation of the environmental acquis is a key strategic objective of the EU as recently reiterated in the 7th Environment Action Programme (7th EAP)26. This seeks to ensure that by 2020 compliance with specific environment legislation has increased and that EU environmental law is properly enforced. This is complemented by efforts to improve the effectiveness, efficiency, and transparency of EU law (development and implementation) – this is part of the ‘smart regulation’ agenda (European Commission, 2010a). This agenda is a continuation of the Better Regulation agenda – both of which aim to achieve the Lisbon Strategy objectives, or those of Europe 2020, its successor.

Information and guidance for good governance: Good governance underpins better implementation and better regulation, and in turn

23

http://ec.europa.eu/priorities/index_en 24 in addition to repealing laws, there is also the potential for codification (bringing together several acts into a new legally binding single act) and Recasting. 25 'Simplifying and improving the regulatory environment' (COM (2001) 726 final). Action Plan 'Simplifying and improving the regulatory environment', presented by the Commission in 2002 (COM(2002) 278 final) 26

Decision No .../2013/EU of the European Parliament and of the Council on a General Union Environment Action Programme to 2020 "Living well, within the limits of our planet"

http://ec.europa.eu/priorities/index_en


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information and guidance facilitates good governance. There is an increased commitment to better information (e.g. 7th EAP, EU regulation on accounts, the Mapping and Assessment of Ecosystem Services (MAES) initiative under the Biodiversity Strategy), commitment to transparency and access to information (Arhus Convention). Similarly guidance is seen as a potentially low cost way of encouraging good practice, keeping down both administrative burdens and implementation costs.

EU budget and EU added value. In discussions on the MFF (Multi-annual financial framework27; legal basis TFEU (articles 310 – 324)), there are repeated commitments to the principle of maximising the added value of EU funding – whether through the use of the Cohesion Funds (ERDF, ESF and CF), European Maritime and Fisheries Fund (EMFF), Life+ (Environment and Climate) and CAP (e.g. Rural Development Programmes) and Connecting Europe Facility.

The four clusters of policy options should be regarded as complementary rather than as alternatives. An EU NNL initiative would be expected to include all four elements. For example, in the absence of new legislation, biodiversity offsetting, as an essential element of a NNL initiative, would need to be developed at Member State level under the principal of subsidiarity, but would benefit from information and guidance at EU level, as well as enhanced implementation of EU legislation and EU examples of good practice through the delivery of NNL from the EU budget.

An indication of how each policy option could contribute to the above four policy themes is provided in the synthesis section of each instrument chapter. In addition, a combined assessment is provided in the conclusions chapter, which aims to provide an aggregate picture that complements the aggregate assessment on NNL performance and hierarchy contributions.

27

COUNCIL REGULATION (EU, EURATOM) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 L 347/884 of 20.12.2013


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5 IMPACTS OF NNL MEASURES: THE BIRDS AND HABITATS DIRECTIVES

5.1 Part 1: Overview of retained policy options

5.1.1 What are the measures

The Birds Directive and Habitats Directives are the main EU legislative instruments that focus on biodiversity conservation. The overall objective of the Habitats Directive is to maintain or restore habitats and species of EU conservation concern to Favourable Conservation Status (FCS), while the Birds Directive aims to achieve good conservation status for all wild bird species naturally occurring in the EU territory of the Member States. Both Directives are similarly designed and structured, requiring not only the conservation of species, but also habitats, primarily through a combination of site and species protection. Their full and effective implementation would therefore contribute substantially to achieving the NNL objective.

The site protection provisions of the Directives focus on the establishment, protection and management of a coherent network of sites, known as the Natura 2000 network. This comprises Special Protection Areas (SPAs) designated under Article 3 of the Birds Directive for species listed in Annex I and migratory species; and Special Areas of Conservation (SACs) designated under Article 3 of the Habitats Directive for habitats and species of Community interest (listed in Annexes I and II respectively).

In addition Article 10 of the Habitats Directive states that ‘Member States shall endeavour, where they consider it necessary, in their land-use planning and development policies and, in particular, with a view to improving the ecological coherence of the Natura 2000 network, to encourage the management of features of the landscape which are of major importance for wild fauna and flora. Such features are those which, by virtue of their linear and continuous structure (such as rivers with their banks or the traditional systems for marking field boundaries) or their function as stepping stones (such as ponds or small woods), are essential for the migration, dispersal and genetic exchange of wild species’.

The Nature Directives require the establishment of measures to ensure the appropriate management and protection of sites. In particular, Article 6(3) of the Habitats Directive requires plans or projects which are likely to have a significant effect on a Natura 2000 site to undergo an ‘appropriate assessment’ (AA) and should be approved only after it is ascertained that they will not adversely affect the integrity of the site concerned. Article 6(4) includes provisions that allow projects or plans that may have adverse impacts to go ahead if they are of overriding public interest and there are no alternative solutions. In such cases the Member State ‘shall take all compensatory measures necessary to ensure that the overall coherence of the Natura 2000 Network is protected’. Thus there are clear legal requirements to address residual negative impacts through measures that would appear to contribute to achieving NNL at least at the network level, but not necessarily at a site level.


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Problems have occurred with the implementation of Article 6.3, including poor or incomplete transposition into national law, poor quality AAs, problems during screening, inadequate assessment of cumulative effects, and a lack of dialogue and integrated planning (Sundseth and Roth, 2013). A particular problem with Article 6.4 is that the meaning of compensatory measures and network coherence is not defined in the Directive, and as a result compensation measures were initially found to be inadequate, of poor quality and not targeted to the species and habitats of Community interest that are the subject of impacts (European Commission, 2008). To address these problems the Commission produced a number of general guidance documents to help to clarify these issues (European Commission, 2000, 2001, 2007), as well as a series of sector specific guidance documents28. The 2007 guidance clarified the meaning of compensatory measures, stating that ‘They aim to offset the negative impact of a project and to provide compensation corresponding precisely to the negative effects on the species or habitat concerned.’ It also emphasised the need to ensure the measures are in accordance with the mitigation hierarchy noting that ‘compensatory measures constitute the “last resort”.’ In order to ensure the overall coherence of Natura 2000, compensatory measures should ‘a) address, in comparable proportions, the habitats and species negatively affected; and b) provide functions comparable to those which had justified the selection criteria of the original site, particularly regarding the adequate geographical distribution.’

An EU study (Sundseth & Roth, 2013) and UK review (HM Government, 2012), have shown that the site protection elements of the Nature Directives provide a strong science-based protection and management framework, which is flexible and proportionate, and works well where properly implemented. Nevertheless, there is evidence of some weaknesses and implementation problems, including with regard to:

Incomplete application of existing measures for identifying, avoiding and reducing potential impacts (Art 6.3). Despite clear obligations for Member States to avoid impacts on Natura 2000 sites and Commission guidance on their interpretation, some proposed developments do still threaten Natura sites. Some of these threats have led to the European Commission sending reasoned opinions to Member States and referral of some cases to the EU Court of Justice, as for instance concerning the potential impacts of wind turbines and other projects on Kaliakra SPA in Bulgaria. It can be anticipated that such legal responses will deal with some threats, but other damaging impacts probably go unnoticed or unreported and, consequently, are not taken up by the Commission.

Inadequate consideration of cumulative and network level effects (Art 6.3). A particular weakness concerns the assessment of potential cumulative impacts on the Natura 2000 network as a whole, as appropriate assessments tend to focus on site-level impacts. Such impacts are best dealt with at high strategic levels, and therefore strategic planning and related Strategic

28 http://ec.europa.eu/environment/nature/natura2000/management/guidance_en.htm#art6


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Environmental Assessments (SEAs) of plans have a major role to play in this respect, while project-level Environmental Impact Assessments (EIAs) should consider cumulative impacts to the degree that it is feasible. However, in practice the treatment of cumulative impacts is weak because of insufficient attention of developers and authorities, while also the current guidance document on the assessment of plans and projects significantly affecting Natura 2000 sites (European Commission, 2001) focuses on site-level impacts, and practical methods for defining functional ecological networks and their needs have yet to be established (Arcadis and IEEP, 2010).

Inadequacy of methods to identify and address residual impacts on Natura 2000 sites (Art 6.4). According to the most recent assessment of compensatory measures (for 2007-2011) the Commission’s guidance appears to have improved compensatory measures. But the Commission notes that it is still often ‘difficult to assess, in some cases, the relation between the compensatory measures and the site's conservation objectives and its role in the Natura 2000 network. Therefore, it is not always possible to assess how the proposed measures will compensate the adverse effects on the integrity of the site and how the coherence of the Natura 2000 network will be preserved.’ The report also notes that information on the methods used to compensate for impacts is insufficient to assess their actual feasibility and possible effectiveness. One possible reason for this is that the European Commission’s 2007 guidance does not indicate how losses/gains should be measured, such as through the use of metrics and how equivalency of gains and losses should be determined.

Inadequate compensation. A study by Regnery et al (2013) in France found that compensatory measures do not always result in adequate offsetting of all species of Community interest, and that only 35% of development projects considered all affected species in their offset measures, and even some impacts on endangered species were not offset. Species richness was much lower in offset sites than in developed sites even after offset proposals. Importantly, this was especially the case where the developed site had a high species richness, in which case the species richness at the offset site was 5-10 times lower. Thus, although compensatory measures under Article 6.4 of the Habitats Directive should result in like-for-like offsetting, this does not appear to be occurring consistently in France at least.

Inadequate implementation of Article 10 coherence measures. Although the Directives require Member States to maintain the coherence of the Natura 2000 network (e.g. through measures that protect landscape features in the wider environment), reports for the Commission found that these requirements have been weakly implemented in many places in recent years (Kettunen et al, 2007; IEEP & Alterra 2010; Mazza et al, 2011).


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As part of its REFIT – Fitness for growth initiative, the European Commission is carrying out a fitness check of the Birds and Habitats Directives. The aim is to establish whether the legislation is fit for purpose, taking into account its effectiveness, efficiency, relevance, coherence and EU-added value. The results of the Fitness Check (and supporting evaluation study) are expected in 2016. The Fitness Check may provide an opportunity to improve and strengthen the implementation of the Birds and Habitats Directives to address potential identified weaknesses, some of which are the result of inadequate or inappropriate implementation of existing measures. Whilst this study does not prejudge the outcome of the fitness check, the potential impacts of two policy options identified in the NNL Policy Options study are assessed below.

5.1.2 Description of the options

Two options are examined to strengthen the contribution of the Birds and Habitats Directives to achieving no net loss of biodiversity.

Birds and Habitats Directive Policy Option 1 (BHD 1): Improved and wider appropriate assessments and compensatory measures for unavoidable impacts, including improved metrics

Measures would be taken to ensure that Articles 6(2) and 6(3) are properly applied to all activities (including agricultural and forestry management and marine activities) that may potentially have a significant impact on designated habitat and species features within Natura 2000 sites. In particular, robust systems would be established for screening proposed activities with respect to the need for an appropriate assessment (e.g. by publishing lists of operations within the Natura 2000 site that would definitely require an appropriate assessment, or a screening opinion from a competent authority).

Further guidance and clarification on compensatory measures could also be provided, to ensure that they achieve NNL through, for example, offsetting. Most obviously, key principles and standards of best practice could be adopted (such as those outlined in Box 5-1) for the use of metrics for measuring impacts and the expected gains from compensatory measures, to ensure NNL is achieved.

Whichever metrics are used they need to be carefully combined with appropriate exchange rules. This is important, because metrics do not capture all important biodiversity values and therefore a precautionary approach needs to be taken that guards exchanges in habitat type that could lead to undetected biodiversity losses. Thus it is especially important for compensation for Natura 2000 site impacts to ensure compensation is like-for-like, where this is feasible.

Lastly, to ensure standards are raised, the capacity of EU institutions and Member State competent authorities (and assisting organisations) could be increased so that they can provide screening and scoping opinions and increase the scrutiny of appropriate assessments and, where necessary, propose compensation measures within suitable time-frames. This would probably require an increase in capacity and


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expertise in involved institutions combined with further awareness raising, training and guidance.

Box 5-1 Good practice considerations for the application of metrics to biodiversity offsets

To ensure that offsets achieve no net loss (or a net gain) it is necessary to measure biodiversity losses from impacts (biodiversity debits) and the gains from offsets (biodiversity credits) in a practical and transparent way so that their equivalency can be compared. To achieve this, metrics are used that define common currencies

29 and units of biodiversity so that the amount of biodiversity loss from

impacts and the amount gained from offsets can be quantified and compared to establish if no net loss, or net gain are achieved. The varied incorporation and treatment of biodiversity properties gives rise to a large number of metrics, the most basic being measures of habitat area, but it is now generally good practice to add measures of habitat value (i.e. ecological value / function) and/or condition. Some metrics are based on species focussed approaches (which for example assess the quality of habitat with respect to one or more species requirements).

With the exception of the simplest ratio metrics, all have their strengths and weaknesses and are suitable for use in some situations. They therefore need to be chosen according to their purpose, following good practice principles including ensuring they result in equity in type, space and time of biodiversity and ecosystem services).

It is common practice to adjust metrics using multipliers to address a number of issues that are not normally addressed within the metric. These typically include sources of risk and uncertainty, social equity and distributional issues, desires to ensure a particular long-term outcome from averted risk offsets, and to deal with losses that are temporary.

Source: adapted excerpt from the executive summary of a European Commission study on design elements of biodiversity offsets (Rayment et al, 2014).

Birds and Habitats Directive Policy Option 2 (BHD 2): Improve the implementation of Birds Directive Article 3 and Habitats Directive Articles 3 and 10 to maintain bird populations and the coherence of the Natura 2000 network

Member States could increase their efforts to ensure their Natura 2000 sites, together with other protected core areas, provide adequate, coherent and resilient networks at biogeographical scales. Article 3 of the Birds Directive requires upkeep and management ‘in accordance with the ecological needs of habitats both inside and outside the protected zones’, whilst Article 3 of the Habitats Directive requires a ‘coherent ecological network’ to be established, under the title of Natura 2000, ‘enabling the species’ habitats concerned to be maintained’. Favourable conservation status for these species accordingly depends on their wider habitats being managed effectively. Article 3 also states that, where they consider it necessary, Member States shall endeavour to improve the ecological coherence of Natura 2000 by maintaining, and where appropriate developing, features of the

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In this context ‘currencies’ are not concerned with placing a price on biodiversity components or ecosystem services.


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landscape which are of major importance for wild fauna and flora, as referred to in Article 10.

Article 10 states that Member States shall endeavour (where they consider it necessary) to improve the ecological coherence of Natura 2000 and to encourage the management of landscape features important for fauna and flora, through land-use planning and development policies. Such features include rivers, field boundaries, ponds and small woods.

However, much of the effort in implementing the Directives to date has focused on the protection and management of Natura 2000 sites themselves, and less attention has been paid to the implementation of these Articles.

There is one example of Article 3 being upheld by the ECJ in a case against a Member State – action was taken against Ireland for failing to preserve, maintain or re-establish a sufficient diversity or area of habitats for the Red Grouse, and in one case, to avoid the deterioration of moorland habitat. The ECJ ruled that existing protection and management measures were insufficient in terms of the area covered and in the content and implementation of management planning. The ruling specifically pointed to the need for ongoing monitoring of the surrounding habitat to ensure the viability of grouse population (Kocsis-Kupper, et al, 2004).

As suggested in another study for DG Environment (IEEP/Alterra, 2010) Member States could improve the implementation of Article 10 of the Habitats Directive (and similar measures implied in Article 3 of the Birds Directive), for example through the establishment of national frameworks for assessing functional connectivity needs, and planning, integrating and implementing necessary actions, as recommended in the fragmentation guidance report for DG Environment (Kettunen et al, 2007). Significant areas of land important for BHD protected species and habitats extend beyond the Natura 2000 network, and there are currently very limited means to operationalise no net loss in this context.

Option BHD 2 would establish a framework in which Member States would be encouraged to:

Identify species and habitats of Community interest that are already impacted by, or vulnerable, to fragmentation and/or changes in suitable climate space.

Assess the functional connectivity requirements of vulnerable species and habitats, taking into account likely habitat fragmentation and climate change impacts where necessary.

Integrate functional connectivity requirements into ecological networks and generic habitat measures across the wider environment.

Implement connectivity measures through existing mechanisms, such as protected area management plans, spatial planning and SEA, agri-environment and other similar incentive payments and targeting of offsetting (see relevant policy options elsewhere below).


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5.1.3 The causal chain of impacts

BHD 1 involves three measures to enhance the application and effectiveness of appropriate assessments and compensatory measures under Article 6 of the Habitats Directive:

a. More robust and proactive systems established for identifying and screening activities with potential to impact on the Natura 2000 network. This results in more screenings being undertaken, reducing the risk that some activities that should be subject to appropriate assessment are unchecked. This may lead to an increase in the number of appropriate assessments, with the consequence that a larger proportion of potentially damaging activities are identified and that actions are taken to avoid or mitigate impacts as a result. This should enhance the effectiveness of implementation and reduce adverse impacts on Natura 2000 sites. On the other hand, more robust screening processes could also reduce instances of unnecessary assessments being undertaken, and could also help to steer proposed developments away from Natura 2000 areas and to inform the earlier identification of alternatives which do not impact significantly on the network. The process for screening activities and undertaking appropriate assessments may also benefit from synergies with new procedures under the new EIA Directive, e.g. in terms of screening criteria, scoping stage, consultation opportunities, and monitoring.

b. Guidance on compensatory measures under Article 6.4 of the Habitats Directive. Guidance would cover key principles and standards of best practice for the use of metrics for measuring impacts and the expected gains from compensatory measures. This would help to raise the standard of the compensatory measures introduced, enhancing biodiversity gains from compensation, and helping to ensure that NNL is achieved with respect to unavoidable impacts on Natura 2000 sites.

c. Enhanced capacity of EU Institutions and Member State, regional and local competent authorities and assisting organisations. This would involve increased staffing, awareness raising, training and guidance. This would strengthen the delivery of screening and scoping and increase the scrutiny of appropriate assessments, and, where necessary, the specification for mitigation and compensation measures. This would enhance the effectiveness of measures to identify, avoid and mitigate losses under Article 6.3 and to design and oversee adequate compensation measures under Article 6.4.

The impacts of options BHD 1 and BHD 2 are summarised in Figure 5-1. If implemented, they would have benefits at each stage of the mitigation hierarchy. Under BHD 1, stronger screening processes, more robust compensation requirements and greater administrative capacity would help to deter plans and projects that impact adversely on Natura 2000 sites, avoid/ reduce/ restore adverse impacts, and compensate more adequately for residual impacts. Option BHD 2 should help to enhance the resilience of the network and avoid/ reduce adverse effects from adjoining sites.


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Figure 5-1 The potential contribution of the Birds and Habitats Directive options to no net loss in relation to the mitigation hierarchy

5.2 Part 2: Identification and assessment of impacts

5.2.1 Main types of impacts

Environmental

BHD 1

Key environmental impacts relating to BHD 1 pertain to the reduced risk that damaging activities take place without appropriate assessment being undertaken, thus ensuring the greater effectiveness of the Natura 2000 network in protecting biodiversity. Implementation in the marine environment is seen to be a particularly deficient area of the BHD (Sundseth & Roth, 2013) so the production of guidance on the screening and assessment of plans and projects with potential to impact on marine Natura 2000 sites could have considerable impact in this area – as demonstrated by the examples below.

Capacity-building measures and guidance will need to focus on different levels of administration, owing to the differing ways in which appropriate assessment is integrated into regulatory frameworks – there are some promising examples of international collaboration in this regard, such as the Econat2000 network (see Box 5-3). In many countries the AA procedure is ‘integrated’ into other consent


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procedures and the decision of whether a project can proceed is typically undertaken by the competent authority responsible for the sector in question (e.g. forestry, marine energy, land use planning). In others, decision-making is more centralised at the national level. As such, capacity-building measures will need to focus on multiple levels of administration. At more local scales, impacts may relate to smaller projects, necessitating a proportional response to measuring and addressing local development impacts where these could affect nearby Natura 2000 sites. The example from Baden-Württemberg, Germany below (see Box 5-2) highlights how such risks can be addressed at the local scale without imposing substantial administrative costs.

Box 5-2 Germany example: Assessing impacts of small projects in Baden-Württenberg

In Baden-Württemberg, there are relatively few “large-scale” developments but quite frequently landowners apply for permits to build small constructions needed for their daily work. Such small constructions rarely have any long-distance impact on nature but, if situated in or next to a Natura 2000 site, they could impact adversely on the site’s integrity, especially through their cumulative effects. There is a risk that many small projects, if not assessed properly, may cumulatively erode the quality of Natura 2000 sites.

However, issuing Article 6.3 permits for lots of small projects can also place a non-negligible administrative burden on the authorities. A well-designed screening process will not only ensure a consistent approach but can also help save time and money for all concerned. With this in mind, the provincial expert body – Landesanstalt für Umwelt, Messungen und Naturschutz – published guidelines for each Natura 2000 habitat type and for each species in Baden-Württemberg describing the type of activities that may have adverse effects.

In addition, the expert body has developed an official screening form for the AA screening stage. This form (which contains detailed explanations) leads the plan or project proponents through all potential steps which could indicate possible deterioration of the Natura 2000 site(s) in question. Because the form is quite succinct (five pages) it does not represent a major burden for the proponents, and helps to streamline the work of the authorities. Another advantage is that the authorities gain records of all the small constructions underway, in a standardized and comparable way, which enables them to take into account cumulative effects of such constructions in the future and to gain organisational knowledge from the gradually growing “pool” of proposed mitigation measures for their future decision-making practice.

Source: Sundseth and Roth (2013)

Box 5-3 EU example: Econat2000 network

In 2007 ECONAT was initiated to exchange best practice regarding Natura 2000. Four organisations (partly) responsible for the realisation of Natura 2000 of different EU Member States are involved in ECONAT: Natural England (England); Rijkswaterstaat (The Netherlands); Agency for Watermanagement, Coastal Protection and Nature Conservation (Germany, Lower Saxony), and GIP-ATEN (France). ECONAT operates around an annual seminar that aims to reach a wide audience to disseminate best practice regarding Natura 2000. These best practices are developed during peer exchanges (a two or three-day event for a small number of participants from different Member States where a specific theme regarding Natura 2000 is discussed). Member State authorities are responsible for their accommodation and international travel to events, whilst hosting organisations


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provide related costs of providing facilities.

A recent evaluation of the network pointed to examples of how sharing of best practice has led to the development of exemption policies for low-risk activities, lowering the regulatory burden of the Nature Directives and freeing up resources for Appropriate Assessment in higher priority cases. Such exemptions have been developed in the UK and the Netherlands through the network. The standard practice used in England for European Protected Species (EPS) casework has been to require operators to apply for separate consents for each activity, even when the operator may undertake work affecting EPS on a regular basis and be very experienced. This has resulted in a high volume of relatively low risk casework. Natural England hopes that by applying the learning gained through ECONAT (specifically, including a ‘class license’ linked to an accreditation system) that it may be possible to reduce the European Protected licensing burden by about 2000 ‘low-risk’ cases per year. This represents a quarter of the total number of cases received each year; a saving that is a direct result of ideas seeded by the ECONAT exchange. As well as reducing the burden on industry, staff time will be freed up to focus on an increasing volume of high risk derogation work, where there is a greater chance of significant impacts, and also on compliance monitoring.

Source: Econat2000 (2010)

Guidance on compensation measures could help to address some of the existing deficiencies of these measures in addressing No Net Loss. In particular, it could help address practical issues such as measuring the equivalence of non ‘like-for-like’ compensation. The Netherlands has produced general guidance for IROPI (imperative reasons of overriding public interest). Issues considered are socio-economic, human health, public safety and the environment. Public economic interests are considered in the long term and within the overall context of benefits to Europe, and are balanced with natural values.

BHD 2

Core environmental impacts under BHD 2 relate to the capacity of the measures to contribute to more coherent and resilient ecological networks that more effectively conserve species and habitats, as for example described in Kettunen et al, (2007). Specifically, the package of guidance measures will support developers and competent authorities to better identify and address possible impacts at the network level (not just on individual sites).

It is important to note that comprehensive spatial mapping of ecosystems and related ecosystem services by Member States is underway as part of the Mapping and Assessment of Ecosystems and their Services (MAES) under Target 2 of the EU Biodiversity Strategy. In addition to mapping the spatial extent of ecosystems and related ecosystem services, efforts undertaken under the MAES will also strengthen understanding of wider environmental trends and their implications for overall ecological coherence, which could further support the development and management of ecological networks at the Member State and/or subnational levels. However, evidence suggests that ecological coherence also depends on taking account of scientific evidence of the specific needs of particular habitats and species. For example, spatial mapping was undertaken by Ecosystems Ltd (2009) to identify possible impacts from urban and rural economic growth projections on the


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resilience of the network over time. This analysis indicated substantial increases in the vulnerability of terrestrial Natura 2000 sites in Benelux countries, in northern Italy and along the French Mediterranean coast, as well as in the Nordic countries, by 2015 and 2030 as a result of growing urbanisation and the proximity of sites to cities in these regions. Targeted investments in ecological networks in these areas could help mitigate some of the impacts arising from urbanisation.

This option could also provide and enhance habitats for EU protected species outside the Natura 2000 network. This is important as a significant proportion of some species’ populations occur in the wider environment, such as farmland birds, and the recent State of Nature in the EU report indicates that a particularly high proportion of such species have an unfavourable conservation status (EEA, 2015). There are some examples of Member States implementing measures such as ‘buffer zones’ around protected areas through national law so as to support the resilience of species and habitats within Natura 2000 sites. One example of this approach being implemented effectively is in Malta (Box5-4) where buffer zones and ecological corridors have been designated by authorities. The former could be seen as a key support to Article 3 of the Birds Directive (Malta being seasonally home to a wide range of migratory bird species of European importance, and having particular development pressures owing to its population density).

There is a wealth of evidence of the ability of effective protected area networks to contribute to enhancement of biodiversity and ecosystem services (e.g. Lawton et al, 2010). However, a number of studies indicate that high biodiversity values are associated with semi-natural ecosystems, which tend to be positively correlated to other ecosystem services (such as flood risk mitigation), but negatively related to provisioning services such as crop production (Newton et al, 2012). This suggests that there may be some opportunity costs associated with the maintenance of existing semi-natural ecosystems.

With reference to BHD species, there are several examples in the EU of ecological networks focusing on conservation of a single flagship species or a group of threatened species. Examples include the Italian Ecological Network (focusing on vertebrate species) or the various flyway programmes for migratory bird species. The proposed Pan-European Ecological Network, meanwhile, could encompass some 6,099,221 km2 of ecosystems across continental Europe, although levels of commitment to deliver such a network (and capacities to deliver this) appear to vary between Member States.

Guidance could seek to integrate and build on effective network design approaches so as to maximise the overall ecological resilience of the Natura 2000 network: methodologies for development of networks tend to differ substantially owing to differing socio-cultural, geographical and economic contexts, although additional top-down guidance has been seen to be instrumental in the creation of such networks (ECNC, 2010).


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Box 5-4 Malta example: measures to increase the coherence of the Natura 2000 network

Connectivity within the Natura 2000 network is achieved in Malta in view that the boundaries of some protected areas (SCIs and SPAs) overlap and that protected areas are also accompanied by ‘buffer zones’. Malta has also designated through national law a number of scheduled/protected areas, such as tree protection areas, areas of high landscape value, areas of ecological importance and/or sites of scientific importance. Moreover, in order to ensure coherence, various mechanisms are employed, such as the screening of interventions concerning land development or interventions which may potentially disrupt the Natura 2000 network, so as to ensure no damage to the SCIs and the habitats and species for which they have been designated. This is also particularly relevant with respect to ecological corridors between fragmented areas and protected areas, such as watercourses in valleys and dry stone walls. The latter are also protected by law through legislation, such as the Rubble Walls and Rural Structures (Conservation and Maintenance) Regulations.

The issues of defragmentation and coherence have been taken into account in the development of conservation measures during the management planning exercise for terrestrial Natura 2000 sites and other management considerations. These include, for instance, the designation of Nature Reserves, the eradication of alien species, a first attempt at increasing the area covered by a phrygana species, clean-ups, research, surveillance, management of selected areas mostly in liaison with national NGOs and relevant Ministries, amongst others. Some areas have in the past also been subject to site engineering, to ensure coherence and their long-term survival.

Source: Questionnaire submitted by Malta to Evaluation to Support the Fitness Check of the EU Nature Directives

Review of international evidence (e.g. ECNC, 2010) shows significant differences in the nature and scale of integration of such approaches together with the Natura 2000 network. This has implications for the scale of investment required in different Member States and the corresponding administrative burden. Depending on the specific flora and fauna of different Member States, benefits to local biodiversity may also differ and it is likely that substantial original research and data collection will need to be undertaken.

Valuing the Benefits of BHD 1 and BHD 2

As shown in Box 5-5, the overall benefits of the Natura 2000 network in the EU have been estimated at between €200 and €300 billion annually (ten Brink et al, 2011).

http://ec.europa.eu/environment/nature/legislation/fitness_check/evidence_gathering/docs/Member%20State%20Stakeholders/Nature%20Protection%20Authorities/MT/MS%20-%20MT%20-%20NPA%20-%20EGQ.pdf



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Box 5-5 The Benefits of Natura 2000

A first illustrative estimate of the benefits from the ecosystem services flowing from the (terrestrial) Natura 2000 network as a whole was calculated in 2011 and 2011 (ten Brink et al 2011). They arrived at an illustrative value of between €200-300 billion per year across a range of ecosystem services (see below for ranges). As regards specific ecosystem services, it was estimated that the Natura 2000 network stores around 9.6 billion tonnes of carbon, equivalent to 35 billion tonnes of CO2. This was estimated to be worth between €607 billion and €1,130 billion (stock value in 2010), depending on the price attached to a tonne of carbon (Ding, Markandya, Nunes in ten Brink et al 2012). Further details are given below also for tourism and recreation, assessed in a parallel study (Bio et al, 2011). These estimates are an assessment of the current benefits flowing from the ecosystems within Natura 2000 sites - as noted above, any cost of inaction or any cost of non-implementation would therefore relate to a share of the values below, not the whole as some services would still flow despite biodiversity loss and degradation. It is useful to note that a 1% loss in the value of the Natura 2000 network would be equivalent to around €2 to 3 billion/year in lost benefits. These benefits would accumulate over time, resulting in accumulated loss of annual benefits of €28-42 billion by 2030.

Benefit Numbers

Natura 2000 network total benefits

~ €200 - 300 billion/year

Building on 3 estimates (different assumptions):

€223 – 314 billion/year (a)

€251 – 360 billion/year (b)

€189 – 308 billion/year (c)

Carbon sequestration/ storage

Current Stock: €600 billion - €1,130 billion

Annual Sequestration Benefits:

€79-88 billion increase to 2020 if ecosystem quality is improved;

€82-92 billion to 2020 if a 10% increase: forest area.

Tourism expenditures

~€ 50-85 billion /year for 1.7 billion visitor days

(~466,000 visitors/day average)

~€ 9-20 billion/year directly for Natura 2000

Recreation

(non-market benefits)

~€ 5-9 billion/year for Natura 2000 (€4 / visit )

Source: Ten Brink, et al (2011) The costs and socio-economic benefits of the Natura 2000 network. A report to the European Commission, DG Environment.


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The ten Brink et al estimate gives a first order assessment of the overall, gross benefits of Natura 2000 sites at EU level, in terms of the overall benefits of the ecosystem services they deliver.

Evidence of the value of the benefits of specific actions under the articles of the Birds and Habitats Directives are lacking. However, an indicative assessment of the potential overall benefits of BHD 1 and BHD 2 can be made with reference to the ten Brink et al estimates.

The analysis presented above indicates that Natura 2000 faces a number of pressures from development, land management and adjoining land uses. These pressures threaten to cause a gradual erosion of the benefits that the network offers. The provisions of the Directives aim to safeguard against such effects but are not being fully and adequately implemented at present. BHD 1 and BHD 2 contain actions designed to maintain the integrity and coherence of the network and the features that it protects, and therefore the value of the services it delivers.

Based on annual benefits estimated at €200-300 billion in 2015:

A 0.5% annual loss of ecosystem services would result in losses of annual services of €5-7 billion by 2020 and €15-22 billion by 2030

A 1% annual loss of ecosystem services would result in losses of annual services of €10-15 billion by 2020 and €28-42 billion by 2030

A 2% annual loss of ecosystem services would result in losses of annual services of €19-29 billion by 2020 and €52-78 billion by 2030.

These figures do not represent a baseline scenario of biodiversity loss. They are used to illustrate the point that, because of the scale of overall benefits of the network, even a small marginal reduction of these benefits would have a substantial impact over time. The benefits of BHD 1 and BHD 2 in protecting the value of services delivered by the network can therefore be expected to exceed the costs (described below) even if they have a small net effect in protecting the network.

Economic

BHD 1

The following main types of costs can be identified in the delivery of BHD 1:

1. Investments in capacity and systems for screening proposed activities with regard to the need for appropriate assessment.

2. The costs of undertaking appropriate assessments, which include financial costs (such as professional fees and survey costs), opportunity costs linked to procedural delays or relocation of developments, as well as administrative burdens.


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3. The costs of producing and disseminating guidance on compensation requirements for impacts on Natura 2000 sites under Art 6 (4) of the Habitats Directive.

4. Increased costs of delivering compensation actions to ensure no net loss, reflecting enhanced guidance.

These costs are assessed in turn as follows.

1. Capacity and systems for screening

Structured and efficient systems for screening help to ensure that appropriate assessments are undertaken for all plans and projects for which there is a risk of significant impact on a Natura 2000 site. They can also reduce costs by reducing the number of unnecessary AAs undertaken, and by identifying alternative solutions at an early stage. Ideally, this should be undertaken by an authority with relevant capacities and the ability to support early policy revisions, such as the example from Malta in Box 5-6:

Box 5-6 Malta example: preliminary assessment through screening

Subject to preliminary evaluation by the Competent Authority (Malta Environment and Planning Authority - MEPA), relevant plans and projects are subject to an AA, to identify alternative solutions to ensure that the proposals in draft plans and specific projects do not adversely affect Natura 2000 sites. Avoidance and mitigation of possible significant adverse impacts on Natura 2000 sites is the preferred option, and no proposal has yet arisen for which imperative reasons of overriding public interest were considered to justify adverse impacts on a Natura 2000 site.

During the past two years (2013 – 2014), 41 projects were screened in view of their possible impacts on Natura 2000 sites, of which 36 were determined to have no significant impact on the integrity of the SAC and its habitats. 5 detailed AAs were requested and case-specific Terms of Reference were issued for the carrying out of such studies. During this period, no detailed AAs were carried out on plans and policies, since the main concerns raised through AA screening were addressed through policy revisions or because the plan-making process was delayed or halted.

Source: Questionnaire submitted by Malta to Evaluation to Support the Fitness Check of the EU Nature Directives

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While some Member States have well developed systems for screening plans and projects for appropriate assessment, others would benefit from investments in capacity to improve screening processes.

Requirements are likely to vary between Member States, but may include:

national guidance for authorities and developers on the screening of plans and projects for appropriate assessment;

training and awareness raising among planning and permitting authorities;

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development of IT systems, decision tools and mapping tools; and

employment of specialist advisers at Member State level.

The scale of action required is difficult to estimate precisely, and no existing estimates are available on which to base an assessment. The actual costs would vary widely by Member States, according to their size, administrative structure and scale of development activity.

2. Effects on numbers of Appropriate Assessments

Improved screening processes can be expected to influence the number of AA undertaken across the EU, and the associated costs and administrative burdens. There is potential for better screening either to reduce or increase the numbers of AAs undertaken, by:

requiring AAs to be undertaken for a larger number of plans and projects with potential to affect Natura 2000 sites; while

reducing the need for AAs in some circumstances, through better identification of projects without significant impacts, as well as earlier consideration of alternatives. Examples in the Nature Directives Fitness Check demonstrate that early identification of potentially problematic schemes could significantly reduce costs in the longer term, by encouraging alternative options to be developed.

Thus while enhanced screening systems could increase the number and costs of AAs, this effect and its net economic impacts are uncertain.

The report by Sundseth and Roth (2013) pointed to a very small proportion of development proposals in the EU being subject to appropriate assessment, and in most cases, these proposals are allowed to proceed. The authors cautioned that this was based on partial information and the perceptions of authorities.

However, some qualitative evidence is available of the administrative burdens associated with Art 6.3. AA creates an administrative burden for both developers and competent authorities that could be expected to vary according to changes in the number of assessments undertaken under BHD 1.

As Sundseth & Roth (2013) note, it is difficult to estimate the existing administrative burden of AA in any objective way, in part because of the influence on contextual and site-specific features on the overall cost of assessment (i.e., a similar project can have very different impacts on different Natura 2000 sites) and the fact that in most cases, AA is integrated within the EIA procedure. Whilst the costs of EIA generally increase as a function of project size, costs of AA are more sensitive to the specific geography of the Natura 2000 features in question.

A study by Backes et al (2007) concluded that the application of Article 6 in the Netherlands rarely resulted in the rejection of a development planning request.


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Projects were often delayed, but in most cases only on formal grounds, because the legally required AA had not been carried out, or had been carried out only partly or poorly. With the exception of one case reviewed by the authors, all project development requests had been given a permit in the end. The study concluded that, although Article 6 has by now been transposed reasonably well in most countries, this has taken a considerable period of time in almost all the countries and has led to the unnecessary friction, including litigation in the European Court of Justice. In many countries, Article 6 has led to much commotion and heated discussions. However, the interests of nature conservation have been given a clearly more distinct role in decision-making and are not easy to push to one side.

Evidence from the UK suggests that whilst in general AA does not prevent developments from proceeding (HM Government, 2012), there may nonetheless be substantial opportunity costs in certain sectors and locations. The UK review gave the example of an offshore windfarm development that was unable to proceed because of concerns about impacts on sea ducks, while also noting that major and more complex infrastructure developments in particular (such as in the transport, ports and energy sectors) can face costs and delays as a result of the Nature Directives. However, there is little evidence that the Nature Directives affect the overall rate of development in the EU as a whole – it is more likely that they direct development to more suitable locations, with possible related relocation and opportunity costs.

More importantly, enhanced screening can be expected to have a positive impact on the benefit-to-cost ratio for each and every AA which gets undertaken. A number of Member State examples evidence the types of costs associated with different approaches, as well as the scope for gains in efficiency through improved implementation of appropriate assessment. The Sundseth and Roth (2013) report presents further evidence from an online survey, which found that the majority of projects are screened out because they are considered not likely to have a significant effect on Natura 2000 sites. Of those that do go through a full AA, most are approved because the AA concludes that there is no adverse effect. The majority of the rest are reworked or redesigned and then approved. Only a small proportion of projects are actually abandoned because the AA has concluded an adverse effect and even fewer use the derogation procedure under Article 6.4.

An assessment of the administrative burden associated with the Dutch Nature Protection Law was presented in the Dutch response to the Fitness Check on the Nature Directives. The study identified annual costs to businesses and citizens associated with the implementation of the Nature Protection Law (Table 5-1). The main administrative cost to business is reportedly a consequence of the obligation of obtaining permits related to the protection of Natura 2000 sites. This is a direct consequence of the implementation of the Habitats Directive, article 6.2/6.3. Costs to business relating to this process were estimated at €39 million per year. A large proportion of the costs are due to the costs of ecological surveys. These surveys are mandatory in the process of applying for a permission or exemption under Dutch nature legislation. In some cases these costs can be relatively high, especially for small enterprises with relatively small projects.


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Table 5-1 Annual costs (2015) associated with the Nature Protection Law, Netherlands

Annual costs for enterprises Annual costs for citizens Cost elements

Administrative burdens

Compliance costs

Supervision/ control

Administrative burdens

Compliance costs

Supervision/ control

Present (2015)

€39,120,000 €16,130,000 € 711,700 € 3,560,000 €7,058,400 € 24,800

Source: Questionnaire submitted by the Netherlands to Evaluation to Support the Fitness Check of the EU Nature Directives

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Sundseth and Roth (2013) identified the following factors that influence the costs of appropriate assessment procedures:

the size and nature of the plan or project;

the nature and sensitivity of the Natura 2000 sites and their features;

the availability of information on the site and its target features;

the quality of the assessment and level of dialogue and consultation early in the decision making process

public opinion; and

inefficient and inconsistent AA procedures.

Administrative capacity, guidance, training, sharing of information, and consistent frameworks were found to be important in reducing costs. In some countries (e.g. Austria, Czech Republic, Slovenia, Spain, Sweden), it was reported that there is still an overall lack of understanding of, or willingness to accept, the Article 6.3 procedure amongst certain authorities and/or sectors. This has caused difficulties in implementation and led to more frequent delays, inconsistencies in application and frustrations amongst developers, authorities and NGOs.

The impact of such delays on overall project decision-making timescales, and therefore on opportunity costs, can be substantial. Farmer et al (2015) examined decision-making timescales across the EU in relation to AA of a range of infrastructure projects in various Member States. These are summarised in Figure 5-2 and point to an average of 717 days per project, for the projects examined, although it was noted that this sample was unlikely to be representative.

Sundseth and Roth (2013) considered that such issues are especially a problem at a lower administrative level (especially in countries with federal structure) and in countries where the competent authority is not the nature authority. In such cases there can be a lack of skills, resources and basic understanding of the requirements of the Article 6.3 procedure which renders its application more problematic and inefficient. Encouraging a more constructive dialogue between the plan and project proponents and their counterparts in the nature authorities was emphasised as one of the key factors to help improve the AA procedure.

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http://ec.europa.eu/environment/nature/legislation/fitness_check/evidence_gathering/index_en.htm

http://ec.europa.eu/environment/nature/legislation/fitness_check/evidence_gathering/docs/Member%20State%20Stakeholders/Non-Govermental%20Organisations/NL/MS%20-%20NL%20-%20NGO%20-%20EGQ.pdf

http://ec.europa.eu/environment/nature/legislation/fitness_check/evidence_gathering/docs/Member%20State%20Stakeholders/Non-Govermental%20Organisations/NL/MS%20-%20NL%20-%20NGO%20-%20EGQ.pdf


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Another major issue is a lack of underpinning knowledge to inform assessments, including information on conservation objectives, structure and functioning of habitats. As highlighted in the Dutch response to the BHD Fitness Check (see Box 5-7) in many cases ecologists do not have sufficient ecological knowledge to assess if a plan or project has significant negative effects. However, especially in cases where there are conflicts of interests that lead to court cases, the precautionary principle prevails. The problems of assessing the (significance of) effects and impacts of plans cause uncertainty for enterprises and citizens. If there were more clarity regarding these thresholds, it is also possible to limit the necessary assessments to those areas where a significant effect cannot be excluded.

Enhanced implementation of the Directives therefore offers the potential to reduce delays and additional costs emerging from additional data requirements. Surveys undertaken by the UK Department for Environment, Food and Rural Affairs as part of its review of the Birds and Habitats Directives in the UK (HM Government, 2012), indicated that changes to evidence requirements, particularly late in the process, were perceived as contributing substantially to costs and delays with minimal additional benefits to the environment.

Figure 5-2 Decision-making timescales (days)

Source: Farmer, et al 2015

128

730

1460

610

730

793

305

976

717

0 200 400 600 800 1000 1200 1400 1600

NL Energy production

SP Port masterplan

SP Port masterplan

EN Recreation access/infrastructure

EN Recreation access/infrastructure

EN Large mixed-use development

MT Energy production

MT Road junction

Average (mean)


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Box 5-7 Netherlands example: plan adjustments and Natura 2000

In general, the Nature Directives is thought to provide a good framework for the coordination of the involved societal interests, including biodiversity. The majority of the projects involving biodiversity legislation run smoothly, depending on the complexity of the project. In ‘clear-cut’ cases the framework supports decision making on plans and projects in relation to the protection of BHD-values. Veen et al (2011) found that in 2010 4.5% of the exemptions of the Flora and Fauna Act were refused, mainly because of lack of research and only 0.5% was refused because of endangering the favourable conservation status of protected species. The exemptions of the Nature Conservancy Act are granted in 95% of the cases. Elements are usually rejected because insufficient data are provided. Analysis by Royal Haskoning DHV (2013) shows that the largest share of projects can be realised by project or plan adjustments (by adding or removing plan elements, spatial and temporal optimization of the plan, ecological optimization of the design, or increasing the mitigation). However, in more complex projects involving many stakeholders and in which many interests and societal objectives are at stake, the Nature Directives -framework appears very strict in its application. This complicates the preparation and implementation of those plans and projects.

Source: Questionnaire submitted by the Netherlands to: Evaluation to Support the Fitness Check of

the EU Nature Directives32

3. Costs of guidance on compensatory requirements

The development and dissemination of EU guidance on compensation requirements under Art 6.4 of the Habitats Directive would involve one-off costs in the range of 0.1 to €0.3 million – this estimate is derived from previous costs of developing EU-level guidance on issues such as Natura 2000 financing, with some additional costs anticipated in relation to sourcing research on technical aspects of ecological disturbance and restoration. It is noted that the costs of developing and issuing guidance can vary widely depending on the scope and content of the guidance and the extent of technical work required.

This would cover the costs of developing and publishing guidance, EU level workshops/ dissemination events, and publications and communications at the EU and Member State levels.

4. Costs of compensatory measures

Evidence collected by Sundseth and Roth (2013) and Conway, et al (2013) indicates that practical cases of compensation measures being required are few in number, at around 20 cases per annum. This was sourced from a 2008 survey of Member States but in practice actual use of compensation measures can be expected to be low – so this figure is unlikely to have changed substantially.

Conway et al (2013) estimated that these 20 cases affect around 30 Natura 2000 sites and damage approximately 8,200 ha of habitat each year (0.05% of the Natura

32

http://ec.europa.eu/environment/nature/legislation/fitness_check/evidence_gathering/index_en.htm


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2000 network33). The estimated 8,200 ha of compensation represent around 10% of the land in the EU converted to artificial surfaces each year (86,000 ha). They further estimated that these losses (and other land transformation) could give rise to demand for compensation of up to 50,000 ha per annum, based on an average compensation ratio of 6:1.

However, they noted that this compensation does not necessarily achieve no-net-loss, as there may be a need for better metrics (see Box 5-1 above), tools and guidance to determine the level of compensation that should be required.

Projections of the rate of growth of urban areas suggest that these are expected to remain relatively stable to 2020 and beyond. Assuming that the area of compensation for damage to Natura 2000 continues at 50,000 ha per annum, with compensation costs that typically average €20,000-60,000 per ha (based on the review of evidence in chapter 14), gives annual costs of around €1-3 billion per year across the EU28 under a BaU scenario.

The degree to which compensation requirements would have to increase to achieve no net loss is unclear. This would depend, inter alia, on the extent to which the NNL hierarchy will be applied. No estimates are currently available of the extent to which current compensation falls short of that required to achieve no net loss, so only an illustrative assessment can be made. However, if it was assumed that there was a 20% increase in the average annual compensation requirements (i.e. to 60,000 ha per year) as a result of the application of more rigorous metrics, this would increase annual costs of compensation by €200 – 600 million. These figures are largely indicative, but suggest that the additional cost impacts of improved compensation under BHD 1 would be relatively low, assuming a relatively static nature of compensation demand over time. These costs would affect a small proportion of overall development activity and represent a minor proportion of overall project development costs, amounting to 0.01-0.04% of annual turnover of the EU construction industry34.

BHD 2

Immediate costs relate to addressing the data and knowledge gaps relating to the status and functioning of protected area networks at national and regional levels, including requirements for additional research. Secondary costs include modification of existing planning and development control frameworks to include ecological networks.

Finally there are costs associated with undertaking ecological restoration work. These costs could be expected to change over time: whilst administrative and knowledge acquisition costs relating to the establishment of networks are likely to occur in early years, these could be expected to fall over time (2020/2030). Costs for

33

On the basis of total compensation requirements often being larger than the impacted area 34

The turnover of the EU construction sector is estimated at EUR 1,600 billion annually - http://www.ebc-construction.eu/index.php?id=3


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ecological restoration could rise in later years as compensation for residual impacts becomes more sophisticated.

Planning costs

BHD 2 would involve the development of national frameworks designed to enhance the connectivity and effectiveness of ecological networks and to reduce fragmentation. Costs would include additional research and evidence needs, mapping work, development of information and decision tools, consultation, spatial planning, and integration of outcomes into relevant strategies and plans. These actions would require more resources to be devoted to management planning and relating activities to support the Natura 2000 network.

Gantioler et al (2010) estimated that the costs of management planning and related activities associated with the implementation of the Natura 2000 network amount to around €1.1 billion per annum (including annualised one-off costs and recurrent costs). These estimates are not precise, but, based on questionnaire returns from Member States, are the best available estimates. BHD 2 would require additional investments in planning activities to identify the actions necessary to enhance the resilience and coherence of the network.

Assuming a 20% increase in management planning costs compared to the Gantioler et al estimates, to extend planning frameworks to enhance the wider coherence and resilience of the network, would increase annual costs by €220 million. A similar level of annual costs can be expected to 2020 and 2030, as management plans are renewed and updated over time.

Benefits of BHD 2 relate to its ability to foster greater ecosystem resilience and a corresponding increase in ecosystem service benefits. Understanding the impact of ecosystem resilience and coherence on ecosystem service benefits is an inherently complex undertaking but there have been a number of recent attempts to estimate the economic impacts of enhanced ecosystem resilience that could have some relevance to BHD 2. Baumgartner and Strunz (2014) for example have analysed ecosystem resilience in terms of the ‘insurance value’ of an ecosystem’s ability to maintain its basic functions and controls under disturbances – decreasing the probability of future drops in the provision of ecosystem services and insuring ecosystem users against potential welfare losses. Given that the network is thought to provide overall benefits of between €200 - €300 billion per year to a wide range of beneficiaries (Ten Brink et al, 2011), this ‘insurance value’ can be expected to be considerable.

Land management costs

BHD 2 would also involve land management activities around Natura 2000 sites, designed to enhance the coherence of the network. This would be expected to result in some habitat restoration work, as well as sympathetic management of the land adjoining and connecting Natura 2000 sites, financed through agri-environment


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and woodland management schemes, as well as Member State nature conservation measures.

The cost of these measures would depend on the scale and ambition of the activities undertaken. This is difficult to estimate as there is no available evidence of the extent of habitat management action required adjacent to the network to enhance its ecological coherence. Therefore only an illustrative estimate of costs can be made. It is likely that the area subject to habitat management work would be less than that covered by management planning activities. A 10% increase in habitat management and monitoring activities in targeted areas adjacent to the network could be expected to significantly enhance its coherence. The Gantioler et al estimates put the costs of habitat management and monitoring work to implement the Natura 2000 network at approximately €3.1 billion per annum across the EU. If BHD 2 increased these costs by 10%, through the extension of habitat management activities to adjacent areas, this would amount to €310 million per annum.

Social

BHD 1

Social impacts from BHD 1 largely relate to a range of non-market benefits (enhanced biodiversity and ecosystem services), greater equivalency of compensation measures in terms of ecosystem services lost and gained, and greater opportunities for input to decision-making processes. An increase in employment opportunities within public authorities can also be expected with the range of capacity-building measures outlined – this would be additional to those people currently employed in connection with the Natura 2000 network. The measures could be expected to result in an initial increase in employment within authorities which would stabilise over time as knowledge is consolidated and assessment processes become more efficient.

Based on estimates by Jurado, et al (2011) that every €1 billion of investment in the Natura 2000 network generates 29,900 additional FTE jobs, the €428 million of additional defined costs for BHD 1 (i.e. not including costs relating to Appropriate Assessment) could yield employment benefits in the region of 12,000 additional FTE jobs.

BHD 2

Social impacts relating to BHD 2 pertain to potentially substantial increases in employment relating to the design, implementation and monitoring of wider ecological networks. This could entail a range of employment opportunities across the public and private sector and could have particular impact to Europe’s rural and coastal economies. Those Member States and regions that have not implemented such networks stand to benefit the most from the measures under BHD 2 in this instance. More connected networks could have a range of social benefits through enhanced ecosystem services, recreation, health and landscape benefits.


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Extending the indicative expenditure estimates for BHD 2 developed above, large-scale implementation of the suite of measures proposed under BHD2 could be expected to yield substantial increases in employment, albeit a mix of low-skilled and higher-skilled jobs. Using the basic multiplier of 29,900 jobs per €1 billion of additional expenditure against costs for BHD 2 of €530 million gives 15,900 additional direct and indirect jobs arising from the package of measures under BHD 2.

5.2.2 Synthesis: Who is affected, how and why?

Who faces costs?

Under BHD 1, additional costs are primarily borne by developers, as well as authorities (through additional capacity requirements), in the form of increased compensation requirements to meet NNL objectives, although the introduction of standardised metrics could lead to time savings to developers. Increased requirements for AA could also be expected to result in additional costs to developers.

Costs associated with BHD 2 fall largely on public authorities; this includes the substantial capital costs of ecological restoration in some cases and the costs of ongoing management and monitoring. Additional data needs may be considerable, and this could entail commissioning of research. There could also be opportunity costs to society from the loss of agricultural production to measures necessary to maintain ecological networks, as well as additional costs relating to investment in agri-environmental measures.

Who benefits?

Both developers and authorities stand to benefit from greater clarification of screening requirements. Additional time savings could be yielded through the revision of screening measures, which has the potential to substantially cut the direct and indirect costs of delays to developments. Local communities, as well as society as a whole also benefit through greater equivalency of ecological losses and gains through compensation measures as well as stronger implementation of avoidance measures.

Analysis of existing studies (e.g. Sunset and Roth, 2013) suggests that the opportunity costs relating to delays and modification of projects are substantial – both in direct costs to developers and in wider opportunity costs to society. To the extent that enhanced screening procedures and enhanced processes for implementation and oversight of appropriate assessment improve certainty and streamline procedures, they have the potential to reduce these costs significantly.

5.2.3 How significant are these impacts?

The BHD Implementation Review undertaken by the UK Government (HM Government, 2012) and other EU-wide studies (eg Farmer et al, 2015; Sundseth & Roth, 2013) indicates that major issues with regard to the implementation of the Nature Directives stem from the lack of consistent approaches to AA, compensation


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measures and integration within wider strategic landscape planning, as well as a general lack of capacities in many cases. These reviews indicate that whilst in general implementation of the BHD is working well, there is scope for significant cost savings through better implementation in these specific areas, which could also secure stronger environmental outcomes.

This would seem to suggest there could be substantial benefits from the measures. The package of measures outlined here offers the potential to address a number of commonly-cited deficiencies in the Directives to deliver on conservation objectives for the Natura 2000 network, as well as wider conservation of biodiversity and ecosystem services. By increasing the efficiency of these processes they also have potential to free up additional resources for more targeted conservation actions. This suggests that more cost-effective implementation could enhance the benefits derived from the network while entailing some significant extra costs, but securing a range of potential efficiencies and cost savings.

5.3 Part 3: Synthesis

5.3.1 Overview of impacts associated with implementation of options

Table 5-2 and Table 5-3 summarises the overall impacts of BHD 1 and BHD 2. Both Birds and Habitats Directive measures offer the potential to address major deficiencies in the implementation of the Nature Directives. BHD 1 in particular is likely to promote greater observance of the mitigation hierarchy, earlier consideration of project alternatives and modification and accordingly should help minimise the often substantial costs of delays and modifications of projects late in their development. This is weighed against additional costs to public administrators. Ensuring better metrics for compensation and mitigation works is one relatively inexpensive means of encouraging stronger adherence to the mitigation hierarchy and provides greater clarity to developers.

Costs associated with BHD 2 measures are likely to be more substantial, owing to the need for original research and planning work, revision of existing regulatory frameworks and ecological restoration work, which in some areas might be more technically challenging or costly. Benefits, whilst strong in principle, are inherently more uncertain owing to differences in the scale and function of ecological networks between regions. Evidence from existing Member States examples shows that the cost of developing and maintaining protected area networks largely falls to public authorities and there are few examples of the private sector contributing to these costs in any meaningful way.


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Table 5-2 Overview of potential costs and benefits and who would be affected

Option Estimated costs Who will be affected by increased costs

Estimated benefits Who will benefit

(BHD 1): Improved and wider appropriate assessments and compensatory measures for unavoidable impacts, including improved metrics

Costs of issuing guidance and associated communications and engagement actions will vary strongly among the Member States depending on their size, administrative structure and scale of development activity – see text above), although administrative costs can be expected to fall over time with increasing familiarity amongst developers and authorities

Costs of increased use of Appropriate Assessment

Additional costs of delivering compensatory actions (illustrative estimate of €200-600 million per year – see text above)

Public authorities will require increased resources to assess a larger volume of developments

Developers will face increased costs to comply with strengthened requirements

Helps to maintain benefits of Natura 2000 network valued at €200-300 billion annually

Ecosystem service benefits can be expected to increase over time with increasing capacities, tools and familiarity with AA, screening and offsetting

Fewer delays and costs relating to inadequate consideration of potentially significant impacts at project design stage

Reduced opportunity costs relating to project delays or modifications

Increased scope for engagement between developers, authorities and stakeholders

12,000 additional FTE jobs

Society as a whole benefits through the safeguard of valuable ecosystem services and earlier observance of the mitigation hierarchy

Developers due to greater clarity of expectations and possibility to adjust development plans accordingly at an early stage, resulting in reduced delays and modifications later in the development phase

(BHD 2): Improve the implementation of Birds Directive Article 3 and

Costs relating to data acquisition, research and planning (illustrative estimate of €220 million per

Developers could incur additional costs, particularly where restoration work is costly or technically difficult

Helps to maintain benefits of Natura 2000 network valued at €200-300 billion annually

Strong increase in

Society as a whole benefits through the enhancement of valuable ecosystem services and earlier observance of


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Habitats Directive Articles 3 and 10 to maintain bird populations and the coherence of the Natura 2000 network

annum increase on established costs for Natura 2000 – see text above).

Costs relating to land management (illustrative estimate of €310 million per annum increase on established costs for Natura 2000 – see text above)

Public authorities are likely to incur additional administrative costs relating to necessary capacity-building and revision of planning frameworks (which could be expected to decrease with greater maturity of the network and fewer requirements for original information)

Society as a whole will be impacted by the loss of agricultural production in some areas

employment (circa 15,800 jobs created)

Will encourage developers to consider wider impacts on biodiversity, including threats to the coherence of the Natura 2000 network.

Strengthened implementation of the mitigation hierarchy

Wider ecosystem service benefits (e.g. Flood risk management)

the mitigation hierarchy

Specialist ecological restoration consultancies benefit from increased opportunities

Society as a whole benefits from greater access to and awareness of ecosystems services

BHD 1 & 2 Overall benefits of BHD 1 and BHD 2 could equate to €5-7 billion annually by 2020 if they averted 0.5% annual loss of ecosystem services

Overall benefits of BHD 1 and BHD 2 could equate to €15-22 billion annually by 2030 if they averted 0.5% annual loss of ecosystem services


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Table 5-3 Overview of potential impacts of options associated with the Birds and Habitats Directives

Beneficial change Neutral Detrimental change

↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual Birds and Habitats

Directives

Baseline: study context (BaU)

BHD1 BHD2 Comb-ined

Incremental benefit

Overarching: meeting objectives: Addressing BD/ESS loss; contributing to NNL/Net positive gain; and enforcing the mitigation hierarchy

Estimated magnitude of change, ↗↗↗↗↗ = Completely meet the objective, ↗↗↗↗ = close to completely meeting the objective, ↗↗↗ = Moderate but substantial contribution, ↗↗= Small contribution, ↗ = Minor

contribution (key/criteria to be defined issue by issue in the context of the assessment).

Addressing the problem/challenge - biodiversity & ESS loss (i.e. wrt BD in EU) and contributing to NNL / net positive gain

Significant biodiversity and

ecosystem service loss ongoing - i.e. Net Loss

↗↗↗ ↗↗↗ ↗↗↗

Enforcing the mitigation hierarchy

Principle broadly committed to,

but not fully implemented ↗↗↗ ↗ ↗↗↗

Environmental changes: Biodiversity and habitats

Estimated magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change (key/criteria to be defined issue

by issue in the context of the assessment)

Biodiversity & habitats (direct and indirect)

Widespread and significant

Biodiversity loss ↗↗↗ ↗↗↗ ↗↗↗

Economic and financial: Costs and benefits: Administrative costs (at EU and MS level); Financial costs (one-off); Financial costs (recurrent); Opportunity costs (uncompensated); Economic

Benefits from ecosystem services (costs are presented with downward arrows (to reflect increasing burden), benefits up)

Tens or hundreds of thousands of Euros -; Millions ↘; Tens of millions ↘↘; Hundreds of millions↘↘↘; Billions↘↘↘↘ ; Tens of Billions ↘↘↘↘↘


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Economic Benefits from ecosystem services

Significant erosion of ESS widespread across the EU

↗↗ ↗↗↗ ↗↗↗

Administrative costs (at EU and MS level) (downward arrows means increased burden)

No baseline estimated on the Economic and financial costs

↘↘ ↘↘↘ ↘↘↘

Financial costs (one-off) ↘↘↘ ↘↘↘↘ ↘↘↘

Financial costs (recurrent) ↘↘ ↘↘↘ ↘↘↘

Opportunity costs (uncompensated)

↘↘ ↘ ↘↘↘

Social: Costs and benefits: Number / quality of jobs generated; Access to nature and Health benefits / quality of life; and Equity and future generations

Social (Magnitude key as Environmental above) arrows indicate a detrimental change. Estimated magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ =

Moderate but substantial change, ↗↗= Small change, ↗ = Minor change

Number / quality of jobs generated

No baseline estimated on jobs ↗↗ ↗↗↗ ↗↗↗

Access to nature and Health benefits / quality of life

Access to nature variable, and affected by overall loss of biodiversity, but range of efforts to increase access underway across the EU. Insufficiency for certain

communities.

↗↗ ↗↗↗ ↗↗↗

Equity and future generations (builds on BD and ESS availability, health etc.)

Loss of biodiversity and significant erosion of ESS widespread across

the EU will persist for future generations - raising equity

concerns.

↗↗↗ ↗↗↗ ↗↗↗

Governance: Clarity, Measurability, Practicality/feasibility, enforceability and Coherence with SD and other policies

Governance (Magnitude key as Environmental above) Upwards arrows indicate a beneficial change with respect to current conditions. Downward arrows indicate a detrimental change. Est. magnitude of change,

↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change

Clarity

No baseline estimated on governance

↗↗↗↗ ↗↗ ↗↗↗↗

Measurability ↗↗↗ ↗↗ ↗↗↗

Practicability / Feasibility ↗↗ ↗↗ ↗↗


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Enforceability ↗↗↗ ↗↗ ↗↗↗

Coherence with SD and other policies

↗↗ ↗↗↗ ↗↗↗

5.3.2 How do the measures contribute to the four key policy clusters?

The proposed BHD revisions are part of the baseline that supports better implementation, evidence based policymaking and good governance while respecting Member State subsidiarity. Both BHD 1 and BHD 2 focus on enhanced implementation of existing rules, in order to maximise their benefits and improve consistency of implementation across the EU.

BHD 1 in particular is linked to the principle of strengthening information and monitoring within assessment of potential impacts, as well as the development of common best practice with regard to ‘exchange rules’ for offsetting whilst respecting the different regulatory and planning systems in place within and between Member States. BHD 2 offers the potential to maximise wider landscape-level monitoring and management as a means to help improve the resilience of the network and provide a wider range of benefits.

Table 5-4 Summary of the relationships between the policy measures and the four key policy clusters

Key: X = major relevance to the priority; x = minor relevance to the priority

Policy option 1: Better Implem.

2: EU funds added value

3: Governance Info, guidance

4: Subsidiari

ty

A: B&H directives

B: Wider policies & tools

A: Evidence

based policy

making

B: Guidance

for implement

ation

BHD 1: Improved and wider Appropriate Assessments and compensatory measures for unavoidable impacts

X x X


X X x


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6 IMPACTS OF NNL MEASURES: THE ENVIRONMENTAL LIABILITY DIRECTIVE


6.1.1 Introduction

The purpose of the Environmental Liability Directive (ELD) is to establish a framework of environmental liability, based on the polluter-pays principle, to prevent and remedy environmental damage. The strict liability standard of operators is based on a list of dangerous activities, including for example industrial activities covered by the Industrial Emissions Directive (IED), waste management activities, use, transport, and discharge of dangerous polluting substances, un-authorised discharges into surface or groundwater, and transport of dangerous substances.

While biodiversity resources are included in the definition of ‘environmental damage’ in the ELD, exactly which habitats and species this covers depends partly on the transposition of the Directive by a given Member State. The ELD text requires that it covers some habitats and species specifically protected by the Birds and Habitats Directives. Member States can choose to extend this definition to include biodiversity protected under national laws. Doing so may introduce some inconsistency between the impacts covered by the ELD in different Member States, but this may be appropriate to reflect their different biodiversity and ecosystem protection priorities.


Environmental Liability Directive Policy Option 1 (ELD 1): Enhancement of the implementation of the Directive, through awareness raising, improved guidance and enforcement

The ELD may be strengthened by ensuring harmonisation and clarification of concepts of the ELD, such as:

The threshold for classification of ‘significant biodiversity damage’35, and

Activities constituting appropriate preventive and/or remedial measures.

These considerations align with recommendations from Milieu Ltd. and IUCN’s report to the European Commission (Milieu and IUCN, 2014), which found, through analysis of 10 Member States’ environmental liability regimes, that ambiguity of these concepts has affected the number and type of reported ELD cases (for Member States who have provided data, a summary of the types of environmental damage within ELD cases is provided in Table A.1 of Annex 1.1). This has therefore led to a non-harmonised implementation of the Directive, impacting its ability to be effective in relation to its objective of halting biodiversity loss. Clarification and harmonisation of key concepts can therefore mitigate this discord, strengthening the impact of the Directive.

35

This is measured drawing on the definition of favourable conservation status under the Habitats Directive; that damage exceeds natural variations and will not recover in a short space of time. In practice data availability is often a limitation on accurate assessment of these criteria.


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Environmental Liability Directive Policy Option 2 (ELD 2): Extension and clarification of damage significance threshold to reflect NNL policy objectives

The ELD’s influence may be strengthened through clarification of the Directive by the Commission, and through Member State action to extend and clarify the significance threshold for damage, and/or the imminent threat of damage, caused by occupational activities. Clear guidance on what constitutes significant damage would improve ELD implementation (and could be part of policy Option ELD 1). As it stands, some countries such as Denmark, France and Slovenia understand significant damage as severe, almost catastrophic cases, while others such as Germany and Poland consider any biodiversity damage beyond normal variations to be significant. Clarification of the significance threshold is therefore necessary, and an opportunity also exists to strengthen ELD’s contribution to NNL by linking this definition of ‘significance’ to the definitions of NNL of biodiversity being developed in implementing the EU biodiversity strategy.

Environmental Liability Directive Policy Option 3 (ELD 3): Extension of coverage of the Directive to include nationally threatened species

The contribution of the ELD to NNL objectives could be strengthened by an adjustment to the implementation of the Directive by the Commission or Member States increasing the scope of the biodiversity and ecosystem services damages to which the Directive applies. In particular, incidents covered by the ELD can be expanded to include nationally protected biodiversity. This is already done to some extent in approximately half of Member States, but can be extended to be more consistent and cover all Member States.


ELD 1: The Commission may provide detailed guidance on determining impacts considered to be ‘significant’ as well as the concepts of preventive and remediation measures. In addition, the Commission may amend the ELD in order to ensure that these clarifications and identification of appropriate actions are clearly included within the Directive. The intended outcome would therefore be the improved implementation and enforcement of the Directive across Member States, increasing the ability of the ELD to achieve its objectives. In particular, if more impacts are considered significant, then more incidents would be covered by the ELD, and hence the deterrence effect of the ELD (illustrated in Fig 6-1) and the rehabilitation and restoration requirements would both increase. This is likely to affect countries with a lower (or zero) number of ELD cases more than those which implement the ELD more often. This option would therefore contribute to NNL by deterring damaging activities as well as requiring preventative or remediation measures for an increased number of projects.

ELD 2: An adjustment of the Directive’s implementation (through guidance) by the Commission to clarify the significance threshold for damage, or the imminent threat of damage, caused by occupational activities that should be used by Member States in undertaking ELD action. Clarification would reduce flexibility and therefore preclude thresholds that set the threshold higher and reduce the Directives applicability. It could also encourage and support Member States to adopt stricter thresholds. For example, a time period could be defined for the term ‘near future’ which is the time in which damage must occur in order for an activity to be defined at causing ‘imminent threat’ of environmental


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damage. Clarification provided within this option can ensure consistency in addressing significant damage, as well as other ELD definitions, therefore improving ELD implementation and the ability for the Directive to contribute to NNL objectives.

ELD 3: An adjustment of the Directive’s implementation (through guidance) by the Commission to increase the scope of the damages to which the Directive applies (to further types of biodiversity and ecosystem services), thus extending the environmental impact achievable through ELD implementation. For example, instead of being applied to damage relating to protected species or habitats defined as in the Habitats and Wild Birds directive, the ELD can be applied to other species and habitats (such as those protected in national laws), expanding the scope of environmental impacts achievable. This will broaden the coverage of species and habitats and hence lead to greater preventative and remediation measures on wider Green Infrastructure, helping support NNL objectives particularly for significant impacts on non-BD and HD species that occur outside Natura 2000 sites.

As shown in Figure 6-1, all three ELD options would influence the mitigation hierarchy at several stages. A stronger ELD can contribute to achieving NNL of biodiversity in four major ways. They are presented here using language that relates them to the mitigation hierarchy, as used in Figure 6-1:

1. Long-term avoidance of environmental damage and risk is incentivised by the ELD. This means that some activities with high risks to biodiversity (e.g. built developments to facilitate risky activities) that would be expected to be carried out in the absence of the Directive are not carried out as a result of potential costs through the ELD.

2. Preventive action is action required to respond to imminent threats in order to reduce the risk of environmental damage. A greater amount of preventative action is assumed to occur as a result of the ELD, in particular where this is cost-effective as a result of lowering the risks of incidents, compared to the costs of actions required should such incidents occur.

3. Primary remediation is similar to what is called rehabilitation/ restoration of the affected site. This is required under the ELD, and is often done more thoroughly under the ELD than under comparable Member State legislation.

4. Complementary and compensatory remediation (see below) is offsetting residual impacts in space and time, respectively. This is required under the ELD, and is often done more thoroughly under the ELD than under comparable provisions (if any) within Member State legislation.


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Figure 6-1 The potential contribution of ELD options to no net loss in relation to the mitigation hierarchy

6.1.4 The reference point and baseline for the policy options

The application of the ELD is triggered by occupational activities that cause damage, or imminent threat36 of damage, to the natural resources covered by the ELD (defined within the Directive). An incident is covered by the ELD if it causes significant damage to any one of water, land and protected species and habitats as defined within the Directive. Certain occupational activities (defined within the Directive) are subject to strict liability, whilst all others will be subject to fault based-liability if and when causal links to biodiversity are identified. The power to determine the significance of damage is given to the competent authority(ies) in each Member State.

The baseline for all ELD strengthening options, in practice, is the current level of biodiversity damage in incidents potentially captured by the ELD (i.e. that existing under the current definitions and implementation of the ELD), and the (limited) extent to which they are actually captured under the Directive. This is shown in the left hand half of the Figure 6-2 below. Each column represents a theoretical incident, with width of the bar on the x-axis

36

Imminent threat is where there is a sufficient likelihood that environmental damage will occur in the near future. ‘Sufficient likelihood’ and ‘near future’ are case-specific.


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showing the coverage of habitats (species), and its height on the y-axis showing the damages captured.

The right hand half shows the effects of three measures to:

- Harmonise the threshold and measurement of ELD cases (ELD1), - Increase that threshold (ELD2), and - Increase the areas (defined through habitats and species) to which ELD is applied

(ELD 3).

Figure 6-2 An illustration of the potential impacts of the ELD measures 1-3

For the purposes of this assessment, the baseline for all ELD measures is the 2020 policy option baseline scenario defined within IEEP’s ‘Policy Options for an EU No Net Loss Initiative’ (Tucker et al, 2014). Under the baseline, no significant change is expected in the number of incidents captured by the ELD. Current European Commission training initiatives are designed to improve implementation of the Directive, and therefore small improvements in implementation, particularly in those Member States where it is weakest, is expected.

Reference points include:


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ELD 1, 2, 3: The current number and type of ELD incidents across Member States: The number of ELD incidents in Member States since its transposition (varying slightly between Member States) varies from between 1 and 10 per year (Belgium, Bulgaria, Estonia, Finland, Lithuania, Malta, the Netherlands, Portugal, Romania, Sweden) to between 10 and 20 (Italy, Latvia, Portugal, Spain, the United Kingdom), to between 50 and 60 (Greece and Germany) (Stevens and Bolton LLP, 2013). Excluding Poland, which has an average of 85 and Hungary with 95 ELD cases per year, there have been around 35 cases per year from 2007 - 2013. There is no evidence of any trends in the numbers of incidents. Ten Member States reported zero remediation cases under the ELD.

From the Member States’ reports, although difficult to judge in many instances, land damage (land contamination that poses a risk to human health) seems to be the most common type of damage occurring within ELD cases. Information on incidents are available through reports submitted to the European Commission by Member States pursuant to article 18(1)37 and are discussed in more detail within Box 6-1 and Annex 1.

ELD 2: The current types of incidents covered by the current scope of significant damage within the ELD (around 200 confirmed damage cases per year, and a further 300 or more instances of imminent threat, pending cases and dismissed cases); and

ELD 3: The habitat types in incidents reported under the ELD and the impacts of these incidents.

The large number of cases in Poland is thought to be due to two main factors. Firstly, the ELD was seen as providing legislation that filled an important gap in the country’s environmental laws. This is not the case in many Member States where (rightly or wrongly) the additional elements of the ELD are regarded as rather limited (e.g. in France). Secondly, Poland’s transposition of the Directive included the powers for third parties, including civil society organisations such as environmental NGOs, to initiate ELD cases. Unfortunately it has not been possible for this study to determine which of these two factors, or other possible causes such as the way the significance threshold is determined, is the cause of the greater number of cases in Poland compared to other Member States.

Box 6-1 Examples of ELD cases

These examples from 2015 national reports illustrate types of cases captured under the ELD and their links to policies to achieve NNL.

In 2009 in Rhine-Neckar, Germany a leak from a phosphorus tank led to up to 2,000 litres of phosphoric acid seepage into the subsoil. The ELD was implemented, resulting in the excavation and disposal of approximately 93 tonnes of contaminated soil. In addition, a new groundwater monitoring well was constructed in order to monitor any groundwater impacts the leak may have had.

In 2011 in Weiβenhom, Germany a warehouse used to store liquid production waste from printing plants, waster paints and circuit boards burned down, contaminating water and soil at the site. The ELD was implemented, resulting in the removal of topsoil in the drainage channel to a depth of approximately 20 cm. In

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addition, accumulations of floating black debris were removed from the channel bed.

In 2010 in Poland, a train derailment caused a spill of oil-derived substances into the environment. Remediation measures included the selective recovery of the released petroleum product through two inspection holes equipped with skimmers for the skimming of the floating product from the water table. The skimming system was put into service on 19 July 2011. Approximately 200 litres of the released product were recovered from July to September 2011.

These three incidents impacted the biodiversity in the small areas (topsoil/water courses) at which compensation measures were taken, and potentially biodiversity in ecosystems affected by any contamination to water.

In 2012 in England, environmental damage to protected species and natural habitats within a Site of Special Scientific Interest of the River Ehen in Cumbria. The damage was caused by low river flows brought about by the over abstraction of water. The low flows, and fluctuation of the flows, resulted in severe stress and mortality across all age groups of the Freshwater Pearl Mussel (Margaritifera margaritifera) population. Remediation measures included surveys by Freshwater Pearl Mussel specialists, a policy for abstractors to maintain minimum flows of the river (to prevent further damage), and quality assurance of hydrometric equipment.



Environmental

As described above the ELD covers damage to land, water and biodiversity (i.e. selected species and habitats). In relation to biodiversity, it is effectively a NNL mechanism for the specific types of damage covered under the Directive. The effectiveness of ways the ELD contributed to NNLD depends on the scope and strength of the implementation of the Directive (European Commission, 2010b). The strengthening of the ELD under each of the three options brings environmental benefits in terms of long-term avoidance, preventative action, primary remediation and complementary and compensatory remediation, as described below:

ELD 1: The main benefits of this measure are the environmental impacts resulting from improved implementation and enforcement of the Directive across Member States. Analysis of Member State reports to the European Commission align with results from previous reports which found that the inconsistencies in defining ‘significant damage’ in part lead to the variation in case numbers. A high number of cases of biodiversity damage have been reported by Poland, Germany and Greece whilst there are no cases at all in Bulgaria, Czech Republic, Denmark, France, Slovenia and others. In Spain, cases initially reported as ‘biodiversity damage’ were dismissed at a later stage since none of them affected any protected habitats or species. Other countries have very few ELD cases such as the UK and Estonia. Consistency in defining ‘significant damage’ is likely to have more of an impact (i.e. higher increase in cases) in Member States currently with low or no number of ELD cases (including those listed, more detail is provided in Table A1 in Annex 1-1) than in Member States which currently apply the ELD often.

Better implementation of the Directive would be expected to increase the use of its provisions to compensate for environmental damage. The choice of damage and


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compensation analysis methods can lead to different orders of magnitude of costs of compensation actions. The example in Annex 1-2 shows equivalency-analysis based approaches increasing restoration costs by between 3 and 12 times compared to value- and cost- based approaches. This is in part due to incomplete economic valuation of the welfare lost through damage under value-based approaches. Monitoring costs also rise in proportion to more extensive and expensive restoration actions.

ELD 2: The main benefit of this measure is that activities causing a lesser amount of damage (i.e. less than current ELD definition of significant) to protected biodiversity would be subject to ELD actions. In addition, an increased number of preventative and remediation measures, at a local scale, will be implemented.

ELD 3: The main benefits of this measure are associated with changes allowing for the ELD to cover significant impacts on a wider range of species and habitats, wherever they occur. This approach allows for the ELD to be better-suited for achieving NNL for more habitats and species, as prevention and remediation actions will be implemented across more habitats.

Economic

In all options, but more so for ELD 2 and ELD 3, it is likely that businesses may choose to take some anticipatory action in response to a perception that they will be responsible for an increased scope of damage. This action may result in increased costs in the short-term to businesses that take action (and a likely reduction to the risk of causing damage and consequent costs in the longer term). Additionally, increased benefits to society may arise to the extent that this anticipatory action reduces the number or severity of environmental impacts. In the UK it was estimated that anticipatory actions of the Directive across all industries would total around £7.5 million per year (€9.4 million per year) (Defra and WAG, 2008). Within this analysis, and following rationale from Defra and WAG (2008), the benefits of taking anticipatory measures (i.e. avoided loss of biodiversity and associated ecosystem services) are expected to be at least as great as the costs.

In broad terms, for the cases that they cover, the options may lead to additional costs and benefits where:

the options introduce liability where there may not have been any before because liability covers a different threshold of impact and/or species and habitats which were not previously covered; and

the requirements are more stringent than current requirements.

This can result in increased costs to those responsible for the damage as well as the Government departments handling ELD implementation, and benefits to society, including health benefits, from an improved environment. For options ELD 2 and ELD 3 it is likely that some businesses will also incur additional costs as they take time to learn about the new requirements of the Directive. For all options, it is possible that permit conditions may tighten, leading to increased costs of compliance for operators.

ELD 1: This measure also, in part, alleviates Member States and tax payers from bearing the financial expenses for prevention and remediation of cases being overlooked by the current


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standards of the Directive. However, although the NNL Policy Options Study concludes that much could be achieved by better implementation of existing measures, there are some significant policy gaps, most notably concerning the treatment of unavoidable residual impacts on biodiversity outside Natura 2000 sites which prevent it from contributing more fully to NNL for all habitats and species (the ELD text requires that it covers the habitats and species protected by the Birds and Habitats Directives, coverage of other habitats and species is optional38). In addition, guidance and training costs of ELD implementation will be incurred as well as costs described above.

ELD 2: The implication of this measure is that it alleviates Member States and tax payers from bearing either the costs of the consequences of that damage or the financial expenses for prevention and remediation of those cases of biodiversity damages whereby the impact is not considered significant by the current standards of the Directive. It may also require less public expenditure on the management of the Natura 2000 network. In addition, an increased number of preventative and remediation measures, at a local scale, will be implemented. Negative impacts from this measure include increased costs to developers as well as those discussed above.

ELD 3: This also alleviates Member States and tax payers from bearing either the costs of the consequences of that damage or the financial expenses for prevention and remediation of those cases of biodiversity damages whereby the habitats and species affected are not included within the Habitats and Birds Directives. The main negative impacts from this measure include the (likely) significant increase in costs to regulatory authorities and developers as the scope for impacts to be included under ELD increase.

Following assumptions within the UK Government’s impact assessment of the Directive (Defra and WAG, 2008), benefits of prevention and remediation measures are assumed to be, on average, greater than the costs. As part of the assessment, a literature review indicated that the assessed monetary value of the benefits outweighs the remediation costs by factors of 1.8 to 133. The following should be noted from the study:

This does not demonstrate that benefits will always outweigh costs but suggests a tendency, and some studies have been be carried out where the level of benefits may previously have been considered marginal

It has been suggested that the available studies may be biased towards valuing ‘higher value’ work that may be undertaken under the Regulations, however, there may also be a bias in that it is unusual for all environmental benefits to be assigned monetary values in such studies.

Flexibility under the Regulations may lead to a tendency for operators to find higher value work.

The estimates and results of the UK’s impact assessment concluded, based on best available evidence and judgements, for benefits around 30% larger than costs. An ex-post

38

Note this scope is not confined to Natura 2000 sites, it also covers protected species and natural habitats outside of Natura 2000, such habitats include breeding sites and resting places of Annex IV-species are covered.


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examination and estimation of benefits provided from prevention and remediation of actual ELD cases within the UK has not been undertaken. The validity of these estimates is therefore unable to be determined at this time, however follows findings from the aforementioned literature exploring the benefit/cost ratios for environmental remediation. This rationale of benefits outweighing costs has been assumed for each of the ELD options being assessed.

There is little information regarding the specific costs to operators of preventative, remediation and monitoring measures incurred through implementation of the ELD for both specific countries and for the EU as a whole. This is due to the fact that in general, there is no obligation for operators to provide information to the regulator about costs in respect of damage. Costs may also vary drastically depending on the severity of the ELD incident and the measures required for prevention and/or remediation. For example, an analysis of six ELD cases in Spain39 found that cost of avoidance and remediation varied from €12,000 to €2 million. In the UK, an analysis of six reported cases from its 2012 report to the EC found costs to operators ranging from £750 to £700,000 (€1,033 to €964,039). Within the UK’s ELD impact assessment (Defra and WAG, 2008), based on the types of cases identified and the costs of work associated with them, the best estimate for the average cost of cases of £105,000 (€131,901) per case is provided. Likewise the assessment suggests that the average cost of a marine case might range from £100,000 to £2 million (€125,620 to €2.2 million) with a best estimate of £800,000 (€1,004,958).

Due to this cost data gap and the variation in costs based on the extent and nature of the damage caused, deriving an estimate of the average costs incurred by operators per incident or habitat type is difficult. Table 6-1 provides an overview of the estimated additional costs of the ELD in the context of annual turnover of broad sectors as presented in the UK’s ELD Impact Assessment (Defra and WAG, 2008). As shown, small businesses face much larger additional costs as a proportion of sector costs, particularly the agricultural, waste and water sectors. A ‘small firms impact test’ concluded that:

As much damage under the Regulations is likely to be caused by small firms as large firms and that small businesses are capable of causing very significant incidents of damage.

The costs of remedial measures will be larger relative to the turnover and profit margins of smaller companies than of larger companies. For example, £100,000 (€125,620) which is (roughly) the estimated average additional level of costs of water and species and habitats incidents represents two years of turnover for the average (one man) farm and 0.03% of the turnover for the average chemicals manufacturer employing more than 500 people.

Time invested in finding out about the new rules may be relatively more costly than needed for a larger company.

Smaller companies may be less good at assessing risks than larger companies which may lead to lower levels of risk reduction than optimum.

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There may be disadvantages for small firms if third parties over-estimate the impacts of the new provisions. For example, small firms may find it harder to secure finance or find it harder to win contract work (Defra and WAG, 2008).

Table 6-1 ELD yearly costs as a proportion of sector turnover

Sector Costs as % of Sector

Turnover

Additional remedial costs as % of turnover of a small

business

Additional remedial costs as % of a turnover of a large

business

Agriculture 0.02% 17% 0.4%

Manufacturing 0.0004% 9% 0.7%

Waste 0.03% 11% 1.0%

Water 0.02% Not available 0.03%

Transport 0.001% 6% 1.7%

Other industry 0.0002% 5% 0.3%

Other 0.0002% 10% Not available

Source: Defra and WAG, 2008

Across the EU28, based on Member State reports and the relative rarity of ELD cases, a reasonable estimate of the costs to operators within the EU28 from 2007 – 2013 for prevention and remediation is likely to be in the tens of millions of Euros.

A number of countries have also put in place legal requirements for operations that fall within the strict liability regime to demonstrate financial security that would be able to recompense for damage under the ELD if the operator could not pay. Whether mandatory or not, several options are still being explored by Member States to implement financial security in practice. Insurance has proven to be the most popular instrument to cover environmental liability. Insurance products for the ELD have been developed in 14 Member States, organised in different ways:

- In 12 Member States, insurance cover relevant to the ELD is provided through extensions to existing insurance regimes for general liability and/or environmental impairment liability.

- In 11 Member States it is possible to purchase insurance specifically relating to the ELD.

- Insurance pools are present in five Member States (Spain, France, Italy, Portugal and the Netherlands).

Inclusion of a wider variety of biodiversity resources in the definition of damage, and implementation of stronger financial security provision, can each increase the contribution of the ELD to achieving NNL of biodiversity in the EU.

The evidence seems to indicate that where the legal structure is sound and environmental insurance is available, it is the preferred option (ACE Group, 2011). In Slovakia, maximum financial security ranges up to €25 million; security ranging between €1 and €5 million has also been applied, and the average amount of financial security for operators has ranged between €50,000 and €100,000. The minimum has ranged between €5,000 and €10,000.


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Sources identify the difficulty in supplying insurance for ELD incidents due: to the lack of cases and corresponding information regarding the cost of these cases; lax enforcement of strict liability, lacking reporting obligations and ELD registries; and unclear or ambiguous key terms such as regarding significant damage, resulting in a lack of demand (ACE Group, 2011; BIO Intelligence and Stevens & Bolton, 2013). Consequently, there is not sufficient information to assess the cost of ELD insurance and financial security measures to EU operators.

Social

The ELD transfers responsibility for environmental damage from wider society to the parties responsible, thus implementing the polluter pays principle. The measures analysed increase the scale of this transfer for particular impacts, as well as for habitats and species, and for associated ecosystem services.

The employment impacts from this policy measure are not expected to be significant. There may be jobs created in environmental industries, and jobs lost in sectors that pose risks of damage to the environment that are captured under the ELD. As with the distribution of financial costs (see below), these employment changes can be regarded as a transfer of employment between sectors.

The majority of these impacts on employment are likely to be spread across socio-economic groups and locations in line with the overall structure of the economy. However, it is likely that some of the lost jobs will be concentrated in sectors that pose higher-risks to the environment and biodiversity. This may result in concentration of the job losses in geographical locations and/or socio-economic groups, which may result in greater social impacts compared to employment impacts. However, the number of incidents and scale of employment impacts from the Directive mean that such effects are not likely to be significant at national or European economic scale.

A further social benefit of the Directive is through prevention of damage to individual’s access to nature, and to realising the health and other quality of life benefits associated with this. This is the case with respect to both the deterrence of damaging incidents, and to the more effective reparation of damage as a result of the Directive. Finally it should be noted that these social benefits apply to future as well as current generations.

Governance

There is some information regarding the costs of transposition and implementation of the ELD to Member States. The UK report to the Commission (UK Government, 2013) identified that in addition to the preparation of the various sets of transposing Regulations and associated documentation, that principal administrative costs incurred in establishing and operating systems to accommodate the transposition of the ELD included:

regulators developing and updating operational processes, to highlight specific novel tasks and allocate responsibilities, including integration of ELD considerations into their incident response arrangements;

preparing both a short guide and more detailed guidance for external audiences and for regulatory officials, to raise awareness of the Directive's requirements;


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conducting a series of training seminars for regulators;

developing partnership working amongst enforcing authorities, including a new Memorandum Of Understanding;

holding workshops for external stakeholders; and

uploading dedicated web pages.

These are likely to be the same actions required for extensions of the ELD (options ELD 2 and ELD 3), although they will be implemented at a smaller scale. The on-going costs of operating the overarching administrative structures to implement and enforce the Directive are assessed as having been relatively modest following transposition, however, the costs of regulators' involvement in assessing and taking action under the transposing regulations vary according to the circumstances of individual cases of damage:

In Greece, for preventative and/or remediation cases, the relevant expenditure incurred and/or budgeted on average for each case, excluding special and isolated cases, amounted to approximately €60,00040.

The impact assessment carried out prior to implementation within the UK revealed estimated yearly admin costs of £2 million per year (€2.5 million per year), with admin burden costs (i.e. the subset of admin costs falling to private enterprises) of £1 million (€1.25 million)41 (Defra and WAG, 2008).

In Spain, the development of technical tools in the General Administration of the State for the ELD has cost over €5 million in services contracts over the last four years. In addition to these costs, the staff costs of the Directorate-General for Environmental Quality and Assessment, which is tasked with activities in connection with the Presidency and Secretariat of the Technical Commission for Damage Prevention and Remediation, estimated at €20,000 per year. Meanwhile in the Autonomous Communities and Autonomous Cities the creation and running of the administrative structures required to apply the new environmental rules has incurred administrative costs estimated as being between €684,000 and €1.9 million per year42.

It is therefore reasonable to assume that regulator costs of enforcement and implementation to be one or more tens of millions of Euros per year.

For all ELD options, additional costs may be incurred by the enforcing authority, particularly in assessing whether environmental damage has been caused, which are then non-recoverable if this threshold cannot be established. The magnitude of additional costs to regulators is based on the estimated increase in the number of ELD cases. As mentioned previously, benefits are assumed to outweigh the total costs of enforcing and implementing cases.

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The costs of the training activities under ELD1 (and as a necessary condition for ELD 2 and 3) can be estimated based on recent activities in the EU. Organising a workshop for administrative staff to improve their understanding of the Directive may cost approximately €20k, of which approximately half relates to the costs of contracted expert input to develop and deliver the training, and half relates to the logistical and staff time costs of staging the training activity. It is possible to organise individual workshops that provide information to multiple (usually adjacent) Member States, and therefore 12-15 workshops could be sufficient to cover all of the Member States in the EU. Thus the resulting costs would be €240 – 300k.

6.2.2 Who is affected, how and why?

Who faces costs?

A certain proportion of the costs identified in this assessment (i.e. operator and regulator costs) could in turn be revenue for the environmental industry. There is unlikely to be a net gain to the economy associated with increased revenue streams to the environmental industry based on an increase in ELD cases, as they would displace expenditure elsewhere in the economy. These expenditures are transfer payments from one sector to another (Defra and WAG, 2008). If there are external benefits in terms of technological development, then these could be considered as economic benefits of the Directive. However, such impacts would likely stem from multiple drivers, and so the extent that this effect exists is not quantified in this assessment.

Operators of an occupational activity (for profit or not), particularly one whose activity:

o requires Integrated Pollution Prevention and Control (IPPC) permit;

o requires waste licence/permit;

o discharges to waters;

o uses or transports dangerous substances likes chemicals;

o makes water abstractions (related to the remit of Water Framework

Directive);

o uses, processes, releases etc. dangerous substances or preparations, plant

protection products or biocidal products;

o deliberately discharges Genetically Modified Organisms into the

environment;

o transports waste;

o deals with mining waste; and/or

o involves carbon and capture storage;

have strict liability for the damage, or the imminent threat of damage, that their activity causes to water, land and protected animal and plant species and their habitats. This means, even without having to establish fault or negligence, they would be held liable.

If an occupational activity does not fall in the above list, they will still have a fault-based liability for damages to protected species and habitats only. Fault or negligence needs to be


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established for them to be liable. Businesses held responsible will face costs of preventing and/or remediation measures. Developers (e.g. wind farm owners, land developers, infrastructure companies, public authorities doing infrastructure or urban developments, farmers) face preventative and remediation costs as well as costs associated with scoping and maintenance. Development of alternatives or mitigation projects may also entail project delays and compliance costs. Authorities face costs of guidance and regulation.

Who faces benefits?

There are potential benefits to:

Specialist consultancies providing ELD services, providers of offset or mitigation sites, possibly project developers through ELD site management measures.

Society at large through the conservation of biodiversity and maintenance (avoidance of loss) of ecosystem services.

Taxpayers, due to the financial burden for recovery being passed to polluters in the private sector, and

Wider society, due to avoided damage, and more effective compensation for damage, to habitats and species.


Significance of the impacts largely relates to Member States’ enforcement of changes in inclusion/non-inclusion of projects within the ELD process. Table 6-2 below summarises the predicted impacts of each ELD option, building on case studies (reports to EC by Member States), information and impact assessments including (but not limited to) those within the reference list to this document. The impacts of the options are uncertain due to the differing baseline situations in different member states.


This section gives an overview of the key results of the analysis in this chapter.

6.3.1 Overview of impacts and advantages and disadvantages

The overall impacts of the ELD measures are summarised in Tables Table 6-2 andTable 6-3. All three ELD measures discussed will act as deterrents to the continuation or implementation of some projects or activities that cause damage, or imminent threat of damage, to the natural resources covered by the ELD (both defined within the current Directive and under any proposed changes within the measures being discussed here). As such, they will also have opportunity costs in terms of the cost of time and foregone development. In addition, they are all expected to increase the number of ELD incidents, which results in habitat and species benefits due to preventative and/or remediation actions, but also results in increased administrative costs, costs to developers in terms of fees and time delays, and land related compliance costs (e.g. ongoing costs of monitoring and land management). Furthermore the options would be expected to increase the degree of compensation, ensuring damage is more fully compensated.


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Table 6-2: Overview of potential costs and benefits and who is affected

Option Estimated costs Who will be affected by increased costs Estimated benefits Who will benefit


Could lead to a small number of additional cases, but is more

likely to lead to a more efficient process of implementing the

ELD. Likely to result in more consistent application of ELD. Some

Member States have reported that pre-existing legislation

sufficiently covers ELD cases, where this is true this option will

not impact the situation in these Member States, but it is not

necessarily correct in all cases. In addition, previous research

concludes that the current definition of the significant threshold

leaves room for misinterpretation, leading to much of the

inconsistencies in ELD application across Member States, which

will not necessarily be corrected by this option.

May lead to small increase in costs and benefits of the ELD.

Not likely to have a significant social impact (e.g. impact on

number of jobs).

Those causing

incidents that give

rise to significant

damage to

biodiversity, or

creating the risk

of such incidents

The number of additional

cases, and scale of

benefits, are not

quantifiable from current

evidence. Benefits include

enhanced provisioning

services (e.g. of fish on

inland and coastal

waterbodies protected);

regulating services (e.g.

water quality regulation by

protected habitats); and

cultural services (e.g. to

recreational users).

Beneficiaries of

ecosystem

services from

sites affected by

ELD incidents,

including users

of provisioning,

regulating and

cultural services.

Members of the

public who value

the protection of

the

environment.


Likely to lead to a moderate increase in ELD cases in Member

States where pre-existing legislation is not more stringent than

the ELD, with the potential to become relevant in Member

States currently using pre-existing legislation.

Likely to result in a moderate increase in costs and benefits of

the ELD.

May lead to small decrease in employment in affected sectors,

but increase in employment for regulators and the

environmental industry. No net economic impact expected.

As above,

particularly those

causing incidents

that are narrowly

below current ELD

thresholds

As above, plus likely to

result in a moderate

additional biodiversity

benefits and

corresponding ecosystem

services (e.g. health and

recreation) benefits as

more incidents will meet

the ELD criteria.

As above


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Approximately half of Member States already apply ELD to

national protected biodiversity, so this policy option would

increase the level and consistency of application of the ELD

across the EU.

Likely to lead to small increases in the number of ELD cases.

May lead to small increase in costs and benefits of the ELD.

Not likely to have a significant social impact (e.g. impact on

number of jobs).

As above,

particularly those

causing incidents

that only affect

nationally

designated

species where

these not covered

by national ELD

implementation

As above, plus likely to

result in a moderate

additional biodiversity

benefits and

corresponding ecosystem

services (e.g. health and

recreation) benefits as

more incidents will meet

the ELD criteria.

As above


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Table 6-3: Overview of potential impacts of options associated with the ELD


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual ELD


ELD 1 ELD

2 ELD 3

Comb-ined

Incremental benefit


Estimated magnitude of change, ↗↗↗↗↗ = Completely meet the objective, ↗↗↗↗ = close to completely meeting the objective, ↗↗↗ = Moderate but substantial contribution, ↗↗= Small contribution, ↗ = Minor contribution (key/criteria to be defined issue by issue in the context of the assessment).

Addressing the problem/challenge - biodiversity & ecosystem service loss (i.e. wrt BD in EU) and contributing to NNL / net positive gain

Significant biodiversity and ecosystem service loss ongoing - i.e. Net Loss

↗ ↗ ↗↗ ↗↗↗

Enforcing the mitigation hierarchy Principle broadly committed to, but not fully implemented ↗ ↗ ↗↗ ↗↗


Estimated magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change (key/criteria to be defined issue by issue in the context of the assessment)


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Biodiversity & habitats (direct and indirect) Widespread and significant Biodiversity loss ↗ ↗ ↗↗ ↗↗↗



Economic Benefits from ecosystem services Significant erosion of ESS widespread across the EU ↗↗ ↗↗ ↗↗ ↗↗↗



↘ ↘ ↘ ↘

Financial costs (one-off) ↘ ↘ ↘ ↘

Financial costs (recurrent) ↘ ↘↘ ↘↘ ↘↘

Opportunity costs (uncompensated) ↘ ↘ ↘ ↘


Social (Magnitude key as Environmental above) arrows indicate a detrimental change. Estimated magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change

Number / quality of jobs generated No baseline estimated on jobs ↘ ↘ ↘ ↘


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Access to nature and Health benefits / quality of life Access to nature variable, and affected by overall loss of

biodiversity, but range of efforts to increase access underway across the EU. Insufficiency for certain communities

↗ ↗ ↗↗ ↗↗↗

Equity and future generations (builds on biodiversity and ecosystem services availability, health etc.)

Loss of biodiversity and significant erosion of ecosystem services widespread across the EU will persist for future generations -

raising equity concerns ↗ ↗ ↗↗ ↗↗↗


Governance (Magnitude key as Environmental above) Upwards arrows indicate a beneficial change with respect to current conditions. Downward arrows indicate a detrimental change. Est. magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗=

Small change, ↗ = Minor change

Clarity


↗↗ ↗ ↗ ↗↗↗

Measurability ↗↗ - - ↗↗

Practicability / Feasibility ↗↗↗ ↗↗ ↗↗ ↗↗↗↗

Enforceability ↗↗ ↗ - ↗↗↗

Coherence with sustainable development and other policies

↗↗ ↗↗ ↗↗↗ ↗↗↗↗


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As indicated in Table 6-4, each of the ELD options contributes to NNL in combination with other policy measures, in particular due to:

improving knowledge on measuring biodiversity damage and enhancements (ELD 1 and 2);

providing guidance on effectives systems for implementation of environmental legislation (ELD 1), and

enhancing options for subsidiarity, through links to nationally protected habitats and species (ELD 3).

Table 6-4 Summary of the relationships between the policy measures and the four key policy clusters





4: Subsidiarit

y

A: B&H

directives

B: Wider policies &

tools

A: Evidence

based policy

making

B: Guidance

for implemen

tation


x X x x X x


x X x x


x x x x X


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7 IMPACTS OF NNL MEASURES: ENVIRONMENTAL IMPACT ASSESSMENT

7.1 Part 1: Overview of the retained policy options


The EIA Directive (85/337/EEC) has been in force since 1985 and applies to a wide range of public and private projects, which are defined in Annexes I and II. All projects listed in Annex I are considered as having significant effects on the environment and require an EIA (e.g. long-distance railway lines, motorways and express roads, airports with a basic runway length ≥ 2,100 m, installations for the disposal of hazardous waste, installations for the disposal of non-hazardous waste > 100 tonnes/day, waste water treatment plants > 150.000 p.e.).

For projects listed in Annex II, national authorities have to decide whether an EIA is needed. This is done by the ‘screening procedure’, which determines the effects of projects on the basis of thresholds/criteria or a case by case examination. Annex II projects include urban development projects and flood-relief works. They also include projects in the agriculture, silviculture and aquaculture sectors that involve: restructuring of rural land holdings; use of uncultivated land or semi-natural areas for intensive agricultural purposes; water management projects for agriculture, including irrigation and land drainage projects; afforestation and deforestation for the purposes of conversion to another type of land use; intensive livestock installations and fish farms; and reclamation of land from the sea.

Whilst the intensification of agriculture is one of the greatest pressures on biodiversity in Europe, the EIA Directive is in general applied inconsistently to agricultural developments by Member States (COM/257/2012). Agricultural intensification is the single biggest cause of the loss of High Nature Value (HNV) semi-natural grassland habitat, and stemming this loss forms a key requirement of EU 2020 Biodiversity Strategy (Grassland Trust, 2010). Recent reform of the Common Agricultural Policy in 2013 is expected to increase pressures on agricultural conversion of semi-natural grasslands (Natural England, 2014).

This is the context for policy option EIA 3 – the production of more targeted guidance to ensure more consistent application and enforcement of the EIA Directive by Member States. In 2009, a report on the application and effectiveness of the EIA Directive highlighted areas where the Directive could be improved. A review process was then initiated in 2010 with a public consultation, which led in 2012 to a proposal for a new Directive to amend the existing EIA Directive (COM/2012/0628 final).

Based on this proposal, a newly amended EIA Directive (Directive 2014/52/EU) entered into force in 2014. The EIA Directive has been strengthened through the adoption of simplified environmental assessment procedures and increasing the accessibility of reports to the general public, as well as requiring ongoing monitoring of ‘significant adverse environmental impacts’. The revision also requires mandatory assessment of ‘reasonable alternatives’, rather than simply an outline of the alternatives which the developer has studied, as well as description of the baseline scenario' (i.e. current state of the environment) and an outline of the likely evolution


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without the implementation of the project. Member States must ensure that developers implement the envisaged mitigation and offsetting measures foreseen in the consent decision for significant adverse effects on the environment. The revised EIA Directive – which forms the baseline of this analysis43 - includes explicit references to biodiversity (Article 3b) including references to biodiversity in screening and the content of environmental assessment report.

Member States have a responsibility to adopt laws, regulations and administrative provisions necessary to comply with the revised EIA Directive by May 2017. Member States also need to communicate to the Commission the national legislation adopted in order to comply with the Directive. Relevant national authorities will need to take steps to ensure implementation of mitigation and offsetting measures by developers – as well as external monitoring of impacts. The baseline assessment assumes full implementation of the EIA reform proposals, which were previously included as a separate option in the (EIA 1) NNL policy options report. We therefore focus here on EIA 3.

EIA 3: Improve implementation of EIAs through awareness raising and enforcement, especially for agriculture

Under this option, awareness of the EIA and its wider and more consistent application to the full range of relevant projects, including those in agriculture and forestry, would be raised to improve implementation. This would be done through the provision of guidance and communication material on how to ensure these types of projects are properly included through the screening process, recognising the limitations of existing guidance material.44 EU level guidance would be updated, and specific guidance would be published to supplement this on key topics, for instance, on the inclusion of semi-natural45 grasslands and pastures in order to help address ongoing threats from intensification in these habitats.

43

The proposals for EIA 1 within the Policy Options for an EU No Net Loss Initiative (Tucker, et al 2014) were subsequently adopted within the revised EIA Directive, so EIA 1 forms the baseline assessment here, despite the fact that not all Member States have transposed this into national regulation as yet. For this reason, the benefits assessment and impact assessment focuses on the remaining policy option, EIA 3. 44

Current EU guidance on screening and scoping was published in 2001. Almost all EU countries have general guidance on EIA procedures, but only some having particular guidelines on screening procedures in countries with a more frequent use of discretionary judgement by the EIA authority/ies, or with more decentralized EIA regulations. 45

The definition of which areas should be considered ‘semi-natural’ (Article II/2) may, in practice, depend upon a wider evaluation of the role of habitats and areas or features of high biodiversity interest in the wider countryside (such as ponds, small wetlands, ancient hedgerows) by the competent authority or authorities in the Member States responsible for conservation and/or biodiversity. Other potentially relevant environmental factors may have to be considered by other authorities (those responsible for e.g. landscape designations or protection of archaeology). There is therefore some margin for discretion, but the main emphasis is on identifying those areas which reflect natural conditions and have some intrinsic nature conservation or other environmental value which would be lost by agricultural management proposals employed to permit intensification of agricultural practices (COM, 2008/22). The term ‘semi-natural’ indicates that even areas where there


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This would help to address the problem that agricultural developments, whilst included within EIA in theory, are rarely scrutinised in practice within most Member States (COWI, 2009). Other guidance could be prepared, for instance on determining whether impacts should be considered ‘significant’ or ‘adverse’, on the concepts of appropriate preventative and remediation measures and the implementation of the scoping process.

At a Member State level, workshops and events would be run to also raise awareness of these issues (perhaps in combination with actions under option CAP 1 for agriculture related EIA issues). Existing communication portals would also be maximised to further raise awareness of effective screening requirements and threshold definitions amongst environmental authorities. Targeted awareness-raising actions could help address clear deficiencies with regard to implementation of EIA in certain habitat types whilst reducing the likelihood of injunction proceedings. Overall, the intended outcome of EIA 3 would therefore be more consistent implementation and enforcement of the Directive with regards to agriculture across Member States, ensuring that it covered the full range of projects that impact significantly on biodiversity, and increasing the ability of the Directive to achieve its objectives.


If a project is likely to have a significant impact on the environment (by inclusion within Annex I projects or screened in Annex II projects) an Environmental Impact Assessment is undertaken, including voluntary scoping and public consultation. Based on the findings of the EIA, a developer will need to ensure appropriate measures are taken to reduce or mitigate the impact of the development. EIA 3 would result in more projects being screened, and could thus be expected to result in an increase in the number of EIAs being undertaken overall, as outlined in Figure 7-1 Chain of logic for EIA .

Implementing the EIA 3 option could result in an overall increase %) in the number of EIAs addressing biodiversity (on the basis of incomplete and inconsistent application of the EIAD to agriculture by many MS), the effort required to assess biodiversity (and ecosystem service) impacts, and the actions proposed in response to these EIAs, as well as involving policy guidance and regulatory costs.

has been some degree of human intervention, which prevents an area from being ‘natural’, will fall within this category (Annex II 1(b)), regardless of the moment in time when the human intervention took place. In many Member States, the term ‘semi-natural’ is likely to be applicable to large parts of the country area, although the extent of management will vary.


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Figure 7-1 Chain of logic for EIA

Figure 7-2 outlines the key role of EIA in ensuring deterrence, avoidance and minimisation of such impacts. Better implementation of the rules, particularly with regard to the need for screening, would be expected to deter certain projects, as well as informing measures to avoid, minimise or restore impacts, or provide compensation for residual impacts. It would therefore help to address impacts at each stage of the no net loss hierarchy.


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Figure 7-2 The potential contribution of the EIA option to no net loss in relation to the mitigation hierarchy

7.1.3 The reference point and baseline for the policy option

Under the revised Directive, EIAs must include consideration of impacts on biodiversity (with particular attention to species and habitats protected under 92/43/EEC and 2009/147/EC. The EIA Directive therefore provides an opportunity to recognise risks to flora and fauna due to a proposed development and to propose suitable measures to avoid or reduce them. The main benefit of the EIA process is that environmental considerations are taken into account in decision-making processes in a transparent way (COWI, 2009). Furthermore, EIAs (and SEAs – see chapter 0) normally identify potential mitigation measures, and sometimes offsetting measures, and although there is no obligation from the EIA itself to implement them, they can help to ensure that biodiversity losses are avoided or minimised. It is also possible for competent authorities to reject projects whose likely impacts are considered unacceptable or to require implementation of offsets through conditions on consent or other similar mechanisms.

The baseline for EIA 3, in practice, is the current level of biodiversity damage in incidents potentially captured by the EIA (i.e. that existing under the current definitions and implementation of the EIA), and the extent to which they are actually captured under the Directive. However, the baseline is currently undergoing a significant shift with the recent revisions to the EIA Directive. The working


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assumption therefore has to be that these revisions are going to be implemented by Member States, and that activity under the revised EIA Directive will therefore constitute the new baseline (EIA 1).

The revised EIA includes several changes, of which the most relevant in achieving NNL are:

Biodiversity is to be explicitly considered in the EIA process.

Provisions for coordinated or joint procedures for impact assessments can be introduced by Member States where Appropriate Assessments are simultaneously required.

Measures to improve the quality of EIAs include: increased guidance on ‘scoping’ by project promoters of the significant effects to be assessed and the methods to be used; developers need to include ‘a description of measures envisaged in order to avoid, prevent or reduce or offset likely significant adverse effects on the environment’; and reports need to provide an assessment of reasonable alternatives, information on new environmental issues (including biodiversity) and a description of monitoring measures.

Member States must ensure that developers implement the envisaged mitigation and offsetting measures for significant adverse effects on the environment.

Member States shall determine the procedures regarding the monitoring of significant adverse effects on the environment.

As before, development projects listed in Annex I of the EIA require mandatory assessment. Projects listed in Annex II are subject to screening procedures in Member States to determine whether an EIA is necessary.46 With regard to the screening process, the revised EIA Directive:

provides that Member States may set thresholds or criteria to determine when projects need not undergo either a screening determination or an EIA, and/or thresholds or criteria to determine when projects shall in any case be made subject to an EIA without the need for a determination;

sets out in Annex IIA a detailed list of the information that a developer will be required to submit in support of any request for a screening determination; and

amends Article 4 with regard to screening procedures.

46

There are generally two kinds of screening tools used by Member States, (i) where projects are subject to specified threshold values and criteria, and/or (ii) case by case assessments. These two screening methods can also be used in combination, e.g. where projects must be subject to mandatory EIA above specified threshold values and assessed on a case-by case basis when below inclusive threshold values or between inclusive and exclusive threshold values. When establishing those thresholds or criteria, Member States must take into account the relevant selection criteria set out in Annex III. Most Member States apply case-by-case assessments.


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Moreover, whilst it has been established for some time that mitigation measures can be taken into account in determining whether an Annex II development is likely to give rise to significant effects, this is now explicitly incorporated within the revised EIA Directive. If a decision-maker chooses to screen out of the EIA process a development because of the proposed mitigation, then the subsequent development consent will need to include provisions to secure the effective implementation of these mitigation measures. The revised EIA Directive also provides that the screening determination must give reasons for the decision.

Recent analysis indicates that most Member States do not maintain a register of screening applications and subsequent decisions in the public domain (Tucker et al, 2014). Nonetheless, there is evidence that application in Member States is unsystematic and that there is a wide variation between Member State meaning that Annex II projects can be subject to an EIA in one country, but not another. This can lead to significant impacts on the environment.

Whatever the method adopted by a Member State to determine whether or not a specific Annex II project needs to be assessed, the method must not undermine the objective of the Directive, which is that no project likely to have significant impacts on the environment should be exempt from screening unless the project could, on the basis of a comprehensive screening, be regarded as not being likely to have such effects.

Each Member State must also define rules for determining whether projects falling within Article 4 (2) of the EIA Directive must be made subject to ‘prior assessment’ of their effects on the environment (including cumulative effects, which can be substantial even in the case of ‘small’ projects) before a full EIA is undertaken.

Box 7-1 UK example of EIA application to uncultivated land

One example of the status quo is the transposition of these elements of the EIAD into national legislation in the UK. The EIA (Agriculture) Regulations came into force in England in 2011, and apply to restructuring of land holdings and conversion of uncultivated land, subject to prescribed thresholds for project size (typically in hectares). In England, there were 353 screening applications under the EIA (Agriculture) Regulations to 2010, resulting in 14 environmental assessments being required. 76 investigations led to two stop orders being applied, one of which was revoked on appeal. A remediation notice was also served, after a semi-natural meadow was ploughed. During the same period, there at least 15 cases where semi-natural grasslands were damaged or destroyed as a result of intensive agricultural activity, including 22 ha of priority purple moorgrass/rush pasture, and an entire 36 ha farm of semi-natural grasslands.

The UK Department of Environment, Food and Rural Affairs (Defra) has since 2006 not required a screening notice for projects affecting ‘sub threshold’ semi-natural areas, on the basis that those below 2 ha in size would be unlikely to have a significant effect on the environment. Given that the only semi-natural areas that fall under the regulation are priority habitats, it is difficult to understand how the loss of priority habitat fragments under the threshold is not significant. Moreover, England’s priority grassland habitats are known to be highly fragmented and a large proportion of sites outside national and EU protected areas fall below this 2 ha threshold

Source: Grasslands Trust (2010).


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Implementation and case-law show that, when establishing thresholds, Member States often exceed their margin of discretion, either by taking account only of some selection criteria in Annex III or by exempting some types of projects in advance.47 A key issue with the existing regulatory framework is that environmental authorities typically set project screening thresholds against one criteria of environmental impact alone (project size), with the scale of thresholds applied often bearing little practical relation to typical conditions in rural and agricultural settings. Cumulative impacts arising from development are also rarely considered.

The EIA Directive has therefore, on a number of occasions, been the subject of cases brought before the ECJ. Indeed, 69% of EIA infringement cases relate to the screening procedure and Member States’ decisions on whether or not to carry out an EIA. There are an estimated 27,400 to 33,800 screenings carried out per year, suggesting that this issue could be having significant detrimental environmental effects from incorrectly assessed projects (COM, 2013). The levels at which thresholds have been set has clear implications for the amount of EIA activity. Although rulings of the ECJ are the only source of definitive interpretations of EU law, only a few ECJ cases actually address the question of the definition, description or scope of the individual project categories listed in Annex I and II (COM, 2013).



Environmental

The EIA Directive has laid down essentially procedural requirements leaving quality standards for the EIA process to national authorities. Implementation gaps with the Directive represent 12% of infringements relating to EU environmental law (COM/SWD/2012). Implementation gaps (for example, relating to inadequate screening or non-consideration of cumulative impacts), could be expected to reduce the effectiveness of environmental protection and result in a failure to address adverse impacts on biodiversity. Environmental damages will thus occur whilst the public and private sector will face unnecessary administrative burdens (COM/2012/257).

47

For instance, in 2008 the European Court of Justice (ECJ) ruled that Ireland had not adopted all measures to ensure that projects likely to have significant effects on the environment that belong to categories 1a (projects for the restructuring of rural land holdings), b (projects for the use of uncultivated land or semi-natural areas for intensive agricultural purposes); and c (water management projects for agriculture, including irrigation and land drainage projects) of Annex II were assessed for environmental impacts before consent was given. By setting thresholds which take account only of the size of projects – to the exclusion of the other criteria laid down in Annex III and by not providing for project screening, Ireland had exceeded the limits of its discretion. In response, Ireland implemented new regulations in 2011 which require more land restructuring and water management projects be scoped and environmentally assessed. Source: Mont, C (2011). New Irish environmental regulations require more land restructuring and water management projects be scoped and assessed. http://charles-mount.ie/wp/index.php/tag/ecj-c-6606/


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Implementation gaps are often observed in Member States where a high number of infrastructure projects are carried out and which have less experience in applying EIAD, and in Member States where application is decentralised (Oosterhuis et al, 2007). Awareness-raising and enforcement is likely to bring moderate-high environmental benefits through improved implementation of the EIA Directive (e.g. better assessment by authorities, a greater number of Annex II projects being subject to EIAs (as evidenced by historical ‘gold plating’ of Annex I projects by authorities, which has been seen to result in a substantial increase in the overall number of EIAs undertaken in some Member States) (GHK, 2008), better quality of EIA reports or anticipation of EIA requirements by developers) (COM/2012/257).

Benefits would include acting as a constraint on land intensification projects (e.g. irrigation, drainage, ploughing of semi-natural grasslands) and some afforestation, enhanced protection of habitats and species associated with semi-natural agricultural habitats, especially outside of Natura 2000 sites, and moderate benefits for the protection of semi-natural ecosystems and biodiversity that underpin ecosystem services. Overall, these habitats (predominantly outside of the Natura 2000 network) make up 20% of the habitats listed in Annex I of the Habitats Directive, and all require continued grazing and/or mowing for their maintenance (EEA, 2015). Because of European trends towards agricultural intensification on better land and abandonment of marginal land, these habitats are more threatened and in worse condition than other types of habitats, such as forests (EEA, 2015; Keenleyside et al, 2014; Keenleyside and Tucker, 2010; Poláková et al, 2011).

There may be some key benefits relating to enhanced protection of semi-natural grasslands and other farmed or forested habitats currently experiencing pressure from conversion and intensification. Arguably, these represent the core benefits of EIA procedures, in taking a wider range of environmental benefits into account at an earlier stage in the decision-making process. For example, the ECJ took action against Ireland in 2008 because it had set a blanket threshold of 100 ha below which it deemed agricultural improvement to have no significant impact (the average field size in Ireland at the time of this judgement being 2.4 ha). This threshold has since been revised to changes in cultivated land or semi-natural areas above 5 ha, which is still larger than the average field size. Evidence from the Commission indicates that Ireland carries out on average 928 screenings and 197 EIAs per year (COM/2012/257).

Natural England’s EIA team reports that enquiries regarding the ploughing of permanent pasture almost doubled in 2012 from the number received in 2010 (from 575 up to 1,005) (Grasslands Trust, 2010). This was judged to be attributable to the CAP reform proposals being widely reported in the farming press. Furthermore, the EIA team reported an increase in tip offs about permanent pasture being ploughed up, from 23 in 2010 to 51 in 2012, and a number of these have been related to registered County Wildlife Sites of high environmental value, more than has been the case historically.

The area of grassland affected by the EIA applications tracks the trend in application rates, increasing from 2009 onwards with marked increases from 2010 to 2011. The


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actual areas of grassland which fall within the scope of the Regulations on which proposed agricultural projects are likely to have a significant effect form a small proportion of the total, constituting 77 and 239 ha in 2011 and 2012 respectively. However, the area of grassland judged to fall within the Regulations but not have a significant effect if lost is significantly greater with 493 ha and 1,006 ha for the same two years. The majority of land which falls in this category is judged to be uncultivated but not semi-natural (i.e. improved grassland) or to fall under the 2 ha threshold (Natural England, 2014)48.

A number of newer Member States (e.g. Latvia and the Czech Republic) have adopted an approach in line with ECJ Case Law, whereby projects not meeting thresholds are subjected to case-by-case screening; before these amendments were introduced (following the ruling against Ireland) such projects were automatically excluded from the scope of EIA regulations. Accordingly, the number of screenings in Annex II projects have increased substantially in recent years (COWI, 2009).

Elsewhere in Europe the requirements of the EIA with regard to agriculture appear to be insufficiently implemented and even widely unknown. Respondents (environmental authorities) to an EU-wide Grasslands Trust survey in Germany and Sweden were not aware that this element of the Directive was being implemented in their countries. In Estonia, the threshold was found to be 100 ha and no EIA examples were identified. In Spain the general threshold is also 100 ha, or 50 ha where the slope of the land exceeds 10%. Bulgaria has transposed the requirements of the EIA Directive to agriculture and deals with projects on a case-by-case basis – there are no thresholds. The requirement for EIA before conversion of abandoned or semi-abandoned lands to intensive agriculture is explicitly stated. In France, the ECJ has launched infraction proceedings because there is a 50 ha blanket threshold below which projects are deemed to have no significant impact. Survey respondents could find no record of any cases being taken up by the departments which are responsible for implementing the Directive (Grasslands Trust, 2010).

Ecosystem service impacts from the measure would primarily relate to the scope for enhanced protection of semi-natural grasslands and pasture in the EU. Semi-natural grasslands are a key conservation priority for the EU Biodiversity Strategy, and merit special attention from EU policy. This broadly-defined category of land represents around a quarter of EU farmland, although the total area of these habitats declined by 12.8% between 1990 and 2003 (Grasslands Trust, 2010). These make up 100% of Habitats Directive farmlands and 20% of all Habitats Directive habitats, harbouring the majority of EU farmland biodiversity and farmland carbon, as well as a majority of water catchment services on farmland. Data indicate that these habitats are declining in extent and condition, and are in a worse state than other habitat types (EEA, 2015). 48

In England, to 2010 there were 353 screening applications for agricultural projects, resulting in 14 environmental assessments being required. 77 investigations led to two stop orders. Research by the Grasslands Trust also pointed to 15 cases where semi-natural grasslands were damaged or destroyed as a result of intensive agricultural activity, including 22 ha of priority purple moorgrass/rush pasture, and an entire 36 ha farm of semi-natural grasslands (Grasslands Trust, 2010 )


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Estimating the value of these services is difficult and the methodologies for doing so are still developing. One recent estimate (IEEP, 2012) is that semi-natural grasslands in the Natura 2000 network have an average ecosystem service value of €1,900 per ha per annum, giving a total ecosystem service value of Natura 2000 grasslands of about €22 billion per annum. Since many of these habitats fall outside of the Natura 2000 network, the total EU value will be much higher (Collins, 2012).

Projects involving the transformation of ‘semi-natural’ land to intensive agriculture are included within Annex II of the EIAD but this makes no explicit reference to the Natura 2000 definition of semi-natural grassland. By linking the definition of grasslands to mapping and assessment work (i.e. the baseline data) undertaken as part of the Mapping and Assessment of Ecosystems and their Services (MAES) initiative, these areas would be immediately subject to EIA if there was a proposal to carry out intensive agriculture that would affect them. The 2010 EU Biodiversity Baseline report (EEA, 2010) pointed to a total grassland area of 365,224 km2, the majority of which would be defined as ‘semi-natural’.

Given the existing development pressures on this land, this is likely to lead to a substantial increase in the number of EIAs conducted in many regions (and in some cases, act as a deterrent on land transformation).

As the example of conversion/intensification pressure in England (where grassland conversion almost doubled between 2010 and 2012 as a result of CAP reform) illustrates, significant increases in development pressure on semi-natural grasslands can be expected across the EU as a whole (12.8% loss between 1990 and 2003 – see above). Given that these are the most recent data on the annual rate of grassland loss, an annualised rate of around 1% can be assumed. It is important to caution, however, that this will be counteracted to some degree by the value of ecosystem services associated with increased agricultural production.

If EIA3 were to reduce the rate of grassland habitat loss by 20% annually, this could every year protect grasslands yielding annual benefits of €139 million across the EU (based on an assumption of losses of 365,000 ha per annum). The benefits of the ecosystem services protected would accumulate over time, as each hectare of grassland protected would continue to deliver benefits annually into the future. The accumulated benefits of the ecosystem services protected would reach €694 million annually by 2020 and €2 billion annually by 2030.

Despite growing awareness of the importance of ecosystem service benefits, these are rarely included within EIAs. This means that unless the area under development contains specially protected habitats or species, long-term environmental impacts are generally not accounted for within screening or scoping. A recent study in France, summarised in Box 7-2, indicates that this can lead to substantial losses of ecosystem services.


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Box 7-2 France – an example of combining direct and indirect impacts to assess ecosystem service loss due to infrastructure construction

A recent study by Tardieu et al (2015), developed a framework to assess the impacts of a high-speed rail project in western France. The framework consisted of four steps: (1) identification of local ecosystem services; (2) assessment of potential ecosystem service loss as a result of direct or indirect impacts; (3) economic valuation of the loss of services; (4) applying these steps to alternative options (different railway routes) for comparison. Information on ecosystem services were gathered using secondary data by combining economic values from established literature with CORINE land cover data at the EU level. Values were estimated for 11 ecosystem services, including air purification, flood protection, pollination and natural control of plant pests – none of these, with the exception of flood control, are currently included within EIAs.

In this case study the economic values of ecosystem services that would be lost were worth approximately €228,000 per year for the best possible option. Furthermore, it is not just direct effects that need to be accounted for, as indirect effects also had substantial impacts, often occurring beyond the delineation of site impacts. Interestingly, among the options, the longest route for rail track development was found to have the smallest effects on ecosystem services – calling into question a common assumption within EIA.

Source: Tardieu, et al (2015)

Economic

EIA 3 would involve the development and dissemination of guidance on the application of EIA to agricultural and forestry operations. Developing, publishing and disseminating guidance, including through workshops and communications at EU level and in Member States, would require small one-off costs.

EIA 3 would also be expected to result in more direct costs to project developers (in this case, largely farmers) and public administrators. Direct costs associated with the delivery and administration of EIAs in the EU were calculated at between €710 million per annum by 2020 and €866 million per annum by 2030 under BaU scenarios (EC, 2012).

The overall increase (if any) in the number of EIAs undertaken is unknown, but assuming a moderate (20%) increase in the number of EIAs undertaken as a result of EIA 3 (again, predominantly in agricultural settings) as a result of the EIA 3 measures gives an increase in costs to €852 million (or €142 million additional costs) by 2020 and €1.04 billion (€174 million net additional costs) by 2030. Such an increase would be moderate by the standards of previous increases in the number of EIAs undertaken in recent years, which has tended to grow in line with the capacities of authorities (COWI, 2009).

Although these costs should be largely recovered from project developers (again, largely farmers), in practice this will also entail some additional allocation of costs to authorities.


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Social

Social impacts primarily relate to changes in employment stemming from changes in the implementation of EIAs, and potentially from capacity-building and enforcement measures. Nonetheless, employment benefits would likely be modest owing to the non-binding nature of these measures. However, the stronger enforcement and better awareness (and therefore greater use) of EIAs with regard to agriculture could be expected to result in an increase in the number of EIAs being conducted overall, with corresponding positive impacts on employment in the public sector. The additional workload resulting from new requirements to be addressed in agriculture and other previously neglected areas such as forestry may lead to job creation within specialist environmental consulting companies, particularly within rural economies.

Such gains might be offset to some extent through negative effects of foregone agricultural intensification and food production as a result of wider EIA enforcement, though the net overall effect would be difficult to assess. However, it is important to caution that these impacts will not be evenly distributed across the EU, as rates of agricultural development vary widely between Member States. For example, while many newer Member States have converged towards the EU average ratios of utilised agricultural area labour ratios following accession (and reductions in both utilised agricultural areas and employment have been quite large), other Member States (notably Greece) have maintained relatively stable employment profiles even with a decline in the overall utilised agricultural area, owing to structural differences in the agricultural sector (Eurostat, 2014b).

Governance

Contributions to governance aspects from EIA may be substantial: more formalised public engagement in the EIA process may strengthen acceptance of decision making and reduction in reparation requirements to stakeholders; it will also strengthen implementation and further the better regulation agenda. Strengthening the consistency of EIA between Member States could improve dissemination of best practice and strengthen transboundary applications.

Contributions of this option to governance could be strong; capacity-building measures could help to support the implementation of the subsidiarity principle. Capacity-building measures and stronger enforcement of existing EIA elements will provide greater impartiality, transparency and legitimacy to the decision-making process, and consequently could have moderate to high benefits for civil society engagement (EC, 2012). There is however a wider question of whether Member States have the right regulatory structures in place within national planning systems to properly enforce aspects of the Directive relating to agriculture and forestry. Analysis in support of the Impact Assessment of the EIA Directive revision by GHK (2010) identified that whilst many older Member States had reasonable experience of conducting screenings and EIAs on projects outside traditional infrastructure and economic development areas of focus, newer Member States tended to have very little experience with ‘other’ types of projects. This suggests that there may be differences between Member States in their capacity to deliver an increased volume of EIAs for agricultural and forestry.


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Who faces costs?

Costs stemming from EIAs were identified by GHK (2010) as largely facing project developers in three sectors: developers of large infrastructure projects (e.g.. energy, transport, water, waste); conventional urban development and construction projects; and other projects, including recreation, agriculture, mining, extraction and military concerns. EIA 3 would be expected to affect farmers and foresters in particular, as well as the authorities responsible for administration and enforcement of EIA rules in these sectors.

According to GHK (2010) the average number of days to process an EIA (under the existing Directive) is 32 days, and the average number of persons employed by a Member State to process EIAs is 52 (ranging from three in Malta to 160 in Greece). Legal entities (including developers) individuals and associations also face potential costs relating to delays and legal challenges to EIAs.

Who benefits?

Society as a whole benefits from the maintenance of ecosystem services – particularly where this relates to the avoidance of impacts (and awareness-raising of impacts) on habitats currently experiencing significant development stress, such as semi-natural grasslands. EIA 3 would address the weak application of the EIA Directive to important habitat types such as semi-natural grasslands, wetlands and forest (habitats which typically provide a wide range of ecosystem service benefits).

There could also be benefits in terms of reduced time, costs and legal challenges relating to the streamlining and harmonisation of the EIA process, for example, legal challenges relating to environmental interests (COMM/2012/257). An ecosystem approach could also be beneficial for ensuring early consideration of the interests of local stakeholders – avoiding conflict and additional consultation time later in the process. Service providers engaged in the EIA process could benefit from addition revenues stemming from engagement in monitoring and stakeholder engagement processes.


Significance of the impacts largely relates to Member State enforcement of screening criteria and changes in inclusion/non-inclusion of projects within the EIA process. Overall, EIA 3 would be expected to involve significant costs and benefits, given gaps in current implementation and enforcement with respect to agriculture and forestry.

Impacts on capacity-building and enforcement under this option are likely to be moderate, owing to the substantial differences between Member States in approaches to screening and scrutiny of agricultural land use change in the context of EIA. There is no EU definition of semi-natural vegetation, and in most countries the rules are applied in such a way as to provide almost no protection for semi-natural pastures and meadows.


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Providing guidance on the proper application of EIA in this context could have substantial wider environmental benefits, because of the lack of existing guidance relating to grasslands. A recent report by the Grasslands Trust (2010) emphasised that EIA is ‘the only EU measure available to protect habitats from intensive agriculture outside of the Natura 2000 network’. Given the scale of land use change occurring in Europe’s semi-natural grasslands, even a small increase in the number of Annex II projects subjected to EIA within these habitats could have substantial impacts on the maintenance of associated ecosystem services and biodiversity.



The analysis indicates the potential of the EIA 3 measures to help safeguard important grassland, wetland and forested habitats, and Tables Table 7-1 and Table 7-2 summarise their impacts.

The measures, whilst guidance-based (thus allowing solutions relevant to the diverse transpositions of the EIA Directive in national and sub-national legislation), can help address a key gap in the implementation of the EIA Directive to date. Whilst additional costs can be expected to fall to public authorities (relating to enforcement and capacity-building) and developers (relating to revision or modification of plans), these costs are likely to be substantially outweighed by benefits to society. EIA 3 will strengthen the integration and consideration of biodiversity impacts within development and wider planning decisions, and help to deter or reduce the impact of projects that could cause significant adverse effects on the environment. In particular, it should help to raise awareness and improve screening of agricultural and forestry projects that impact on semi-natural grasslands and other important habitats.

The number of EIAs would therefore be expected to increase, which would result in habitat and species benefits due to preventative and/or remediation actions, but also in increased administrative costs, costs to developers (in this case, farmers and foresters) in terms of fees and time delays49. There might also be opportunity costs in terms of foregone production of food and timber.

There would also potentially be significant administrative costs for Member States if systems or structures need to be developed or changed in order to better integrate the application of the EIA Directive to non-traditional areas (e.g. agriculture / forestry) where these issues have not usually been considered (vs. more traditional development projects). This could relate to issues of capacity within Member State authorities, since conventional built environment projects may fall within the

49

Average overall costs of EIA were estimated at €62,000 per procedure (€41,000 to developers and €11,000 in public administration costs) or approximately 1% of average project development costs (Oosterhuis, 2007). Administrative costs to public authorities were estimated at €146-215 million per year in 2010 (COM/257/2012). Analysis by GHK (2010) in support of the IA on revision of the EIAD indicated that an average of 15,829 EIAs were undertaken across the EU27 each year.


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capacities of planning and environment professions, but screening for agriculture and forestry projects may require more specialist knowledge and skillsets.

There is however the potential for jobs to be created if EIAs are increasingly applied to ‘new’ areas where skills and expertise need to be developed. Moreover, jobs may also be created due to the need for compulsory monitoring, and the requirement that mitigation and offsetting measures for significant adverse effects on the environment must be implemented. Moreover, there are potential savings in terms of the administrative time spent by the ECJ and other related stakeholders in the case of EIA infringements given that implementation of the EIA would be improved, especially with regard to the application of the screening procedure. There will also potentially be greater harmonisation in the application of EIA rules and procedures. This measure may also in part alleviate Member States and tax payers from bearing the costs of ecosystem restoration. The development of binding guidance could also support the proper functioning of the internal market – by addressing differences in implementation of Article 4(2) and ensuring enforcement of this aspect of the Directive, the risk of agricultural or forestry producers in one Member State having advantages over others will be mitigated.

Analysis of impacts relating to EIA 3 points to a significant overall positive impact in comparison to the baseline context (Table 7-2). In particular, EIA 3 can help address impacts relating to habitat loss and loss of ecosystem services. Negative impacts pertain to moderate additional financial and administrative costs.


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EIA 3: Improving implementation of the EIAD through awareness-raising and enforcement, especially for agriculture

One off costs of issuing and disseminating guidance

Overall costs stemming from an increase in EIAs: €142 million additional costs pa by 2020, and €174 million additional costs by 2030.

Opportunity costs (unquantified) could be substantial, as a result of fewer developments proceeding

Farmers, foresters and landowners would be impacted through additional costs relating to EIA measures, as well as potentially through opportunity costs if EIA resulted in fewer operations taking place

Public administrators will incur considerable costs in administration and enforcement

Safeguarding ecosystem service benefits through avoidance of grassland conversion (each year protecting grasslands delivering services of €139 million p.a.)

Cumulative value of annual services safeguarded reaches €694 million p.a. in 2020 and €2 billion in 2030

Biodiversity benefits through avoidance of loss of grassland and forest habitats

Society as a whole benefits through the safeguard of valuable ecosystem services from semi-natural grassland

Rural communities benefit from greater consultation input to developments

Developers benefit from earlier and broader consideration of alternatives.


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Table 7-2 Overview of potential impacts of options associated EIA


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual EIA

Baseline: study context (BaU) EIA3


Estimated magnitude of change, ↗↗↗↗↗ = Completely meet the objective, ↗↗↗↗ = close to completely meeting the objective, ↗↗↗ = Moderate but substantial contribution, ↗↗= Small

contribution, ↗ = Minor contribution (key/criteria to be defined issue by issue in the context of the assessment).



↗↗

Enforcing the mitigation hierarchy Principle broadly committed to, but not fully

implemented ↗↗↗


Estimated magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change

(key/criteria to be defined issue by issue in the context of the assessment)


Widespread and significant Biodiversity loss ↗↗

Economic and financial: Costs and benefits: Administrative costs (at EU and MS level); Financial costs (one-off); Financial costs (recurrent); Opportunity costs (uncompensated); Economic Benefits from ecosystem services (costs are presented with downward arrows (to reflect increasing burden),

benefits up)




↗↗


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↘↘

Financial costs (one-off) ↘↘

Financial costs (recurrent) ↘↘

Opportunity costs (uncompensated) ↘↘




Number / quality of jobs generated No baseline estimated on jobs ↘?


Access to nature variable, and affected by overall loss of biodiversity, but range of

efforts to increase access underway across the EU. Insufficiency for certain communities.

↗↗


Loss of biodiversity and significant erosion of ESS widespread across the EU will persist for future generations - raising equity concerns.

↗↗


Governance (Magnitude key as Environmental above) Upwards arrows indicate a beneficial change with respect to current conditions. Downward arrows indicate a detrimental change. Est. magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ =


Clarity


↗↗

Measurability ↗

Practicability / Feasibility ↗↗

Enforceability ↗

Coherence with SD and other policies ↗↗↗


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The EIA revision (EIA 1) is part of the baseline that supports EU added value, better implementation and good governance while respecting Member State subsidiarity.

EIA 3 further contributes to better regulation and better implementation objectives in Member States. It is also consistent with improved use of EU funds under the CAP (and associated cross compliance requirements). The guidance led approach is consistent with subsidiarity principles.

Table 7-3 Summary of the relationship between the policy measure and the four key policy clusters





4: Subsidiarit

y

A: B&H directives

B: Wider policies &

tools

A: Evidence

based policy

making

B: Guidance

for implementation


X X


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8 IMPACTS OF NNL MEASURES: STRATEGIC ENVIRONMENTAL ASSESSMENT



The SEA Directive extends EIA procedures and principles from projects to plans and programmes. It was introduced in 2001, but delays with its transposition meant that it only became a formal requirement in 2004.

The SEA contributes to the systematic and structured consideration of environmental concerns (including biodiversity) in higher level decision making at early stages of the policy planning process. The process of identifying and developing mitigation measures, including offsets, can normally be carried out in the first instance as part of the SEA process. SEA provides the best opportunities to consider alternatives that locate developments in areas that avoid significant impacts as much as possible, and if necessary to identify sites where offsetting could provide valuable benefits (South West Ecological Services et al, 2004). The SEA also complements other Directives and therefore provides scope for a coordinated approach.50 More precisely where the obligation to carry out assessments of the effects on the environment arises simultaneously from the SEA Directive and other EU legislation, such as the Birds Directive, Habitats Directive, or the Water Framework Directive, in order to avoid duplication of the assessments, the Member States may provide for coordinated or joint procedures fulfilling the requirements of the relevant Community legislation.

The SEA has the potential to overcome many of the limitations of project-based EIA by providing opportunities for conservation and sustainable use of biodiversity to be considered as a fundamental part of strategic decision-making, rather than as a single specialist topic that needs considering on a more reactive basis. SEA can support and enhance EIA processes, as well as other applicable environmental assessments for a particular plan/programme by:

• building biodiversity objectives into land-use, urban or sectoral policies, plans and programmes, at any point between international and local levels;

• identifying and managing cumulative impacts, which would be considered insignificant if assessed in isolation, but which may pose severe threats to biodiversity if assessed in combination with other similar impacts;

• identifying biodiversity-friendly alternatives and mitigation strategies that would be compatible with sustained delivery of ecosystem services;

• ensuring effective monitoring programmes are in place to provide information about biodiversity to inform baseline assessments carried out for EIA; and

50

The SEA Directive has formal and explicit links with the Habitats, EIA and other directives (WFD, Nitrates, Waste, Noise and Air Quality Directives) which contain requirements for the establishment and assessment of plans and projects in sectors covered by the SEA (COM(2009) 469) and can be used to streamline other assessments.


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• allowing biodiversity specialists and decision-makers and/or planners to engage and to develop a shared understanding of biodiversity requirements.

The SEA process involves a number of steps, namely screening, scoping (including the development of the Environmental Report), public consultation and monitoring (including assessing data availability). The application and effectiveness of the SEA Directive amongst the EU Member States varies considerably, both in terms of the institutional and legal arrangements, and the actual implementation of the SEA procedures. This is partly due to the fact that Member States have considerable discretion over how to implement many elements of the SEA; the SEA Directive is fairly ambiguous on many aspects and there is a lack of guidance that sufficiently clarifies some of the issues.51

This ambiguity means that for instance, with regard to NNL, the current application of the SEA Directive in the different Member States tends to neglect:

• wider environmental impacts such as species connectivity within SEA screening and assessment (particularly with regard to the coherence of the Natura 2000 network);

• a wider range of alternatives from the earliest stage of the process (which could strengthen the observance of the mitigation hierarchy); and

• the potential to apply SEA to policies in the screening process (as well as plans or programmes) which could have a greater impact on biodiversity and ecosystem services.

In order to address these shortcomings, two options to strengthen SEA and its implementation were identified by the NNL Policy Options Study (Tucker et al, 2014). These have been retained in this study and are described below.

Strategic Environmental Assessment Policy Option 1 (SEA 1): Improved implementation of the SEA through capacity building and guidance

This option includes two aspects meant to improve the implementation of the SEA Directive:

1. the preparation and dissemination (including through workshops / training events) of comprehensive, more detailed and up to date guidance on the application of the SEA directive covering key areas of ambiguity; and

2. raising the capacity within Member States through targeted campaigns for recruitment and training of SEA experts.

51

Committee of the Regions (2010) Opinion of the Committee of the Regions on Improving the EIA and SEA Directives. Available from: http://ec.europa.eu/environment/eia/pdf/cdr38-2010%20fin%20c.pdf


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Preparation and dissemination of guidance

As mentioned above, there is considerable variation in the implementation of the SEA Directive across the EU Member States. This is likely due to the fact that some provisions of the SEA Directive create powers rather than duties which are discretionary rather than mandatory. Some examples include:

• the discretion left to Member States in transposing Art. 3.2.a, i.e. the definition of Sector Plans and Programmes;

• the organisation of the scoping process is entirely left to the Member States with the exception of the obligation to hear concerned authorities; and

• the Directive and the SEA Guidance leave several issues related to monitoring and implementation unclear and much is left to the discretion of Member States, which in effect may leave uncertainties in the practical application of Art. 10 of the SEA Directive.

EU level guidance is limited to the links between the SEA and the EIA Directive (Sheate et al, 2005), and guidance on the integration of climate change and biodiversity issues into SEAs (McGuinn et al, 2013). A more comprehensive guide was published in 2005 which sought to clarify the objectives, scope, general obligations, the environmental report, the consultation and monitoring processes (EC, 2005). However, the Committee of the Regions highlighted in 2010 the need for further and more detailed guidance which clearly defines, for instance:

• the scope of the Article 3(2)(a) and (3) regarding whether a plan or programme is like to have environmental effects;

• what information the environmental report must contain; • reasonable alternatives (e.g. including explicit consideration of alternatives most

likely to result in a NNL outcome, thereby improving the extent to which ‘best possible outcomes’ might be recognised and factored into planning and decision-making, as opposed to an emphasis on the ‘best of the worst’; and

• methods and indicators to be used for the monitoring of significant environmental effects and of protective and corrective measures.

Moreover, a report concluded that screening processes should consider the implications of a plan or programmes areas that have important connectivity functions between Natura 2000 sites as well as the sites themselves (Arcadis and IEEP, 2010). Guidance could be developed on methods for assessing impacts on the coherence of the Natura 2000 network and application of the precautionary principle to such issues. This could be supported by efforts to improve awareness about possible functional roles of land outside Natura 2000 sites.

There is also limited guidance available on best practice approaches to SEA for biodiversity and ecosystem services as well as little documented information on how objectives and outcomes for these have been formulated in the SEA process. For example, one of the potential benefits of SEA is the streamlined provision of baseline data that can be used in EIAs without the need for duplication – this benefit is rarely realized owing to a lack of mechanisms for information exchange and sharing.


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Guidance for Member States on how to identify land already protected for biodiversity, or where necessary, suitable land for compensation, would also help strengthen the role of SEA in achievement of NNL.

Many Member States have produced national guidance on some of the issues above.52 Although this serves to clarify the national use and application of the SEA Directive, the lack of unifying EU-level guidance means that variation between Member States persists, both in the quality and quantity of SEAs being conducted.

Under this option therefore, more comprehensive, more detailed and up to date EU guidance would be prepared to unambiguously clarify the issues listed above and harmonise practice between Member States. Training events (e.g. workshops) would also be held in order to raise awareness and improve capabilities in the application of the SEA Directive.

Improving capacity

The Committee of the Regions recognised that there is a “vital need” to develop SEA-related capacity in Member States (COWI, 2009). Training of SEA experts could help to firmly establish the SEA Directive and improve its use and application by Member States. Given the SEA Directive’s crucial and strategic role in upstream integration of environmental concerns, ensuring that capacity is sufficient to meet this important challenge is key. More specific capacity with respect to biodiversity assessment and data integration would be particularly advantageous.

Strategic Environmental Assessment Policy Option 2 (SEA 2): Improvements to the SEA Directive, including improved screening criteria

Under this option, amendments would be made to the SEA Directive relating to, in particular:

• the screening of plans and programmes; and • harmonising the SEA Directive and the SEA Protocol.

The SEA Directive would be amended in order to tighten requirements and limiting the discretion left to Member States regarding which plans and programmes are subject to SEAs by setting clearer expectations for the screening of plans and programme and the use of screening criteria.53. The binding nature of these

52

E.g. Member States report that extensive national guidelines have been developed providing support for the identification and selection of the reasonable and relevant alternatives in individual procedures. The vast majority of Member States, however, have refrained from defining how this should take place 53

The majority of Member States have simply transposed the general categories of plans and programmes as listed in Article 3(2) (a) of the Directive, Member States that comply with the Directive by simply adopting the Directive text in each case will have to consider if the characteristics set forth in the Directive are applicable to the plan or programme in question. National SEA systems that are founded on a simple translation of the Directive's text in this regard are thus more vulnerable to


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measures means that their likely impact on biodiversity and ecosystem services is likely to be enhanced (see Tucker et al, 2014) whilst still respecting the subsidiarity principle and the different transpositions of the Directive within Member States.

Tightening requirements in other areas where there is considerable variability between Member States could also be reviewed (e.g. the assessment of alternatives, criteria used for determining 'likely significant environmental impact', monitoring etc.). Findings from desk studies (e.g. Marsden, 2008; Risse et al 2003, COWI, 2009) suggest that the general requirements prescribed by the Directive are not restrictive enough and leave too wide discretions to Member States.

The SEA was transposed in 2004, and its implementation was reviewed in 2009 by the Commission. The Commission is now starting to prepare the 2nd implementation report for 2016, which will evaluate the application and effectiveness of the Directive across the EU and assess the potential for simplification. According to the Commission’s work programme, this may lead to a REFIT evaluation. Moreover, the entry into force of the UNECE SEA Protocol54 is likely to also mean that the SEA Directive might need to be improved to take this development into account (e.g. by extending the scope of the SEA Directive to better address certain issues such as climate change, biodiversity and risks). Whilst the Protocol is broadly influenced by the existing SEA Directive, there are a number of key distinctions that would ideally be harmonised with improvements to the Directive. These include:

a wider focus on environment and health impacts, including a requirement to engage with environmental and healthcare authorities as part of the screening process – these bodies then have influence on what plans or programmes should be subject to SEA, and a written justification needs to be published;

a stronger emphasis on the consideration of impacts on biodiversity;

ensuring the Environmental Report is more explicitly a document for public participation, with more stringent participation requirements;

expanding the scope of SEA, so that policies can be subject to SEA, as well as plans and programmes; and

incorporating more precise requirements regarding screening thresholds, i.e. expectations on authorities are more defined.

failure to comply with regulations at the application level, simply because a formal position must be reached in each case a plan or programme is under scrutiny. (Committee of the Regions (2010) Opinion of the Committee of the Regions on Improving the EIA and SEA Directives) 54

The ‘Kyiv Protocol’, or ‘Protocol on Strategic Environmental Assessment in a Transboundary Context’, entered into force in 2010 and complements the international ‘Espoo Convention’ on EIA and ensures that individual parties integrate environmental impact assessment into their plans and programmes at the earliest stages. The UN Economic Commission for Europe Member States (36 states plus the EU) were signatories to the convention, and whilst the negotiation of the convention was heavily influenced by the SEA Directive, there are a number of important differences between the two legal instruments, including the geographical scope and the integration of environmental concerns into the preparation of policies and legislation.


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Better implementation of the SEA Directive offers a means to strengthen adherence to the mitigation hierarchy (Figure 8-1). The relevant State of the Environment report should inform the specification of a baseline prior to the adoption of a plan or programme. Initial impacts can then be estimated, and avoidance of impacts, minimisation of impacts, and then (where necessary) restoration and rehabilitation works can be undertaken towards ensuring NNL outcomes. Figure 8-2 summarises the steps for undertaking an SEA and where the proposed measures would fit within this process.

Figure 8-1 The potential contribution of SEA to no net loss in relation to the mitigation hierarchy


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Figure 8-2 SEA procedure and proposed measures

SEA 1

Developing detailed and comprehensive guidance would raise awareness and capabilities thereby improving the quality of SEAs being delivered. Improved capacity in terms of more SEA experts and better training of current SEA staff would also improve the quality of SEAs being delivered. This will require additional effort and time in research, information gathering and preparation of the SEA, and should result in changes in practice in programme implementation. This would mean that there would likely be more and better changes made to plans and programmes resulting from SEAs. The number of SEAs being conducted might also increase due to a better screening procedures and an understanding of the SEAs role and scope resulting from the guidance, better awareness and improved capacity. This would in turn lead to more plans and programmes that have positive outcomes for the environment and biodiversity more specifically.

SEA 2

Implementing changes to the SEA Directive to tighten screening requirements in order to limit discretionary powers, would likely reduce variation between Member States and increase the number of SEAs being conducted as fewer plans and programmes would ‘fall through the gap’. This would, in turn, lead to more plans and programmes that have positive outcomes for the environment and biodiversity more specifically (see Box 8-1). Aligning the SEA Directive more closely with the SEA Protocol would improve the quality of SEAs being conducted. In particular it is likely that SEAs would then take biodiversity considerations into greater account. This would lead to more changes to the plans and programmes related to biodiversity which would help to deliver NNL.


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Environmental

No evidence is available of the value of the benefits of SEA, so the following discussion is purely qualitative.

At present, the SEA Directive links to biodiversity and ecosystem services primarily through reference to the Habitats Directive and possible impacts on the Natura 2000 network, and through information requirements for environmental assessment, which is required for certain types of plans and programmes listed in Article III of the Directive (UK Office of the Deputy Prime Minister, 2005). A growing body of international evidence points to the need to manage biodiversity and ecosystem services at a ‘landscape scale’ (i.e. taking into account wider drivers of change and potential pressures on ecosystems over time) (e.g. Muller et al 2010) and this is in keeping with the stated philosophy of the SEA Directive.

However, many issues have been reported in the implementation of a coordinated approach to SEA and the Habitats Directive in Member States. Development of official guidance in this regard is a key example of how the proposed measures can support Better Regulation and implementation objectives and maximise EU added value of SEA procedures. There are currently few guidance documents available with only general information relating to the assessment of biodiversity and ecosystem services and integration of the Habitats Directive within SEA. In particular, most screening mechanisms appear insufficient to assess whether a plan or programme is likely to be detrimental to the coherence of the Natura 2000 network, for example, by impacting ecologically important areas outside the site area (Arcadis & IEEP, 2010).

A recent example from Slovenia points to the need for more consistent and earlier consideration of biodiversity within infrastructure plans (see Box 8-1).

Box 8-1 Slovenia example: SEA of a transport plan around a Natura 2000 area – underlining the case for early environmental scoping

The need for better capacities and guidance as a means to foster earlier consideration of alternatives is underlined by the substantial costs and delays that can be incurred in the absence of early engagement. One example of a recent plan for constructing a bypass around Skoflijca, near Slovenia, points to the scale of these costs. The Ministry of Transport first submitted a proposal for the plan to the local authority in 2005 – triggering a formal SEA procedure.

A limited scoping procedure for the Environmental Report failed to highlight significant environmental challenges. Initially, three alternatives were developed in accordance with these parameters. However, subsequent detailed analysis revealed that all three conflict with a local Natura 2000 site with key importance to a protected butterfly species and local bird species. The proposed sites also contained a cultural monument and important agricultural area. After almost a year, planners came up with another alternative, which failed to completely avoid the Natura 2000 site or agricultural land. Comparative studies made in 2007-2012 were ineffective in terms of identifying the best feasible alternative, whilst subsequent ERs also failed to contribute to the solution.


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The only outcome of these measures was an attempt to optimise the existing alternatives through additional mitigation measures. The final outcome reflected eight years of delays and administrative expenditures, with habitat mitigation measures accounting for approximately 60% of the plan implementation value – costs that could have been avoided through more detailed early scoping and engagement with the Ministry of Environment and other local environmental data.

Source: (Kontić & Dermol, 2015) Confronting reality in SEA in Slovenia: costs and benefits. Environmental Impact Assessment Review, Vol. 50, pp. 42-52.

In the Czech Republic there is some limited guidance on ascertaining the significance of biodiversity impacts during the screening assessment in accordance with the state nature conservation act, whilst in France, official guidance states that ‘all relevant environmental authorities’ should be invited into the assessment process and should coordinate in assessing possible impacts, for example (McGuinn et al, 2013). Nonetheless very few Member States have established monitoring methods (in accordance with Article 10 of the Directive) or drawn up guidance on how to establish monitoring indicators. The lack of appropriate national guidance suggests insufficient implementation of the monitoring requirement in most Member States (EC, 2009).

SEA 1

Development of official EU guidance should strengthen the integration of biodiversity concerns into decision-making processes for SEA. This option could be expected to result in moderate benefits for biodiversity, through better integration and use of data, despite the non-binding nature of this guidance. It could be expected to result in moderate benefits for ecosystem services through greater strategic integration of these benefits within screening and scoping procedures. Impacts on biodiversity emerging as a result of plans or programmes can be cumulative over time. SEAs should therefore avoid ‘snapshot’ analyses and consider trends with and without the proposed plan or programme and its alternatives (in accordance with Annex I(b) to the Directive).


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Box 8-2 Spanish example: 2000-2007 transport infrastructure development plan, Spain –biodiversity outside protected areas

Improved guidance can support assessors in understanding the importance of wider environmental impacts from a plan or programme on conservation features. The Spanish Ornithological Society has developed a methodology to accurately determine the relevance of territories for biodiversity conservation. This methodology, which has been developed for SEAs for large infrastructure plans, was applied to the 2000-2007 Spanish transport infrastructure plans. It concluded that SEAs cannot limit themselves to assessing the effects of plans and programmes on protected areas or even networks of protected areas, as the preservation of these depends upon the quality of their surroundings.

SEAs for large scale infrastructure development in particular must contribute to conserving biodiversity not only inside but also outside the system of protected areas and promoting biological connectivity by adopting a scope that is commensurate to the plan’s potential impact.

Source: SEO Birdlife (2013).

Particular benefits could be gained from the integration of ecosystem services within the scoping process, and through the promotion of simple tools and datasets that can integrate stakeholder concerns at an early stage without adding significantly to the burden of assessment. Existing national level guidance on SEA (such as in the UK) emphasises the importance of integrating stakeholder concerns at the earliest stages of decision-making. In this regard the additions proposed under SEA 1 appear to be much in keeping with the ‘spirit’ of the Directive.

The propensity of SEA findings to be considered within plans and programmes depends largely on the quality of the information provided. Generally speaking, poor quality or limited documentation is likely to be taken less seriously by decision-makers. Whilst the quality of documentation for SEAs appears to have improved in subsequent years through the provision of quality review packages and capacity-building in some Member States, this is less evident with regard to biodiversity and habitat conservation issues (Fischer, 2008). In most Member States, the authority responsible for undertaking a plan or programme also has responsibility for undertaking SEA. This arrangement relies heavily on checks and balances for quality assurance, and where the authority concerned pays insufficient regard to impacts on environmental resources early in the project development this can incur significant delays later in the process (see the example from Slovenia, in Box 8.1). In some countries the environmental authority has a direct role in overseeing or quality assessing the SEA (such as Spain, where the environmental agency prepares the draft scoping report, which can highlight wider strategic concerns at an early stage; see Box 8-2) (Aschemann, et al, 2010).

Capacity-building measures and guidance could thus be of substantial value to those authorities tasked with undertaking SEAs – outlining examples of best practice in environmental screening and scoping. Guidance would be particularly beneficial in helping authorities with production of the Environmental Report – describing how to use this as a strategic, analytical tool for communicating with stakeholders and


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ensuring that a statement of information gathered through the early consultation process is included within the report – thus ensuring consistency with the SEA Protocol. The added value of such an approach in aiding communication is underlined by examples such as the SEA of the Welsh Rural Development Plan (Box 8-3), which facilitated strategic consideration of climate change and biodiversity issues across the SEA.

Box 8-3 UK example: SEA of the Rural Development Plan, Wales – early engagement of stakeholders

Earlier consultation of stakeholders (e.g. within the scoping process) can be highly valuable for understanding the wider impacts of a plan or programme on biodiversity. The Welsh Government commissioned an SEA to be undertaken alongside its Rural Development Plan 2007-2013. The SEA is notable for early and effective engagement with stakeholders during the scoping phase. This led to strategic consideration of climate change and biodiversity impacts across the SEA. The SEA is also a useful example of the use of network analysis and the consideration of cumulative impacts with regard to biodiversity and climate change. The analysis includes consideration of potential buffer zones and encourages the establishment and maintenance of wildlife corridors and stepping stones. It also requires individual plans to consider how their outputs could feed into large-scale habitat restoration plans.

Source: Welsh Government (2013)

Guidance on integrating ecosystem services into SEA processes can also help facilitate broader strategic discussions between policy stakeholders and support earlier consideration of policy and plan alternatives, as demonstrated in the application of such guidance to SEA of ICZM in Portugal (Box 8-4).

Box 8-4 Portugal example: SEA of Integrated Coastal Zone Management – an example of an ecosystem services approach

Guidance on the better use of the ecosystem services approach can point to relatively simple ways to analysing ecosystem service impacts of a plan or programme. An ecosystem services approach is also a useful tool to enable the strategic consideration of biodiversity which would otherwise be very difficult in high level plans. The SEA in question did not conduct a detailed analysis and assessment of existing ecosystems and their services in the Portuguese coastal zone. Rather, it identified and compared policy options in terms of their risk or benefit to strategic level ecosystem services that were identified through consultation with key policy stakeholders. This required a consideration of strategic ecosystem services that could be affected by policy choices relevant to ICZM: e.g. the management of coastal dynamics, especially in vulnerable zones; the maintenance of the productivity of coastal zones; the maintenance and conservation of the availability of natural and cultural heritage and biodiversity.

Source: Partidario (2011) Including ecosystem services in coastal management by using SEA


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It is important to caution that, even with substantial investments in guidance and capacity-building measures with regard to biodiversity and ecosystem services, actual impacts on plans or programmes with regard to consideration of alternatives may be modest. Therivel and Minas (2002) reflected on environmental / sustainability appraisal (i.e. SEA) practice in English local land use planning. They found that overall, 70% of all appraisals had led to concrete plan changes. What is of additional interest here is that the influence of SEA appears to be increasing, similarly to EIA. Thus, in an earlier study, Therivel (1995) found that only 50% of appraisals had led to plan changes.

Fischer (2002) analysed 60 SEAs for spatial and transport policies, plans and programmes from the UK, the Netherlands and Germany, partly using statistical analysis in this context. He found that in the transport sector, SEA application had led to a significantly greater consideration of explicit sustainability objectives, targets and proposed measures. Furthermore, in 2007, the same author reflected on different SEA systems in 10 countries (US-California, Western Australia, South Africa, The Netherlands, Italy, Finland, Germany, the UK, New Zealand and Canada). The formalised Dutch EIA-based SEA system, in particular, was considered to be highly effective. Consultation undertaken by Farmer et al (2015) highlighted the added value of SEA in structuring (largely informal) early discussion of alternatives within plans and programmes, and noted the particular relevance of these considerations to avoidance and minimisation of environmental impacts. This suggests that improved guidance and capacity-building measures could support assessors in the early consideration of impacts.

Normally, whilst SEA provisions provide for specific environmental elements to be considered, there are frequently no binding requirements and the choice of relevant components is largely left to the discretion of the assessor in most Member States. As a result, habitat conservation considerations (beyond regulatory requirements to ensure the robustness of the Natura 2000 network) are relatively marginal within environmental considerations of SEAs. This was found in Lowry and Fischer’s (2008) analysis of 22 European transport policies, plans and programmes, which pointed to the low percentage of assessments using habitat loss as an environmental indicator, in comparison to more frequent concerns such as climate change, air pollution and noise pollution (Figure 8-3).


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Figure 8-3 Percentage of different types of SEAs (across 22 EU examples) using different environmental indicators

Source: Lowry and Fischer (2008)

Environmental indicators are typically addressed within different methodological approaches. SEA 1 capacity-building and guidance measures could highlight the potential to make greater use of existing resources hitherto not integrated into assessments. Fischer (1999) noted the tendency to focus on specific methodologies depending on sectoral traditions (e.g. modelling in transport planning and overlay mapping in land use planning), highlighting the growing importance of geographic information systems (GIS) in connection with the INSPIRE Directive (2007/2/EC). Developing capacities with regard to strategic use of GIS information offers significant potential to further the integration of biodiversity and ecosystem services into early assessment, particularly where in line with the Mapping and Assessment of Ecosystems and their Services (MAES) initiative.

Centralised databases can also add substantial cumulative value to SEAs by helping to build a pool of knowledge and data from previous assessments, which can help increase the efficiency and effectiveness of SEAs over time, as demonstrated by the Scottish SEA Gateway (Box 8-5).


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Box 8-5 UK example: SEA Gateway (Scotland) – a driver for data integration and capacity-building

According to Farmer et al (2015), Scotland has been seen to benefit substantially from the development of a centralised database for SEA practitioners (‘SEA Gateway’) that provides a central repository of environmental data, document templates and examples of best practice to inform decision-makers in undertaking screening and assessments. The development of this resource has been linked to developing in-house capacities in terms of a dedicated team of SEA assessors within national and local government. This has resulted in both direct financial benefits from reduced consultancy fees, but also benefits in terms of developing a ‘bank’ of expertise and knowledge from undertaking many SEAs. This means that bespoke SEA work can be undertaken efficiently in terms of experiences on approach, knowledge of the environmental baseline and issues, easy access to information and ability to tailor the overall approach to the time period in which the plan, programme or strategy is to be developed.

Considerable effort has been expanded on explaining the SEA process to public sector employees and what it is intended to achieve, with the result that closer alignment of local authority plans and programmes with environmental objectives has been observed. Although there are still capacity issues, managers and officers are now more likely to engage with SEA work on a voluntary basis.

The regularly updated State of the Environment Report can be a particular support to generation of scenarios and modelling, and other data requirements relating to scoping and production of the Environmental Report. The key benefit of such a resource is to provide accurate environmental baseline data and to foster better integration of existing datasets. Given that the majority of SEAs address land use plans (involving a range of datasets held across different public sector interests) a common resource for SEA data can be a useful means to demonstrate the added value of SEA and promote better integration of data.

Source: Farmer, et al (2015)

SEA 2

Improved screening criteria relating to possible environmental impacts could yield substantially stronger environmental outcomes through SEA, particularly with regard to wider inclusion of biodiversity and ecosystem services within screening processes. This would take the form of clear guidance for inclusion or non-inclusion of plans or programmes within SEA procedures, addressing the inconsistencies observed under the current approach.

As highlighted above, there is a good deal of discretion as to what plans or programmes are subject to SEA, so in many cases the decision of whether to apply SEA will be applied on a case-by-case basis. Two examples of integration of environmental impacts into screening processes are the Czech Republic and Latvia, which complement the basic criteria laid down in Annex II of the SEA Directive a with additional criteria relevant to the local context. In the Czech Republic these criteria are:

effectiveness of the defined solution alternatives to achieve the pursued objectives of the plan/programme; and


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relevance and vulnerability of the area which might be affected, with regard to population density, settlement pattern and level of urbanisation.

In the Czech Republic there is also Guidance on significance of impacts evaluation during the assessment in accordance with the Art. 45i of the Act No. 114/1992 Coll., on the Protection of Nature and the Landscape. An average of 12 SEAs are undertaken each year, typically focusing on territorial development, tourism and transport infrastructure. However, in Latvia, an average of 88 SEAs are conducted each year, which would appear to be relatively high given the overall population size. Applications in Latvia are typically more local in scale: particularly town and country spatial planning documents. SEAs are also applied to plans in agricultural and fisheries sectors (COWI, 2009).

Economic

Costs of implementing SEA in the EU were analysed by Farmer et al (2015) and an average cost of €62,777 per SEA was identified (drawing on 25 plans and programmes across 4 Member States over a period of 10 years), with a substantial majority of these costs attributable to the time and resources required to produce the environmental report. This is largely consistent with the earlier estimates produced by COWI (2009). Farmer, et al (2015) provide a cross-country comparison of SEA costs, pointing to the substantial resource inputs associated with the production of the Environmental Report (Table 8-1). Cost estimates were notably largely consistent between Member States, despite differences in the plans and programmes involved, wage expenditures and the relative allocation of resources.

Table 8-1 Cross-Member State comparison of days and costs

Hungary Finland Netherlands Scotland

Days Costs Days Costs Days Costs Days Costs

dis

trib

uti

on

% Screening 19% 11% 0% 0% 5% 11% 6% 10%

Preparing the Environmental Report

60% 59% 49% 49% 20% 47% 57% 33%

Consultation 21% 12% 51% 50% 48% 24% 14% 30%

Other 0% 18% 0% 1% 27% 18% 23% 27%

Average cost / number of days

272 €68,549 277 €60,011 112 €61,123 208 €61,425

Ratio of public-private costs

1:16 - 0 - 1:1.9 - 1:1.5

Ratio of public-private wages with Member State

- 1:6 - 1:2.5 - - - 1:2.7

Public wages across Member State

- €52 - €217 - €180 - €146

Source: Farmer, et al (2015)

As COWI (2009) underlined, there are major differences between Member States in the number of SEAs conducted each year. In 2007, they calculated an average of 169 SEAs per year per Member State (although this is likely to have increased subsequently). Based on an average cost of €62,777 per SEA (of which, €37,096


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represented direct public administration costs and €25,738 costs of engaging private consultants), this gives an indicative average cost of €10.6 million per Member State, per year. Assuming a trend annual growth rate of 2%55 per year in the number of SEAs undertaken since 2007 gives a figure of 198 SEAs on average in 2015 (at a cost of €12.4 million) 219 SEAs per year in 2020 (€13.8 million) and 267 SEAs per year by 2030 (€16.8 million).

As the differing numbers of SEAs by Member State in the COWI study underline, costs are likely to differ substantially between Member States and the above indicative ‘average’ should be treated as illustrative, particularly as there is no evidence of a linear relationship between GDP/population size and the number of SEAs undertaken each year (COWI, 2009).

Costs of engaging consultants equate to €4.35 million per Member State per year, or approximately 201 full-time equivalent jobs based on EU average FTE salaries (JRC, 2013). Again, it is important to underline this is an ‘illustrative’ average and impacts will differ for larger and smaller Member State. As fee rates for SEA consultants are likely to exceed average wage rates, the figures are likely to overstate the number of jobs involved.

In some Member States, the number of annual SEAs carried out is relatively high, but experience is spread across different authorities (particularly where planning authorities are responsible for conducting the SEA) (COWI, 2009). Notably, some Member States such as Finland, the UK (Scotland) and Ireland have invested in developing in-house government capacities and national ‘portals’, addressing a range of issues relating to screening, scoping and production of the Environmental Report, as well as providing a repository of data relating to local environmental trends. This has been seen to yield benefits in terms of reduced consultancy fees and more efficient means of establishing environmental baselines through better access to and integration of data. In each case, the development of central resources and capacities has been seen to substantially outweigh the cost of these measures (Farmer et al, 2015).

SEA 1

The main costs incurred in delivering this option include:

a. Preparation and dissemination of guidance at EU level on the application of the SEA Directive, covering key areas of ambiguity. This could be achieved through a one-off expenditure of €500,000 to cover the costs of guidance development, dissemination and communication activities and the delivery of EU level workshops. This is broadly in line with the cost of developing previous pan-EU guidance materials, with additional costs pertaining to the procurement of technical expertise and translation.

55

This represents our baseline estimate of annual increase in the number of SEAs, based on historical trends. Whilst SEA2 is expected to result in a further increase in the number of SEAs undertaken, SEA 1 is not expected to result in any additional SEAs.


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b. Capacity development at Member State level. Costs for capacity-building and training will vary by Member State, according to the size of each country, diversity of institutional and regulatory arrangements, and differences in salaries.

However, a significant effect on capacity could be achieved by employing a team of SEA experts responsible for training, awareness raising and information dissemination, working with practitioners at relevant levels across the EU. Employing an average of 10 advisors per Member State, or 280 across the EU, each with an average budget of €80,000 to cover salary, overheads and a budget for communications and events, would imply an annual cost of capacity building of €22.4 million across the EU28. It should be noted that the cost will vary per Member State according to the size of the country and level of SEA activity to be influenced.

It is important to consider that many of the costs associated with SEA 1 and SEA 2 pertain to observance of best practice in SEA more generally (rather than specifically to biodiversity objectives). Therefore, there could be additional justification for the investments envisaged under these options.

SEA 2

Economic impacts relating to the proposed changes in screening largely relate to their potential to result in more SEAs being undertaken, resulting in more administrative costs to public authorities, in particular. Evidence suggests that recovery of costs from project proponents is particularly weak with regard to the SEA Directive, owing to its integration in many cases within wider policies and regulatory frameworks (Farmer, et al 2015).

Cost estimates have been calculated using Farmer et al (2015) data on the costs of SEA, but there is strong evidence that the costs of SEA have tended to decrease over time with increasing authority capacities and familiarity (COWI, 2009).

SEA 2 would be expected to lead to three types of additional costs:

1. Increased costs from enhanced screening procedures.

2. An increase in the number of SEAs undertaken, as a result of enhanced screening procedures.

3. Increased costs through more thorough consideration of alternatives within SEA, with the objective of achieving no net loss.

Increased screening costs

Revisions to the screening criteria that result from an increase in the number of SEAs carried out are likely to have disproportionate impacts in some Member State as a result. Modification of screening criteria, to include oversight and justification by the relevant environmental authority, could be expected to result in a moderate increase in overall administrative costs because of the additional time investments needed. Farmer et al (2015) point to screening time at approximately 10% of overall


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costs for SEA56. Inclusion of such oversight and justification would help ensure consistency with the SEA Protocol.

In some Member States, the discretion of regional authorities to set screening thresholds means that screening is undertaken on an informal basis, or many plans or programmes are excluded from the assessment altogether. Assuming stronger definition and enforcement of screening criteria through revisions to the SEA Directive might be expected to lead to a further increase in costs equivalent to 10% of the average cost per SEA (i.e. doubling current estimates of the cost of screening). These costs would vary by Member State. For those Member States that undertake more detailed screening at present, SEA 2 is unlikely to incur additional screening costs. For Member States where screening is less formalised within regional or local legislation, this could be expected to result in significant increases in time and resources allocated to screening, albeit providing more opportunities for consideration of stakeholder needs at an early stage.

Costs of increasing number of SEAs undertaken

Enhanced screening procedures would be expected to increase the numbers of SEAs undertaken. Assuming a 5% increase on the baseline (based on previous trends of marginal changes in the volume of SEAs undertaken year-on-year – see COWI, 2009) would increase the number of SEAs undertaken to an average of 208 SEAs per Member State per year in 2015, 230 SEAs per Member State per year in 2020, and 280 SEAs per Member State per year in 2030.

Increased costs of consideration of alternatives

Costs relating to mandatory consideration of NNL alternatives will again differ between plans and programmes and Member States, but some indicative costs can again be gained from the EIA Directive Revision, which points to mandatory assessment of ‘reasonable alternatives’ (including a zero alternative) adding around 5% extra time to the EIA process (Farmer, et al, 2015).

Overall costs

Under a business as usual scenario, it is assumed that an average of 198 SEAs are undertaken per Member State in 2015, increasing to 219 in 2020 and 267 in 2030. At an average cost of €62,777 per SEA, this gives total costs of €12.4 million per Member State in 2015, increasing to €13.7 million in 2020 and €16.8 million in 2030.

56

Farmer et. al (2015) undertook detailed analysis of costs for each stage of SEA in four Member States and found that whilst overall costs for undertaking SEA were broadly similar, costs associated with screening processes vary substantially. Screening in some cases can be a relatively limited exercise for smaller projects where costs amount to only €260 per PP, or a larger-scale undertaking incurring more substantial costs – typically screening amounted to 10% of overall costs for undertaking an SEA. A common factor is that each of the Member States analysed have detailed screening criteria and typically undertake a large volume of SEAs each year.


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The overall effect of the changes brought about by SEA 2 would be to increase the cost per SEA undertaken by 15% and the number of SEAs by 5% annually. This would increase the cost per Member State of undertaking SEAs by €2.6 million in 2015, €2.9 million in 2020 and €3.5 million in 2030. The overall increase in costs across the EU28 would amount to €72 million (+20% above baseline) in 2015, €80 million in 2020 (+20% above baseline) and €97 million (+20% above baseline) in 2030.

Social

SEA 1

SEA 1 would create additional employment opportunities for environmental professionals and advisors engaged in training and capacity building measures, based on average resource inputs to SEA derived from Farmer et al (2015). Increased focus on biodiversity aspects could create opportunities for environmental professionals within government and external consultants during the scoping and reporting processes. Additional social impacts could accrue from the wider opportunities for stakeholder engagement within the SEA Consultation process as a means of ensuring consistency with the Aarhus Convention/SEA Protocol. The Protocol requires stakeholder engagement to be undertaken as early as the scoping stage, and country respondents to Farmer et al (2015) that undertake consultation at this early stage indicated that it tended to save time and costs later in the process as well as contributing to greater ‘buy in’ to the SEA process and consideration of alternatives.

SEA 2

Social impacts relating to SEA 2 largely pertain to employment impacts arising from an increase in the number of SEAs being undertaken. This could be positive in some cases (whereby the inclusion of a wider number of plans and programmes leads to additional governmental or private sector employment, as in SEA 1) or could be mildly negative (where the additional administrative burden of SEAs acts as a barrier on certain plans going ahead). Additional expenditure on SEAs and screening procedures could be expected to create new job opportunities across the EU28.


Who faces costs?

Direct costs of developing guidance documents and capacity-development would be incurred by the Commission and Member State authorities. These costs could be low-to-moderate depending on the institutional and regulatory arrangements for implementing SEA in the respective Member States; in countries such as Austria, Spain and Germany, for example, SEA is transposed within provincial, regional and state legislation and this creates substantial differences in the procedures adopted from region to region, whilst limiting the exchange of best practice between authorities. Costs relating to capacity-building would clearly be higher under such systems. Impacts on SEA processes would also be concentrated in public authorities who face majority of administrative costs relating to SEA. In contrast to EIA, where the overall level of cost recovery from projects is relatively high, evidence of cost


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recovery from SEA procedures is less evident because plans and programmes tend to be owned by the public sector and SEA is often integrated within other regulatory mechanisms. This suggests that any additional administrative costs would fall on national and sub-national authorities. Nonetheless, these costs are unlikely to be uniform, since the scope of SEA permeates a range of authorities and regulatory bodies – because these costs are generally moderate, and typically spread over a number of responsible authorities, their overall impacts are likely to be low and generally outweighed by their benefits.

Who benefits?

Society at large benefits from SEA through improvements to environmental quality and provision of ecosystem services. These benefits would be widespread, enhancing biodiversity and environmental quality across the broader landscape, as well as improving the resilience and coherence of the Natura 2000 network.

In keeping with the ethos of the SEA Directive, greater integration of biodiversity issues and data, and in particular, early consideration of NNL alternatives within the SEA procedure offers scope for more detailed stakeholder input and transparency to the process, at an earlier stage. This will encourage proponents of a plan or programme to consider a wider range of alternatives at an earlier stage of policymaking and could contribute to stronger enforcement of the mitigation hierarchy through greater avoidance of unnecessary impacts. Assessment and justification of screening decisions by relevant environmental authorities will help address a lack of information and capacities within the authorities undertaking the plan and programme itself, as well as promote opportunities for co-learning and cooperation (in keeping with the ethos of the Directive). It will also help ensure consistency with key international frameworks such as the Espoo Convention and SEA Protocol.

Linked to this, capacity-building measures and development of centralised ‘one stop shop’ resources offer the potential to save costs and maximise the efficiency of SEA in the long term. Analysis suggests the single greatest cause of delays to SEA procedures are parallel policy processes and regulations outside the scope of the Directive (for example, Natura 2000 conservation measures) so development of in-house administrative capacities can help address this (Farmer et al, 2015).

An ecosystem services approach would also help promote consideration of a wider range of stakeholders who could potentially be affected by a proposed plan or programme. Greater opportunity for early consultation is in line with best practice and can help structure hitherto informal processes of considering alternatives. It also helps promote wider ‘buy in’ to the objectives of NNL and counteracts public perceptions of avoidance and minimisation measures acting as a barrier to economic development.


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Changes in the scoping and reporting processes arising from SEA 1 could be significant in some Member States where there is historically a weak link between biodiversity and SEA owing to the way in which the Directive has been transposed. In other Member States (for example, Finland) where substantial resources are allocated to support environmental planning at the national and subnational level, impacts can be expected to be more limited.

Changes in the number and rigour of SEAs undertaken arising from SEA 2 could be significant at the local or regional level in many Member States, especially where biodiversity impacts beyond Natura 2000 are currently not taken into account.



Both of the measures have strong potential to maximise the benefit of the SEA Directive to biodiversity and ecosystems and ensuring NNL. SEA 1 would improve the knowledge base of integrating biodiversity concerns within SEA processes thereby helping to promote better implementation of the Directive overall and consistency with the SEA Protocol. The guidance-based nature of these measures means that outcomes (and costs) are likely to differ within and between Member States. Overall it would probably produce moderate but unquantifiable benefits at relatively low costs.

The mandatory measures under SEA 2 would help strengthen enforcement and ensure consistency with international best practice whilst respecting the subsidiarity principle. Importantly, the measure promotes better observance of minimum standards for screening whilst also promoting earlier consideration of alternatives – in keeping with the ethos of the Directive. Because of the binding nature of these measures, costs would probably be higher (particularly with an increase in the number of SEAs undertaken), but accompanied by wider benefits to society from greater consideration of biodiversity impacts throughout the SEA process, and at an earlier stage. Benefits would be substantial but cannot be estimated in monetary terms.

The impacts of both SEA measures are summarised in Tables Table 8-2 and Table 8-3.


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SEA 1: Improved implementation of the SEA through capacity building and guidance

Small increase in administrative costs stemming from an increase in SEA and Environmental Assessments

Costs of EU guidance (€500,000 one-off across the EU28)

Additional €22.4 million across the EU for MS capacity-building and information sharing measures

Opportunity costs could be large, as a result of fewer developments proceeding under more rigorously-enforced guidance

Developers of plans or programmes (primarily authorities) could be impacted through additional administrative and data collection costs

Stronger integration of biodiversity and wider environmental trends within scoping and environmental assessment – better integration of environmental data

Fewer delays and costs relating to inadequate consideration of environmental impacts at scoping stage

Benefits of SEAs cannot be valued due to lack of evidence

Society as a whole benefits through the safeguard of valuable ecosystem services

Rural communities benefit from greater consultation input to developments


Increase in number (5%) and average cost (15%) of SEAs conducted as a result of enhanced screening and consideration of alternatives

These are estimated to average €72 million additional costs across EU28 per year in 2015, €80 million in 2020 and €97 million in 2030.

Increase in administrative costs relating to oversight and justification of screening decisions

Developers of plans or programmes (primarily authorities) could be impacted through additional administrative and data collection costs

Improved guidance on screening will encourage authorities to consider wider impacts on biodiversity, including threats to the coherence of the Natura 2000 network.

Cost savings relating to earlier consultation

Benefits of SEAs cannot be valued due to lack of evidence

Society as a whole benefits through the safeguard of valuable ecosystem services and earlier observance of the mitigation hierarchy


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Small increase in administrative costs relating to mandatory consideration of NNL alternatives


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Table 8-3 Overview of potential impacts of options associated with SEA


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual SEA


SEA1 SEA2 Comb-

ined

Incremental benefit






↗ ↗↗ ↗↗

Enforcing the mitigation hierarchy Principle broadly committed to, but not

fully implemented ↗ ↗↗↗ ↗↗↗





Widespread and significant Biodiversity loss

↗ ↗↗ ↗↗

Economic and financial: Costs and benefits: Administrative costs (at EU and MS level); Financial costs (one-off); Financial costs (recurrent); Opportunity costs (uncompensated); Economic Benefits from ecosystem

services (costs are presented with downward arrows (to reflect increasing burden), benefits up)




↗ ↗↗ ↗↗



↘ ↘↘ ↘↘


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Financial costs (one-off) ↘ ↘↘ ↘↘

Financial costs (recurrent) ↘ ↘↘ ↘↘

Opportunity costs (uncompensated) ↘ ↘ ↘




Number / quality of jobs generated No baseline estimated on jobs ↗ ↗↗ ↗↗


Access to nature variable, and affected by overall loss of biodiversity, but range of efforts to increase access underway across the EU. Insufficiency for certain

communities.

↗ ↗↗ ↗↗


Loss of biodiversity and significant erosion of ESS widespread across the EU

will persist for future generations - raising equity concerns.

↗ ↗↗ ↗↗




Clarity


↗↗ ↗↗↗ ↗↗↗

Measurability ↗ ↗ ↗


Enforceability ↗↗ ↗↗ ↗↗


↗↗↗ ↗↗↗ ↗↗↗


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Both of the proposed measures have the potential to contribute to wider NNL objectives (Table 8-4). Both SEA 1 and SEA 2 can help contribute to better implementation and Better Regulation principles by addressing key deficiencies in the current implementation of the Directive and fostering better use of existing tools and resources – bringing the SEA Directive in line with international best practice. SEA 1 will contribute to improving the knowledge base and promoting better management of biodiversity within the existing Directive. SEA 2 will help to enhance the EU added value of the Directive by ensuring greater consistency and standards in the application of screening processes whilst still respecting the subsidiarity principle.

Table 8-4 Summary of the relationship between the policy measures and the four key policy clusters





4: Subsidiarity

A: B&H

directives

B: Wider

policies & tools

A: Evidence based policy

making

B: Guidance for

implementation


X X X


X X


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9 IMPACTS OF NNL MEASURES: SPATIAL PLANNING


9.1.1 Introduction

Spatial planning is the public process for analysing and allocating the spatial and temporal distribution of human activities across a landscape or region. The aims of spatial planning include, in relation to the environment, to use an ecosystem approach to develop a multi-sector strategy that balances and achieves environmental, economic and social objectives. For example, spatial planning is important to help environmental and socio-economic adaptation to climate change, such as identifying areas for managed realignment of sea defences (See Case Studies Box 9-3).

The concept of integrated spatial planning is supported and encouraged in the European Spatial Development Perspective (ESDP)57, which was approved by the Informal Council of Ministers of Spatial Planning of European Commission in Potsdam in 1999. Although it had no binding status, the ESDP influenced spatial planning policy in European regions. The concept of spatial planning has been especially developed with respect to coastal and marine areas, including through various international and EU initiatives on Integrated Coastal Zone Management (ICZM), an EU Council Recommendation on ICZM in 200258, and in July 2014, the EU adopted Directive 2014/89 “establishing a common framework for maritime spatial planning “ in Europe, which includes a set of minimum common requirements. The Directive defines that Member States shall establish and implement Marine Spatial Plans (MSP) and in doing so, the Member States are to take into account land-sea interactions. Land-sea interactions include integrated coastal management. The impacts of MSP are closely linked with the achievement of the objective of Good Environmental Status within the Marine Strategy Framework Directive (MSFD)59. MSFD Descriptors 6 and 7 are directly linked to MSP.

In relation to ICZM within the Regional Seas Conventions, the EU ratified Protocol on Integrated Coastal Zone Management (ICZM) of the Barcelona Convention60.

Spatial planning systems are the methods used by the public sector to influence the spatial distribution of people and activities. In European countries the term refers to the effects of land-use planning, and urban, regional and transport planning, activities. It can take place at different scales, from international (such as Trans-European Networks) to local (such as town plans). In Europe, it is a national responsibility and undertaken at sub-national scales.

The impacts of spatial planning on biodiversity are closely linked to many of the other instruments analysed in this study, including the use of EIAs and SEAs, and the requirement of biodiversity offsets. It is a key tool in implementation of the Habitats Directive measures on the protection of landscape features that support the Natura 2000 network (Articles 3

57

http://ec.europa.eu/regional_policy/sources/docoffic/official/reports/pdf/sum_en.pdf 58

http://ec.europa.eu/environment/iczm/rec_imp.htm 59

Directive 2008/56/EC 60

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and 1061). Spatial plans are a high level plan that provides better context and direction to both, and each are required at particular points in the spatial planning process (e.g. EIA may be required to cover an application to develop a land for an alternative use). Spatial plans usually lay out zones where particular activities are permitted or encouraged, such as for transport, housing and economic development, and also can assist nature conservation (such as by ensuring protected areas for biodiversity are recognised, and supported e.g. by buffer zones) and environmental management purposes (e.g. ecological networks, flood storage areas). Furthermore, it is closely linked with the development of EU, national and sub-national Green Infrastructure networks.

The 2014 study looking at NNL policy options (Tucker et al), examined three spatial planning policy options:

Spatial Planning Policy Option 1 (SP 1): Adoption and implementation of the proposed Directive establishing a framework for maritime spatial planning and integrated coastal management Marine Spatial Planning Directive.

Spatial Planning Policy Option 2 (SP 2): Promotion of best practice spatial planning by Member States.

Spatial Planning Policy Option 3 (SP 3): Development of a Directive establishing a framework for terrestrial spatial planning.

Two of these – SP 1 and SP 3 relate to development of European Directives involving spatial planning. With respect to SP 1, the proposed Directive was adopted by the European Parliament62 and creates a requirement for Member States to transpose the requirements63 into their legislation by 2016. It is excluded from this analysis because the development of maritime spatial plans by Member States by 2021 is now considered part of the BaU baseline. Furthermore, the Directive’s impacts have already been assessed by the Commission, and there are unlikely to be major changes to it before the first round of plans. Its impacts on biodiversity may be improved through use of harmonised metrics, but this is already considered under monitoring, information, guidance and governance issues elsewhere in this study, and so is not assessed separately here.

With respect to SP 3, this is not considered realistic as it would require new legislation that is not currently the focus of European Commission activities (see chapter 2 of this report). As such it would not be able to be developed and have any impact on biodiversity until after 2020, and is therefore also excluded from the analysis.

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The Directive’s measures are summarise at: http://jncc.defra.gov.uk/page-1374 Accessed 09072015 62

Directive 2014/89/EU, establishing a framework for maritime spatial planning. Adopted 23 July 2014. 63

The Directive’s requirements aim for, local, regional and national planning of maritime activities in shared seas to be more compatible through a set of minimum common requirements. Maritime plans will identify all existing human activities, taking into account land-sea interactions, and the most effective way of managing them. As many of the activities run across national borders, the Directive will help Member States co-operate better. (Source: European Commission: http://europa.eu/rapid/press-release_IP-14-459_en.htm Accessed 090715)

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The other spatial planning option – SP 2: Promotion of best practice by Member States - is therefore the focus of the remainder of this Section.

9.1.2 Description of the option

Spatial Planning Policy Option 2 (SP 2): Promotion of best practice spatial planning by Member States

Landscape-scale integrated spatial planning in the terrestrial environment has the potential to provide many environmental benefits, including more effective strategic protection of biodiversity and ecosystem services and the identification of priority areas for restoration and Green Infrastructure enhancement. Such priority areas could be target areas for biodiversity offsetting (as for example carried out in Berlin - see case study below) or agri-environment schemes that benefit biodiversity. Furthermore, as recognised for the marine environment, spatial planning can provide social and economic benefits by encouraging investment (by instilling predictability, transparency and clearer rules), improving coordination and increasing cross-border cooperation. Such benefits may also apply to the terrestrial environment. For example, although many marine areas are a shared (common pool) resource, land typically also provides a range of ecosystem services (e.g. regulation of water resources, carbon sequestration, landscape aesthetics values etc.) beyond the most obvious primary land use, and these provide public goods functions. The European Commission has little competency over planning issues and there is no political mandate for an initiative on spatial planning in the terrestrial environment. Therefore the policy option put forward here is to encourage and facilitate the adoption of good practice in spatial planning for biodiversity across the Members States. This could be achieved by:

preparation of Commission guidance on spatial planning, indicating its potential benefits and most effective approaches and practices;

development of spatial planning mapping tools (e.g. relating to the identification of ecosystem services and Green Infrastructure);

development of a knowledge exchange platform on spatial planning, for Member States and experts to share experiences and lessons and showcase the most successful example of Spatial Planning; and

greater enforcement of environmental legislation that would benefit from Spatial Planning, such as the protection of landscape features under Article 10 of the Habitats Directive (see above).


Good spatial planning can contribute to biodiversity objectives in a number of ways. The RSPB and Royal Town Planning Institute (2013) in the UK, identify 12 principles of good spatial planning, which capture a broad range of issues that contribute to effective planning systems:

1. Planning should be positive, setting out a clear vision for how areas should look and function in the long-term.


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2. Spatial plans should integrate all the issues that affect the development and use of land within a specific territorial area, whether social, economic or environmental.

3. Plans should consider strategic issues that may affect a wider area than the individual plan, including functional ecological areas.

4. Plans should contribute to sustainable development by enhancing the natural environment and ensuring that social and economic development takes place within environmental limits.

5. Plans and projects should be based on up-to-date and scientifically robust evidence, including evidence on the value of the natural environment.

6. Plans and projects should be rigorously assessed for their environmental impacts, and the results used to improve the plan.

7. Alternative options should be considered, particularly alternatives that are less damaging to the environment, and the reasons for rejecting any options should be made public.

8. Public participation is essential. It should be both timely and inclusive of civil society, whether community groups or other stakeholders.

9. Decision-making must be transparent and made by a democratically accountable body or person.

10. Those adversely affected by a planning decision should have a fair opportunity to challenge it.

11. Public authorities should be given the legal powers and resources to enforce planning laws, especially where illegal development is resulting in environmental damage.

12. Plans should be monitored and reviewed regularly.

These principles, such as 6 and 7, reflect the close relationship between the impacts of this policy option and those of the policy options on EIA and SEA, which are key steps in the spatial planning process at which impacts on biodiversity are identified and considered. Some of the problems concerning the treatment of biodiversity in EIA and SEA have been addressed through the publication of guidance (European Commission, 2013a; European Commission, 2013b). However, a more fundamental problem is that many Member States have not developed (or in the case of the UK, have scrapped) large-scale spatial plans that identify desired land uses with respect to environmental, social and economic needs. Therefore, many SEA and EIA processes are conducted in the absence of high level spatial policy and related guidance. Furthermore, practical initiatives to promote and support spatial planning in the terrestrial environment appear to be no longer explicitly on the policy agenda. For example, although the EU’s Green Infrastructure Strategy calls for Green Infrastructure concepts to be integrated into spatial planning it does not explicitly propose improving large-scale strategic spatial planning despite the potential benefits.

Several approaches can be used to strengthen links between spatial analysis and planning activities for biodiversity (e.g. for the management of Natura 2000 sites) and for the management of the natural environment that indirectly benefits biodiversity, such as river basin planning (EEA, 2012). Integration is possible on at least two levels:


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vertical integration with a range of EU requirements, such as planning in other Member States in the same river basin or bio-geographical region, and also with administrations at regional and local levels; and

horizontal integration among participating institutions and with stakeholders.

As Figure 9-1 shows, spatial planning links to incentives working at different levels of the mitigation hierarchy:

as the process through which developments damaging biodiversity are identified, it provides the trigger for applying compensation for damage to biodiversity, such as through compensatory Birds and Habitats Directives measures (see chapter 5), or biodiversity offsets (see chapter 14);

this can deter damaging developments from being proposed, and increase the amount of avoidance, minimisation and rehabilitation actions undertaken for development; and

for residual damage as a result of land use developments, the planning system can apply requirements for biodiversity offsets to achieve no net loss, or net gains.

Figure 9-1 The potential contribution of spatial planning to no net loss in relation to the mitigation hierarchy


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As noted above, the European Commission has little competency over planning issues and this has implications for the potential scope of an initiative on spatial planning in the terrestrial environment. The term ‘spatial planning’ has been largely omitted from the political agenda with respect to terrestrial activities, but the concept is reflected in debates over territorial cohesion and is included in the Treaty of Lisbon. For example, as part of its sixth priority, the EU’s Territorial Agenda for 202064 ‘supports the integration of ecological systems and areas protected for their natural values into Green Infrastructure networks at all levels’. It also encourages integrated development in cities, rural and specific regions and supports the safeguarding and sustainable use of ‘territorial capital’ as well as the ecological functions that it provides.


Spatial planning is the public process for analysing and allocating the spatial and temporal distribution of human activities across a landscape or region. The aim of spatial planning for biodiversity is related to using an ecosystem approach to develop a multi-sector strategy that balances and achieves environmental, economic and social objectives. Regarding EIAs and SEAs, spatial planning develops a high level plan that provides better context and direction to both.


Spatial planning can have a large impact on biodiversity outcomes (positive and negative), but this can often be rather indirect, via the activities and land use developments that it facilitates or constrains. The spatial planning system has a role to help to ensure that the implications of consented activities can be recognised when these activities are planned, in particular through appropriate application of EIA and SEA. However, it is important to note that EIA and SEA do not directly address impacts on biodiversity, but provide a framework by which these impacts may be identified, and quantified. They are discussed in detail in Chapters 0 and 0.

The potential contribution to NNL of promoting best practice in spatial planning through guidance is evaluated in relation to how effective (benefits i.e. contribution to NNL policy objective), efficient (relationship between costs and benefits) and coherent with existing policy it might be.

Environmental

Spatial planning can further support efforts to achieve NNL outcomes, by ensuring that biodiversity needs and objectives are reflected in decisions relating to a wider range of activities which might affect the use or allocation of environmental resources, not just those for which EIA or SEA are required. Not all Member States carry out explicit spatial planning for biodiversity or other environmental objectives (e.g. identify ecological / Green

64 agreed at the Informal Ministerial Meeting of Ministers responsible for Spatial Planning and Territorial

Development in Gödöllő, Hungary in 2011 http://www.mmr.cz/getmedia/fb9825b3-9d22-490d-bcd0-43528e505ea3/Uzemni-agenda-2020-(EN-verze)

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Infrastructure networks in spatial plans with area having different roles and levels of protection / environmental management in order to achieve objectives). Where this does occur, there are opportunities to ensure that SEAs and EIAs for consented activities are consistent with national and EU biodiversity action plans and targets or with the maintenance or development of coherent networks. This can include identification and safeguarding of areas that are needed to meet local, national or EU biodiversity targets, through either conserving existing biodiversity, or identifying the most suitable space for compensatory measures, such as required under the ELD or biodiversity offsets policies (see associated chapter 6).

An example of the latter is Berlin’s compensation concept (see Box 9-1). Such areas need to be planned spatially to ensure they are able to provide viable habitat for EU protected species. Their location may also be prioritised to use Green Infrastructure to contribute to strategic planning objectives, such as climate resilience. When carried out as part of a rigorous and biodiversity-inclusive spatial planning system, SEA can play a very effective role in heading off adverse impacts on biodiversity and avoiding the need for expensive mitigation.

Box 9-1 Berlin compensation concept

In order to concentrate and manage compensation measures in the context of sustainable urban planning, the Berlin Senate Department for Urban Development has developed a so-called General Urban Mitigation Plan, which complements the Berlin Landscape Program 2004. The development objectives and measures were grouped by types of impact and types of compensatory measures. From the perspective of the city as a whole, areas and measures have priority when they qualify and complement components of the Berlin open space system. Special priority is given to measures which improve the quality of the inner city as is shown below.

Compensation areas of secondary priority are areas of the green and open-space system within the Berlin-Barnim Recreation Area in the northeast of Berlin. In addition to these two compensation ascertainment areas are the Green Axis Cross and the Inner and Outer Park Rings, which are to be developed and completed; this is where the third priority compensation areas are located.

Generally, these areas should be selected for their demonstrable environmental and conservation-related enhancement potential. In cases of structural interventions in the urban open space, and impacts on the environment, compensation measures are now to be developed according to this strategy. The respective “perpetrator” of the impacts, generally a private investor, must bear the costs for these measures in such cases. The measures are checked and documented in the Berlin register of compensation areas of the Senate Department for Urban Development. That ultimately ensures the permanent safeguarding of these environmental and nature-improving measures (Senatsverwaltung für Stadtentwicklung und Umwelt 2004).

Source: Senatsverwaltung für Stadtentwicklung und Umwelt, 2004 Berlin

Spatial planning is expected to be largely able to have indirect impacts on biodiversity through important interactions with a number of policies that have spatial dimensions and that significantly influence biodiversity. For example, it influences the achievement of Water Framework Directive objectives, and plays a crucial role in systems to compensation for damage to biodiversity, both by ensuring development impacts on biodiversity are recognised, and identifying suitable locations for compensation measures such as biodiversity offsets. This is discussed further in chapter 14.


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With respect to the Water Framework Directive, a report for the EEA (2012)65 identified the significance of spatial planning to land use practices and therefore the water environment. This study reviewed academic literature and initial work to develop RBMPs, which showed that the links to these plans and spatial analysis and planning are weak in many countries. One reason is that water management and spatial planning have traditionally been carried out by separate structures and follow different traditions. A practical obstacle is that spatial planning usually follows administrative boundaries, while RBMPs, in principal, follow topographic/geographic boundaries. With regards to the MSFD, this obstacle may be further addressed within discussions on land-sea interactions.

This work for the EEA describes how, from an environmental perspective, planning for administrative areas that do not match natural geographic boundaries can create externalities: costs can fall on those who do not benefit. For example, water pollution from agriculture and industry from one territory may flow downstream to others; and benefits from good practice in these sectors may go to those outside the territory who have not paid for them. This can also be the case for ecosystem services that regulate the quality and quantity of water, such as forests and other habitats, in one territory that regulate floodwaters downstream. This creates conditions in which PES arrangements can be implemented.

Implementing spatial planning along natural boundaries such as river basins provides a way to address these externalities. Another practical issue is that spatial planning and river basin planning follow different timescales in most countries. Ways that potential synergies between spatial planning and RBMPs can be strengthened are described by EEA (2012). Spatial planning has a series of characteristics and approaches that can support the development and implementation of RBMPs. Efforts have been made to build bridges between land use planning and river basin planning. A first element is the growing importance of sustainable approaches to flood risk management, such as the re-opening of flood plains and other actions to give 'room' to rivers. In many cases, such approaches will also expand areas for biodiversity. For coastal zones, this may be further addressed within discussions on land-sea interactions in the framework of the MSFD.

A study in 2008 (Collingwood Environmental Planning et al, 2008) identified how mapping of ecosystem services could help make baseline data in Sustainability Appraisal (SA) and SEA much more relevant to the assessment process by combining datasets in a useful way for planners and decision-making.

Finally it should be noted that there are complex and dynamic interactions between land use planning and biodiversity conservation. For example, Armsworth et al (2005)66 argue that land purchase increases the land demand in areas with higher development activities and as a consequence raises the price. In addition, land acquisition for conservation

65 EEA on spatial planning and water resources: EEA (2012) Territorial cohesion and water management in Europe: the spatial perspective. EEA. Copenhagen. 66

Armsworth, Paul R.; Daily, Gretchen C.; Kareiva, Peter; Sanchirico, James N., 2005. Land market feedbacks can undermine biodiversity conservation. Proceedings of the National Academies of Sciences; 2006 April 4; 103(14).


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purposes could displace development activities to areas of a high biodiversity value that otherwise would have been untouched. They conclude that: 'Conservation purchases alter the supply of and demand for land. Taking this principle as a starting point, the laws of supply and demand make clear the value of a comprehensive strategy that targets species on private lands as well as reserves, and that is informed by accurate inventories of species. Continuing to ignore market forces risks making wasteful use of limited conservation resources, and in some circumstances, may even result in conservation investments doing more harm than good. Conservationists need to consider market feedbacks in determining their conservation performance'. The different actions that could use spatial planning to achieve NNL for biodiversity can have similar feedbacks. Use of spatial planning policies therefore needs to be mindful to these dynamic effects. A first assessment of their significance can be based on the extent of land resources that policies are attempting to influence for biodiversity reasons: the greater the extent of land, the greater the likely influence. This is not just relevant for land as a whole, but also for subsets of land markets, for particular types and/or locations of land, and can be judged through both the spatial area and/or value of land. All stages of the mitigation hierarchy are potentially impacted by the guidance, but being a high level approach it is difficult to directly estimate the expected impact of spatial planning practices on NNL. Nevertheless, the policy has the potential to cover all terrestrial and marine habitats and activities and so impacts on biodiversity and ecosystem services could be wide-ranging, whereas outcomes are more variable for habitats and species that are not covered by the Habitats and Birds Directives. Being guidance, the policy option explicitly promotes greater clarity over achieving NNL through spatial planning, which can support planning authorities while providing planning clarity for business. Producing guidance is feasible in the sense that it is within the capacity of the current authorities. However, the impacts of voluntary guidance will depend on potential users and target sectors seeing its benefits as justifying the costs (real or perceived). Spatial planning is important to biodiversity conservation for a number of reasons. Firstly, it can identify spatial areas which are rich in biodiversity, such as areas of relatively natural habitats (e.g. ancient woodland)s and/or where existing land-use practices support high levels of biodiversity (e.g. high-nature value farming), and protect these from developments/ land use practices that reduce biodiversity interest.

Secondly, spatial planning provides a mechanism for incorporating the benefits of biodiversity and environmental protection into socio-economic development objectives. The MAES process is leading to the development of maps showing key areas of ecosystem services, and Member States are using these to inform their thinking on where to invest in Green Infrastructure (e.g. to use ecosystems to manage flood risk). This in turn helps maintain expand green spaces and areas of semi-natural habitat, to the benefit of biodiversity. For example, good spatial planning on the coast can help adapt to sea level rise caused by climate change. This is described further in Box 9-2.

Thirdly, it provides the process through which specific instruments that can contribute to NNL are organised and/or triggered. Most important amongst these are the use of particular measures to ensure that biodiversity impacts are adequately identified (EIA and SEA), and


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potential measures to ensure compensation for residual adverse impacts remaining after completion of the mitigation hierarchy to its penultimate stage. Spatial planning is important for this compensation both because it governs the process within which the need for compensation is identified, and can assist with delivering that compensation by ensuring adequate space is available within spatial plans.

Spatial planning is also important for NNL of biodiversity because the spatial distribution of biodiversity (species and habitats) matters for its conservation, including through protected area the formation of coherent ecological networks67. As stated in the UK’s Lawton Review (2010) on the management of sites designated for nature conservation, “species confined to small, single, or only a few sites, are unlikely to be adequately protected”. There is a wide evidence base which shows that small areas offer less effective protection for species, because they:

support small populations, which can naturally fluctuate into extinction;

have lower diversity in species due to low habitat diversity;

are vulnerable to edge effects, i.e. the edge of protected areas are often affected by external environment pressures (pollution, noise, human interference); the smaller the protected area, the greater chance these external impacts will penetrate all of the area; and

their small species populations may have a limited gene pool, and ‘allee effects’ – which mean that species do not breed successfully at low densities.

Overall, spatial planning has significant, but largely indirect interactions with mechanisms for achieving NNL. Given the limited powers at a European level in relation to spatial planning, while the potential impacts from good spatial planning practice on biodiversity are significant, it is not a major policy tool for delivering NNL.

Economic

Spatial planning systems can bring both costs and benefits to both the public and private sectors. For the public sector, there are the staff and other resource costs of running spatial planning systems to assess and regulate land use options and development proposals. Applying good practice in spatial planning for biodiversity may increase the resources required (a cost). However, it may also speed up the implementations of best practice in spatial planning systems and lead to more efficient use of existing resources (i.e. a savings). It is also difficult to isolate specific costs that are associated with NNL policies from wider environmental policies, such as enhanced understanding and management of ecosystem services, including using spatial information and climate change adaptation measures. This is illustrated through the coastal adaptation example in Box 9-2, for which spatial planning is only one component of efficient adaptation.

For the private sector, the same balance between costs and benefits exists. Good practice on biodiversity in spatial planning can increase costs to the private sector, such as through

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Described at: http://www.ecnc.org/projects/green-infrastructure/spatial-planning-and-ecological-networks-spen/ accessed 09072015.

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increased information requirements associated with planning applications. However, it can also result in more efficient processes, such as early identification of legal requirements in relation to the environment. Ensuring biodiversity impacts are identified and considered at an early stage in land use development plans can reduce time wasted on inappropriate development proposals, and reduce costly delays to projects.

Box 9-2 Spatial Planning/Integrated coastal management for Coastal Adaptation to Climate Change.

Adaption to sea level rise exacerbated by climate change is a well-known pressure on coastal habitats in the EU, particularly on low-lying coasts of the North Sea. Forward thinking about adaptation helps to maintain areas of intertidal habitat important for biodiversity. In England, work for the Natural Capital Committee in identified that a five-fold increase in managed realignment activity, required to adapt to rising sea levels, would mean realigning 30km of coast per year to 2030 (i.e. approx. 450 km), creating 42,750 ha of saltmarsh (eftec et al, 2015). While realignment is a technically established technique, understanding of its costs and benefits remains limited, and it can have higher up-front costs that maintaining the status-quo (often ‘hold the line’ approaches). However, exemplars such as Medmerry on the south coast of England (eftec et al, 2015) and Wallasea Island (RSPB and RTPI, 2014) illustrate how this up-front investment is cost-effective economic approach.

Furthermore the scenario of increased realignment analysed in England have estimated benefits that exceed costs: the quantified costs of £1.7 billion (€2.3 billion) are exceeded by quantified benefits (£2.4 billion (€3.3 billion)) over 50 years. However, while the costs are fully assessed based on established practice, the benefits are assessed generically, and omit the opportunity to enhance ecosystem service values through local planning. This enhancement can be seen in cases such as Medmerry. Therefore the benefit:cost ratio of 1.4 is therefore considered an underestimate (eftec et al, 2015).

Good managed realignment practice, including both these English examples have been enabled by proactive spatial planning, in which zoning of coastal land considers the needs of existing developments alongside the space needed to adapt flood defences and coastal habitat areas to sea level rise. They thereby illustrate the role of spatial planning in delivering biodiversity objectives, contributing to extending, and therefore in the long term maintaining (Wallasea) and creating (Medmerry) areas of habitats important for the conservation of biodiversity.

Similar challenges are being addressed through spatial planning in other Member States. For example, at Bay des Veys, Normandy, in Northern France, Cotentin-Bessin Marshes National Park surrounds the Bay, part of which is designated as a Natura 2000 site. Sea level rise is placing pressure on the low-lying intertidal and freshwater marshes. This led to updating of the Natura 2000 site management plan to include climate change adaptation objectives (Piper et al, 2006). This required integration of biodiversity objectives with management of agricultural and other land use objectives. It therefore illustrates how the benefits of good practice in spatial planning can potential be led through consideration of biodiversity objectives.

Measurement of these public and private sector costs and benefits is very difficult across the spatial planning system. This is primarily due to a lack of accurate counterfactual, against which to distinguish these impacts from those of other activities and changes in the system. Relevant information from Germany is presented in Box 9-3.


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Box 9-3 Berlin’s Gesamtstädtische Ausgleichskonzeption (GA)

In Germany there is zoning of compensation areas (Gesamtstädtische Ausgleichskonzeption) in the spatial planning system in Berlin

68. Within the German spatial planning system, Berlin is one of the three

“Stadtstaaten” equivalents to federal states. This is important because landscape planning (as the accompanying sectoral planning for nature and landscape to overall spatial planning) in Germany is organized at four levels, ranging from the level of the federal states (Landschaftsprogramm) over regional level (Landschaftsrahmenplan) to local level (Landschaftsplan at municipality and Grünordnungsplan at object level). All of these levels apply for the city-region of Berlin and there are stronger interrelations between them then in other federal states (due to the spatial and functional concentration).

The development of Berlin’s Gesamtstädtische Ausgleichskonzeption (GA) required a certain administrative capacity. Its development was led by two staff members (Senatsverwaltung für Stadtentwicklung und Umwelt, division Stadt- und Freiraumplanung, unit Landschaftsplanung und Naturschutz). The whole process (including the conception as well as coordination and consultation and finally legitimization) lasted almost two years. However, the planning staff did not work full time on this task – it is estimated to have required approximately two months of work for two people in total over the two years. The costs of this administration capacity can be estimated based on a gross monthly wage of these public sector staff of €4,000

69. This gives an estimated

salary staff of €16,000 (€4,000 x 2 staff x 2 months).

However, this wage cost does not reflect the other costs of employing these staff (e.g. office space, IT, support services), which are likely to be of the same order of magnitude as the gross salary costs. The total costs are therefore estimated to be approximately €32,000. On top of the GA resulted in costs for consulting with other government bodies/administrative units (e.g. with the districts of Berlin and other sectoral planning and departments/ tools concerned with open space development). No clear quantification of this is available, but it is estimated to exceed the direct staff time and costs described above, leading to a minimum estimated of €65,000. An upper estimate of these costs is double this: overall the process is estimated to require approximately the equivalent of one full working year for one full-time staff member.

In interpreting this evidence, it needs to be borne in mind that Berlin is a specific case. It may underestimate typical costs because there is generally better than average data availability. In this example there was no need to collect and build the data base, which otherwise would require huge amounts of additional work force. However, such work may be required anyway for other biodiversity/environmental management activities, so is not necessarily an additional cost of spatial planning measures. In Berlin, the necessary data could be collated through detailed consultation with various public bodies.

As a result, a draft GA was developed internally with public authorities, which then went into a formal process (including public participation) leading to final approval. The GA is part of the Landschaftsprogramm of Berlin (i.e. the sectoral planning for nature and landscape at state level) and entered into force in the scope of an amendment to the Landschaftsprogramm in 2004.

After the development and approval of the GA, its management is a continuous task resulting in recurring costs. However, it is unclear whether these costs are additional due to the existence of the GA, or reflect actions that would have occurred anyway (and even may be more efficiently undertaken due to the existence of the GA). The unit Landschaftsplanung und Naturschutz at the Senatsverwaltung that took the lead in the development of the GA names two responsible contact persons for coordinating and directing requests regarding the GA. However, these staff have other tasks as well and so are not working full time on the GA –

68 Based on an interview with Annette Mangold-Zatti (Senatsverwaltung für Stadtentwicklung und Umwelt, Abteilung Stadt- und Freiraumplanung, Referat Landschaftsplanung und Naturschutz) –

69 http://oeffentlicher-dienst.info/c/t/rechner/tv-l/berlin?id=tv-l-berlin-

2014&g=E_13&s=3&zv=VBL&z=100&zulage=&stj=2015&stkl=1&r=0&zkf=&kk=15.5%25

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they are part of a group of 5.5 FTE landscape and nature planning employees within the 25-30 state level planning staff.

Approximately 10 years that have passed since the first conception of the GA, and it is now being updated. A first draft has been developed and it will undergo a formal process of public participation etc. after this summer.

The GA can result in both costs and benefits to other administrative bodies and to developers. Costs include the consultation costs in developing the GA. However, once such tools of landscape planning (Landschaftsprogramm, Landschaftsrahmenplan, Landschaftsplan and the GA as a specific part of the Berlin Landschaftsprogramm) are developed (and maintained by the competent authority) they are considered to provide net benefit to these other parties. Other administrative bodies and developers can build on these documents (e.g. on the data provided in them which a developer otherwise would need to acquire himself). For example, they may enable identification of how a proposed compensation measure is adding to a biotope network, speeding up the design and approval process of development and compensation.

Overall, the costs to the public sector are expected to be low. An estimate of costs for spatial planning best practice can be based on the costs from an impact assessment on the implementation of the marine spatial planning framework directive (European Commission, 2013e). It showed estimated additional up-front administration costs for the public sector of €2 million to €22 million, and recurring costs of €3 million per year to €6 million per year for each Member State, plus a very low level of EU support (no more than €0.5 million annually, and likely of the order of €10,000s) (Lammerant et al, 2013). Costs to the private sector are expected to be negligible based on similar policy options for marine spatial planning in EC, 2013. With regard to distribution, the minor costs that may occur would be spread across all relevant sectors, including housing, energy, infrastructure, etc. The economic benefits from spatial planning, in addition to indirect contributions to NNL, relate to the value of maintained/ enhanced ecosystem services. Within the land use planning sector, this approach to utilise ecosystem services thinking is widely discussed as ‘Green Infrastructure’. In part this is a communications tool, with Green Infrastructure using a language through which spatial planning can incorporate biodiversity and ecosystem services evidence into its decisions. Wider stakeholders may find it easier to become engaged with Green Infrastructure approaches, rather than ‘biodiversity’ or ‘ecosystem services’ evidence.

Green Infrastructure is defined as “addressing the spatial structure of natural and semi-natural areas but also other environmental features which enable citizens to benefit from its multiple services. The underlying principle of Green Infrastructure is that the same area of land can frequently offer multiple benefits if its ecosystems are in a healthy state. Green Infrastructure investments are generally characterized by a high level of return over time, provide job opportunities, and can be a cost-effective alternative or be complementary to


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'grey' infrastructure and intensive land use change.” (European Commission, DG Environment)70.

Significant information about Green Infrastructure (i.e. what it is, how it could be implemented, its value and multiple benefits, financing possibilities) has already been collected by the European Commission and made available through the Green Infrastructure section of the DG Environment website, the Green Infrastructure Working Group on CIRCABC, EEA, BISE and other Commission services. This activity is not directed towards NNL objectives as such, but is designed to have synergies with biodiversity conservation requirements. However, it should be recognised that biodiversity and wider ecosystem services enhancements are not always complementary. It is not possible to isolate the additional costs of good spatial planning practice for biodiversity within the costs of wider trends such as adoption of Green Infrastructure concepts, particularly at a larger (i.e. Member State) scale.

The economic benefits from spatial planning’s potential contribution to NNL can be summarised across the range of ecosystem service categories, such as:

Provisioning services, such as increased fisheries productivity as a result of maintaining areas of fish nursery habitats, such as saltmarsh (see Box 9-3).

Regulating services, such as natural hazard protection and improved quality and quantity of water resources.

Cultural ecosystem services, from biodiversity protection, and recreational and tourism benefits associated with natural habitat management.

Social

The social impacts of good spatial planning practice can include delivery of wider environmental benefits that support social outcomes, such as providing recreational and relaxation opportunities and supporting healthy lifestyles. It can also contribute to natural hazard reduction. Box 9-2 describes how spatial planning good practice can link to more sustainable coastal management, thereby reducing risk of natural hazards to coastal communities.

The specific example of the Berlin City’s GA (Gesamtstädtische Ausgleichskonzeption – see discussion above under ‘economic impacts’) is that it is based not on the biotope value but on an open space conception. This is a particularity of Berlin as a city-region, different for the other federal states in Germany that are less dominated by the needs of a large urban population. The GA has thus greatly contributed to steering the open space network in Berlin (in terms of green spaces that provide recreational benefits to the population and on

70 Extensive information about Green Infrastructure (i.e. what it is, how it could be implemented, its value and multiple benefits, financing possibilities) has already been collected by the European Commission and made available through the Green Infrastructure section of the DG Environment website, the Green Infrastructure working group on CIRCABC, EEA, BISE and other Commission services: (http://ec.europa.eu/environment/nature/ecosystems/index_en.htm accessed 29/10/2015).

http://ec.europa.eu/environment/nature/ecosystems/index_en.htm


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top of this fulfil biotope, climate change adaptation and other functions). It has proven to be very effective to coordinate the compensation measures proposed within the single districts (that are responsible for the urban land use planning), that fit into the overall needs of society at the city level.

Governance

Good practice in spatial planning contributes to good governance of economic and land-use development. The authorities managing these two processes are often operating on the same spatial scales, and especially in local government, can be the same local government authority. Large sizes of land use developments/issues are usually handled by authorities covering a larger spatial scale, with land use planning governance systems.

As noted, the planning process decision triggers compensation and offset requirement’s relevance. For example, in Germany, the Federal Nature Conservation Act (BNatSchG) and the Building Code (BauGB) both trigger consideration of compensation, although the latter does not differentiate between compensation and offsetting actions. The direct spatial context between impact and compensation mandated under conservation law is moreover also partially obviated. The BNatSchG is the special law which governs the examination of whether the Impact Mitigation Regulation is to be applied in urban land-use planning or not, and hence the decision regarding the question of whether an impact is present and how it is to be evaluated under conservation law. Clear governance structures are likely to be necessary to ensure good practice in governance can be applied to spatial planning systems handling of biodiversity.

Recent work for the Nordic Council of Ministers (A Enetjarn, pers com.) noted that the Nordic countries lack well-developed coordination of compensation instruments in spatial planning systems, and the need for a strong implementation mitigation hierarchy within existing them. This suggests a need to strengthen these existing systems.


Spatial planning is already part of economic and environmental governance systems in all Member States. Therefore, implementing best practice does not necessarily involve significant additional costs for Member States. It may require up-front investment in capacity and plans in land use planning systems, but this capacity can contribute to good planning for a variety of social and economic goals.

Who faces costs?

Good practice in spatial planning can also lead to savings in costs for both the public and private sectors where it promotes proactive and efficient implementation of biodiversity protection measures in land use planning, which can avoid delays to permitted developments. Promotion of good practice amongst Member States by the European Commission will involve additional costs. However, as with those for promoting best practice under the ELD measures, these are low (of the order of €100,000’s), and may partly be carried out through existing communication activities.


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Who faces benefits?

Good spatial planning can contribute to a number of economic, environmental and social benefits from a range of ecosystem services. These are often described through the benefits of Green Infrastructure (e.g. to deliver natural hazard protection and public health impacts from access to green space and mitigation of air pollution).


While many of the benefits of good spatial planning practice are indirect, they are potentially very significant. For example, spatial planning has the ability to enhance the direct impacts of several other NNL instruments, such as by providing the structure in which greater use is made of EIA and SEA, supporting implementation of protected area and other Birds and Habitats Directives measures, and providing the trigger for applying biodiversity offsets. This predominantly indirect influence on NNL, combined with competence for planning residing primarily with Member States, means the scale of direct social, environmental and economic impacts from spatial planning measures is unlikely to be significant. However, it may enable and/or support significant increments to the impacts of the measures it can closely support.



Spatial planning will continue to play a key role in natural environment management across Europe, in particular in relation to:

the protection of key areas of habitat;

maintaining connectivity for species and habitats, and

maintaining the provision of ecosystem services.

The overall impacts of the spatial planning measure SP2 are summarised in Tables Table 9-1 and Table 9-2. Spatial planning involves costs to the public sector to assess and regulate land use options and development proposals. Better spatial planning for biodiversity may involve applying best practice and therefore using these resources more efficiently. It may also increase the resources required. This activity can also increase costs to the private sector, such as land use developers. However, implementation of best practice in relation to spatial planning and biodiversity can also reduce private sector costs. Ensuring biodiversity impacts are identified and considered at an early stage in land use development plans can reduce time wasted on inappropriate development proposals, and reduce costly delays to projects.

Therefore, spatial planning is a key influence on the future of biodiversity and ecosystem services, mainly influencing the avoidance stage of the mitigation hierarchy, but also providing a mechanism through which implementation of subsequent stages can be ensured. As a Member State competence, the potential for EU-level guidance to influence outcomes is regarded as limited at present. Furthermore, variation in existing practices makes the baseline uncertain, so the outcomes from this policy option for biodiversity and


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ecosystem services are highly uncertain. If there is political will to protect biodiversity more through the planning system, this can happen anyway, and will only be marginally improved by further guidance. Planning measures for biodiversity would complement existing legal protections (e.g. under the Nature Directives) and so would also make a broader contribution to ecosystem services, access to nature, and intergenerational equity. The costs of producing and implementing planning guidance is low, both directly for authorities, and for businesses, since guidance would improve advanced planning of developments, resulting in cost savings that would mitigate any cost increases due to restrictions on development options. Planning measures are regarded as practical and feasible, given the existence of functioning spatial planning regimes through which they would operate. The cross-cutting nature of planning activities means this measure has high coherence with other policy options. The beneficial outcomes for biodiversity and ecosystems are largely additional, but have some overlaps with EIA and/or SEA measures. If these measures are not adopted, then potential impacts from this measure would increase. Additional benefits of the policy option beyond NNL to economic activity, jobs and health/quality of life are limited, although actions that are taken could have amenity and cultural value. However, the policy option is consistent with the objectives of Europe 2020 and the Resource Efficiency Roadmap. It would implement components of the ESDP and Territorial Agenda for 2020, support SEA and EIA processes and enhance many actions included in the Biodiversity Strategy, most notably relating to Green Infrastructure.


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See text for discussion of SP1 impacts.



SP 2: Promotion of best practice by Member States

Some administration and greater ex-ante planning costs, estimated at € millions in total for the EU.

Up-front costs to businesses of obtaining and understanding guidance.

National and local governments, in particular local planning authorities.

Firms in the land development sector.

For the planning authorities and businesses who face costs, there will also be benefits in terms of early identification of sensitive biodiversity, allowing planning and development processes to be completed more quickly and efficiently.

Benefits from better protection and new provision of Green Infrastructure, securing the substantial benefits it provides.

Better condition of protected areas through management of pressures caused by wider land use development issues (e.g. by maintaining sensitive buffer zones).

Cost savings to national and local governments, in particular local planning authorities, and to firms in the land development sector. Green Infrastructure and protected areas benefits accrue to the wider European population.


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Table 9-2: Overview of potential impacts of options associated with the spatial planning


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual Spatial

Planning

Baseline: study context (BaU) SP1






↗


implemented ↗





Widespread and significant Biodiversity loss ↗






↗↗


168



↘

Financial costs (one-off) ↘

Financial costs (recurrent) ↘

Opportunity costs (uncompensated) ↘




Number / quality of jobs generated No baseline estimated on jobs ↗


Access to nature variable, and affected by overall loss of biodiversity, but range of efforts

to increase access underway across the EU. Insufficiency for certain communities.

↗↗


Loss of biodiversity and significant erosion of ESS widespread across the EU will persist for future

generations - raising equity concerns. ↗↗




Clarity


↗↗

Measurability ↗

Practicability / Feasibility ↗↗

Enforceability ↗↗

Coherence with SD and other policies ↗↗↗↗


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Improved Spatial Planning through the promotion and use of good practice should lead to policy benefits, as shown in Table 9-3, through improvements in:

implementation of current spatial planning objectives, particularly around integration of environmental goals and avoiding project delays;

use of EU funding, through direction to projects with multiple benefits and avoiding funding of activities under other objectives that damage biodiversity objectives (e.g. through links of instruments such as for planning, EIA/SEA, and funding in the CFP and CAP); and

support to subsidiarity by providing tools and examples to help local authorities/planning authorities build on good practice.

It will also build up better regulation by improving coherence and synergies between spatial planning and EIA/SEA, and funding, and with specific biodiversity instruments such as providing appropriate spatial areas for biodiversity offsets and ELD implementation.

Planning measures are regarded as practical and feasible, given the existence of functioning spatial planning regimes through which they would operate. The cross-cutting nature of planning activities means this measure has high coherence with other policy options. The beneficial outcomes for biodiversity and ecosystems are largely additional, but have some overlaps with EIA and/or SEA measures. If these measures are not adopted, then potential impacts from this measure would increase. Table 9-3 Summary of the relationship between the policy measure and the four key policy clusters





4: Subsidiari

ty

A: B&H

directives

B: Wider policies &

tools


making

B: Guidance for

implementation


x X


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10 IMPACTS OF NNL MEASURES: BIODIVERSITY PROOFING



Recognising that many infrastructure and development projects in the EU are dependent on EU funding, including from EAFRD, ERDF and Cohesion Funds, the EU Biodiversity Strategy calls for Biodiversity-Proofing of such funds. ‘Biodiversity proofing is considered to be a structured process of ensuring the effective application of tools to minimise biodiversity-harmful spending or to act as a catalyst for biodiversity-friendly spending (i.e. a process-oriented outcome). It applies to all spending streams under the EU budget, across the whole budgetary cycle and at all levels of governance, and should contribute to a significant improvement in the state of biodiversity according to the 2010 baseline and agreed biodiversity targets71 (IEEP et al, 2012b).

Biodiversity proofing should aim to ensure that, at each stage of the policy and project cycles, decision makers ensure that:

1. Potential adverse impacts on biodiversity are considered, identified, quantified and communicated, and that appropriate actions are taken to avoid and minimise them, and then, where necessary, to compensate for unavoidable residual impacts in order to achieve NNL; and

2. Opportunities for activities to benefit biodiversity are identified and taken forward.

Importantly biodiversity proofing is a process that should be carried out at all stages of the policy cycle, i.e. during the development/reform of policy frameworks, programming (e.g. through national strategies and plans), project implementation, project monitoring and reporting, and policy evaluation. Therefore it also needs to involve all levels of governance. It is also a step-wise process that should follow the mitigation hierarchy.

In order to ensure consistency and a level playing field across EU funds, the European Commission let a study that proposed a Common Framework for Biodiversity Proofing (Medarova-Bergstrom et al, 2014). The Common Framework addresses proofing of all European Structural and Investment Funds (ESIF), which comprise the ERDF, the European Social Fund (ESF) and the Cohesion Fund (i.e. Cohesion Policy funds), EAFRD under Pillar II of the CAP, and the European Maritime and Fisheries Fund (EMFF) under the Common Fisheries Policy. The proofing framework also covers the Connecting Europe Facility (CEF), although it is centrally managed by the European Commission (unlike the ESIF).

The Common Framework, illustrated in Figure 10-1 comprises two interacting cycles: the policy cycle and the implementation cycle.

71

Such as those set in the EU 2020 Biodiversity Strategy (COM(2011) 244 final


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Figure 10-1 The Common Framework for Biodiversity Proofing with key tools that may be used at each intervention stage

Policy

Development

Programming1

Implementation Monitoring and

reporting

Evaluation

Call for proposals

Project development

Project selection

Project execution

Project monitoring and reporting

Impact assessment

Cost benefit analysis

Biodiversity objective setting: links to EU goals (eg for GI)

Coordination structures, partnerships & expert networks

BD objective setting: targets & indicators

Earmarking funds for BD

Design of BD measures

SEA

BD selection criteria

Ex-ante evaluation

Implementation cycle*

Impact assessment

Cost benefit analysis

Biodiversity objective setting: links to EU goals (eg for GI)


BD objective setting: targets & indicators

Earmarking funds for BD

Design of BD measures

SEA


Ex-ante evaluation

BD objective & indicator setting


Integrated territorial development strategies

CBA

EIA / Appropriate assessment

EIA / Appropriate assessment results


BD experts in selection committee

Use of financial instruments, technical assistance

BD impacts and progress with project objectives



Ex-post tracking of BD expenditure

SEA reporting

BD impacts and progress with programme objectives

BD impacts and achievement of objectives in mid-term / on-going evaluations and ex-post evaluation

Policy cycle


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1. For ESI funds, includes the development of Partnership Agreements followed by RDPs for the EARDF, Operational Programmes for the ERDF, ESF and CF, and Fishery Programmes for the EMFF. Only includes Work Programmes for the CEF.

* The full project cycle applies to major investments in particular, and is likely to be significantly simplified for small grants.

The ‘policy cycle’ consists of five main stages, each of which offers entry points for incorporating biodiversity considerations. The policy development stage, which takes place at a strategic level, has been completed for the 2014 to 2020 MFF. The programming stage is where Work Programmes, Partnership Agreements, and fund specific spending programmes are developed.

In response to the strengths, weaknesses and opportunities relating to biodiversity proofing, the NNL Policy Option Study put forward policy option (BP 1): “Ensure all EU funds, especially those related to regional policy, transport and energy fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures.” The measure focussed on development projects related to regional policy, transport and energy because they are most likely to be distinct projects with potentially significant biodiversity impacts that can be most effectively subjected to biodiversity proofing. Furthermore, consideration of EARDF was not included under BP 1 because CAP specific measures were selected to deal with agricultural impacts.

At the time BP 1 took into account the possibility that proofing requirements could potentially be included in the relevant EU funding regulations. However, the regulations have now been agreed as well as Partnership Agreements and Operational Programmes with Member States. Current opportunities for Biodiversity proofing therefore relate to the implementation cycle. Furthermore, there is no longer any opportunity to require Member States to ensure biodiversity proofing of the implementation stage is carried out. Therefore, this study considers the potential impacts of the following revised voluntary biodiversity proofing policy option:

Biodiversity Proofing Policy Option 1 (BP 1): Encourage Member States to ensure that the implementation of all EU funded projects, especially those related to regional policy, transport and energy fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures.

In this option, as part of regional policy the maintenance of biodiversity and promotion of associated ecosystem services (through, for example, the enhancement of Green Infrastructure) would be promoted though the following two parallel steps:

Increasing investment in biodiversity and Green Infrastructure by increasing the share of expenditure allocated under the ERDF and Cohesion Fund. The ESF would also be used to support awareness raising and capacity building of both managing authorities and beneficiaries. For example, opportunities to support Thematic Objective 6 of ‘protecting the environment and promoting resource efficiency’ exist under the ERDF (proposed activity: protecting biodiversity, soil conservation and promoting ecosystem services including Natura 2000 and Green Infrastructure) and under the Cohesion Fund (proposed activity: protecting and restoring biodiversity,


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including through Green Infrastructures). In addition, opportunities for supporting biodiversity also exist outside the thematic objective dedicated to investment in the environment and resource efficiency; the conservation of nature and maintenance of ecosystem services have synergies with a wide range of policy areas (i.e. research, innovation, business development, employment, climate change mitigation and adaptation) that are eligible for support from Cohesion Policy.

Ensuring Cohesion Policy expenditure is effectively biodiversity proofed, in accordance with the Common Framework (Medarova-Bergstrom et al, 2014), more specific guidance for the Cohesion Funds (Kettunen et al, 2014) and CEF (Skinner et al, 2014), and the DG Regio Guide to multi-benefit Cohesion Policy investments in nature and Green Infrastructure (IEEP & Milieu, 2013). Proofing can promote: o Provision of information and support for biodiversity project development: to

help implement biodiversity-smart Operational Programmes will require those managing the programmes to reach out to stakeholders who have the capacity to initiate the most suitable projects. This requires awareness raising and publication of project opportunities, targeting the right applicants, assistance in helping design biodiversity-smart projects and putting in place support mechanisms.

o Fine tuning of project eligibility criteria, appraisal and selection processes: this

includes setting minimum eligibility criteria for projects (linking to EIA and NNL requirements) and selecting the right projects via project appraisal criteria (for example enhancing multi-benefit investments).

o Implementation, monitoring and evaluation: for example through applying suitable indicators, milestones and targets, which can be linked to the Common Provision Regulation’s aims to improve EU funding performance and the 2017 and 2019 performance reviews. Similarly monitoring, reporting and evaluation will be important aspects of the process as this can help managing authorities ensure alignment between purported objectives and effective results.


The EU’s MFF has a policy lever function and currently provides important funding for measures that can significantly affect biodiversity and ecosystems in detrimental or beneficial ways. This policy measure therefore seeks to influence this through interventions at the following policy implementation stages (in accordance with the Common Framework for Biodiversity Proofing):

Initial call for proposals, where biodiversity criteria should be set out to discourage project proposals that may have detrimental impacts and to encourage biodiversity-positive projects.

Project development occurs in response to the call for proposals, and this is likely to involve some form of cost-benefit analysis, which should be used to identify and assess all relevant costs and benefits relating to changes in biodiversity and


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ecosystem services. This is likely to be followed up by and/or supported by an SEA and EIA.

At the project selection stage the biodiversity criteria and scoring systems set out in the call for proposals should be used to evaluate proposed projects. In addition, the adequacy, feasibility and reliability of proposed mitigation measures, and, where necessary, offsets for residual impacts (normally set out in an EIA) should also be taken into account.

Opportunities for biodiversity proofing interventions remain during the project execution stage, for example through technical assistance.

The project monitoring and reporting stage tracks progress against identified objectives (e.g. biodiversity-positive spending, and biodiversity impact indicators), including those identified in the policy cycle programming stage and those identified in the call for project proposals and the project development stage. The result should then be fed back into the calls for proposals, so that future calls and objectives can be adjusted as necessary to better address biodiversity-related opportunities and impacts.

These interventions and associated instruments can be very effective in terms of avoiding and reducing biodiversity impacts and supporting offsetting where needed to ensure NNL of biodiversity (Figure 10-2). Furthermore, biodiversity proofing can help to highlight the need for deeper policy coherence.


175

Figure 10-2 The potential contribution of biodiversity proofing to no net loss in relation to the mitigation hierarchy


Negative biodiversity impacts should be avoided and reduced through SEA, EIA and appropriate assessments where Natura 2000 sites are impacted, but as discussed in the relevant chapters above, there are weaknesses in these procedures (despite the recent revisions to the EIA Directive). Proofing can therefore provide additional support for these instruments through, for example, project selection criteria (e.g. incorporating NNL requirements). Information on the extent to which such procedures are undertaken is not available but they are unlikely to be routinely carried out.

Positive biodiversity impacts are achieved through use of the Cohesion Policy funds, and there is the potential for more, but actual funding for biodiversity tends to be a small percentage of the potential funding stream. This is in part due to the absence of biodiversity in some funding objectives and a low prioritisation when they are included. Furthermore, as with most of the EU funds, ERDF and ESF are divided between Member States through national allocations. No compulsory earmarking of funds to support biodiversity under the ESIF exists. Consequently, the total funding available for beneficial biodiversity targeted projects is largely dependent on national priorities, capabilities and political considerations. Other barriers to the use of regional funds for biodiversity funding include the limited capacity in some Member States to apply for and use funding (e.g. due to human resources and other constraints) and high administrative burdens in some cases.


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Environmental

Potential environmental impacts would include a reduction in detrimental impacts on habitats and species of moderate biodiversity value, as those of higher importance would already be protected through existing nature legislation. Lower value biodiversity would probably receive little protection through these measures as they are voluntary requirements for Member States, and it is therefore likely that they would only implement proofing procedures and constrain EU funded projects, for biodiversity of significant value (e.g. nationally rare and/or declining species).

Impacts on ecosystem services would also be relatively small, because EU funded projects primarily relate to infrastructure and have limited impacts on land use (e.g. forestry and agriculture) and related ecosystem services. However, there may be significant demonstration and multiplication potential. As the Common Framework for Biodiversity Proofing noted, ‘it is also hoped that this guidance will help Member States carry out biodiversity proofing of national sectoral funds (…). As national funds are much larger than EU funds, such wider application of biodiversity proofing will be necessary to achieve national as well as EU biodiversity targets.’

Economic

The costs of these policy measures will depend greatly on their uptake by Member States, and therefore cannot be reliably quantified. However, even if widely implemented direct public costs would be small as the measures primarily relate to administrative procedures (e.g. setting and scoring biodiversity related project selection criteria), assessment of monitoring reports and awareness raising (e.g. through websites and events).

Direct private costs, where relevant, would mainly be related to additional requirements for biodiversity surveys and monitoring and would therefore be a very small proportion of most project costs. However, indirect costs for developers could be substantial if the proofing requirements result in significant delays in project selection and permitting procedures. But with careful design and adequate resourcing authorities should be able to avoid significant administrative burdens and time consuming procedures.

Some opportunity costs (e.g. in terms of constraints on developments) might be expected but these would probably be very low given the restricted scope and voluntary nature of this measure.

As the direct impacts of biodiversity proofing on ecosystem services would be minor, related economic impacts are also expected to be of a similar magnitude. However, some benefits might arise, for example, from increases in nature-based tourism if iconic species or habitats of high aesthetic value are conserved. Biodiversity proofing can also help to highlight the need for deeper policy coherence, and support the achievement of the EU’s broader environmental objectives, such as resource efficiency, as well as socio-economic goals including through the stimulation of green growth. This could also give rise to some wider


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economic benefits, but given that these impacts would result from a further chain of decisions, they cannot be reliably estimated.

Social

Potential social impacts would primarily relate to people who might be impacted by the EU funded projects that would be subject to biodiversity proofing. Thus local communities might benefit from the protection of biodiversity and associated ecosystem services, such as recreational green space. Some employment related impacts might also occur, but these and other social impacts would probably be minimal as a result of the limited scale and magnitude of the expected impacts of this measure.

Governance

As European Commission guidance on biodiversity proofing has recently been produced (Kettunen et al, 2014; Medarova-Bergstrom et al, 2014; Skinner et al, 2014) the required actions for Member States should be both clear and practical. Furthermore, proposed measures are unlikely to require significant increases in institutional capacity (e.g. amongst nature conservation agencies and planning authorities). These factors may encourage and enable Member States to implement some biodiversity proofing measures, but as this is a voluntary measure the practicality of enforcement is not a relevant issue for consideration.


Who faces costs?

The main costs of this measure would be opportunity costs borne by the EU and national project funders and project developers. There would also be some additional administrative costs (e.g. in relation to stakeholder awareness initiatives, project selection procedures and the assessment of monitoring reports) for public authorities such as nature conservation agencies and planning authorities. However, some of these actions would already be necessary in accordance with EIA requirements.

Who faces benefits?

The main benefits would be for society as a whole (from conservation biodiversity) as well as people who may be directly impacted by the EU funded projects. Other beneficiaries might include those that would gain from increases in some ecosystem services, such as nature-based tourism. In addition, as noted above, biodiversity proofing can stimulate consideration of wider policy coherence issues, and may therefore affect people who are not directly impacted by biodiversity and ecosystem service related changes.


It is unlikely that this proofing measure would have significant environmental, economic or social impacts, because it will not be able to influence the funding objectives and allocations (due to the timing of the policy cycle) and because proofing actions of the implementation phase of EU funded projects by Member States would only be on a voluntary basis. It would therefore be unlikely for Member States to unilaterally develop and implement proofing measures in such a way that they would result in significant additional costs (or delays) for project proponents, or wider detrimental economic impacts.


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Spatial planning, SEA, EIA and, where required, appropriate assessments, would have a much greater influence over the impacts of these projects, and therefore the added value of proofing would be limited.



Table 10-1 below provides a summary of the main impacts of the policy measures in terms of costs and benefits, and these are also depicted in Table 10-2, which also summarises their environmental, social and governance impacts.

This measure seeks to implement, in part, an existing Biodiversity Strategy target of introducing biodiversity proofing of EU funds. It is also coherent with, and supports, other linked policy measures that contribute to the NNL objective, most notably SEA and EIA.

The main constraint on the Biodiversity Proofing measure is that the funding regulations have now been agreed until 2020, and therefore biodiversity proofing by Member States and relevant management authorities can only be a voluntary measure. Furthermore, the opportunities for influencing the policy development cycles of the EU funds have now passed until the lead up to the development of post 2020 regulations. Consequently, it is currently not possible to influence overall policy priorities and overall funding allocations. This Biodiversity Proofing measure is therefore primarily limited to awareness raising activities (e.g. of the Common Framework on Biodiversity Proofing, and related proofing tools) relating to the selection of development projects and their implementation and monitoring that complement SEA and EIA requirements. The measure is therefore unlikely to have significant impacts, especially given the current political and policy focus on jobs and growth, and other environmental objectives such as tackling climate change.


179


Option Estimated costs Who will be affected by

increased costs Estimated benefits Who will benefit

BP 1: Encourage Member States to ensure that the implementation of all EU funded projects, especially those related to regional policy, transport and energy fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures.

Very low one-off costs as existing institutional framework can be built on

Low recurrent costs as awareness activities are not expensive

Some unquantifiable opportunity costs, but these would probably be very low

Some additional costs for public authorities

Possible opportunity costs for developers who are most likely to undertake EU funded projects

Small biodiversity and ecosystem service benefits due likely scale of impact

Most likely to benefit nationally threatened or scarce biodiversity (as will not provide added protection to the nature directives) and EU funded projects are unlikely to take significant additional steps avoid impacts on low value biodiversity

Awareness raising and good practice in integrating biodiversity considerations in investment policy decisions

People who may be impacted by EU funded projects

Minor overall benefits for society


180

Table 10-2 Overview of potential impacts of options associated with biodiversity proofing


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual Biodiversity

Proofing


BP1






↗


implemented ↗↗





Widespread and significant Biodiversity loss ↗






↗


181



↘

Financial costs (one-off) ↘

Financial costs (recurrent) ↘

Opportunity costs (uncompensated) ↘




Number / quality of jobs generated No baseline estimated on jobs ↗


Access to nature variable, and affected by overall loss of biodiversity, but range of efforts

to increase access underway across the EU. Insufficiency for certain communities.

↗


Loss of biodiversity and significant erosion of ESS widespread across the EU will persist for future generations - raising equity concerns.

↗




Clarity


↗↗↗

Measurability ↗

Practicability / Feasibility ↗↗↗

Enforceability -

Coherence with SD and other policies ↗↗↗↗


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10.3.2 How does the measure contribute to the four key policy clusters?

As indicated in Table 10-3 below this measure would support the EU’s Better Regulation agenda, by helping to increase the consistency of application (i.e. contributing to a level playing field) and increasing EU added value.






4: Subsidiari

ty

A: B&H

directives

B: Wider policies &

tools


making

B: Guidance for

implementation

BP 1: Encourage Member States to ensure all EU funds, especially those related to regional policy, transport and energy fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures

x X X X X


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11 IMPACTS OF NNL MEASURES: COMMON AGRICULTURAL POLICY


The Common Agricultural Policy (CAP) plays a major role in supporting biodiversity conservation and the maintenance of ecosystem services in the EU. The geographic scope and thematic focus of the policy, alongside the budgetary resources devoted to it, make the CAP one of the key tools available for Member States to achieve a variety of environmental objectives. The CAP comprises a range of measures that contribute to the NNL objective, including the European Fund for Rural Development (EAFRD) agri-environment climate schemes. These are developed under Rural Development Programmes (RDPs) and provide by far the largest source of funding for biodiversity conservation in the EU, both for delivering management within Natura 2000 sites as required under Article 6.1 of the Habitats Directive, and environmental management of farmland (and forests) in the wider countryside. The CAP is a particularly important source of funding for maintaining the semi-natural habitats that form an integral part of High Nature Value (HNV) farmland (Keenleyside et al, 2014).

However, there is strong evidence that one of the most severe pressures on biodiversity, and especially habitats and species that are protected under EU’s nature legislation, is the continued loss of semi-natural habitats outside protected areas (EEA, 2010; EEA, 2015). There is, therefore, a need to improve the effectiveness of the CAP biodiversity measures and to possibly widen their scope. The NNL Policy Options Study report put forward six potential policy options that could enhance their effectiveness (see Table 1-1). However, a major reform of all elements of the CAP was concluded in December 2013, with the new provisions running from 2015 – 2020. Therefore, because the revised CAP has only just come into operation, this study only considers the following two proposals that remain feasible within the bounds of the agreed regulations.

CAP Policy Option 1 (CAP 1): Raise awareness amongst Member States and land managers about the importance of maintaining semi-natural habitats, with a particular focus on HNV farmland.

CAP Policy Option 6 (CAP 6): Encourage Member States to implement the EAFRD agri-environment-climate and forest-environment-climate measures (and other measures) in ways that deliver greater contributions towards NNL.

These are considered feasible to realise by 2020 because they only involve measures to encourage voluntary action in support of biodiversity, within the implementation of the already adopted reformed CAP. Proposals for reforming the CAP in the future have not been covered, given the focus of the study.


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CAP 1: Raise awareness amongst Member States and land managers about the importance of maintaining semi-natural habitats, with a particular focus on HNV farmland.

While much of the effort will need to take place in the Member State, this measure would focus on actions that could be coordinated and supported by the Commission. These would be:

promoting research within the H2020 calls on establishing consistent definitions of HNV farmland and semi-natural grasslands for the EU-28 to underpin future policy development in this area;

facilitating actions to raise awareness of the importance and value of HNV/semi-natural grassland habitats in Member States and to share experiences between Member States, for example (as described below) via the European Network for Rural Development (ENRD) Contact Point or the European Innovation Partnership for Agricultural Productivity and Sustainability’ (EIP-AGRI);

supporting the dissemination of information on these issues via regional or EU-wide events on the topic; and

supporting a publicity campaign to raise the profile of HNV farming, including a possible HNV label (similar to some aspects of Policy Option MBI 2).

New research would be developed that complements existing relevant H2020 projects, such as FP7 ERA-Net BIODIVERSA, now refunded under H2020 as ERA-Net Co-fund. For example, out of the BIODIVERSA call, which was launched jointly with the FACCE-JPI (Agriculture, Food Security and Climate Change), the following relevant projects were funded: BASIL (landscape-scale biodiversity and the balancing of provisioning, regulating and supporting ecosystem services), Eco-serve (sustainable provisioning of multiple ecosystem services in agricultural landscapes) and TALE (towards multifunctional agricultural landscapes in Europe: Assessing and governing synergies between biodiversity and ecosystem services).

To help encourage greater awareness the value of HNV farming to society would be demonstrated (drawing on the results of recent studies as noted above), in particular highlighting the important role that those managing HNV farmland play in providing society with the ecosystem services (i.e. public goods) it requires. Member States would also be encouraged to ensure that advice for this purpose is available via the Farm Advisory Service (FAS), that all Member States are required to implement. Efforts would also be taken to find a way of defining HNV farmland and/or semi-natural grasslands in a consistent way for the EU-28 to allow future policies to be developed that focus on these habitats, allowing for their effective implementation and control and verification.


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This voluntary measure would aim to help Member States:

better target priority areas or issues;

improve delivery against objectives at the wider landscape scale;

explore the possibility of cooperation between land managers;

explore options for making payments more attractive and accessible; and

provide advice and facilitate access to funding for infrastructure as appropriate.

To achieve these aims this measure, supported and coordinated by the Commission, would encourage the following voluntary practical actions by stakeholders in the Member States, linked to ongoing work on biodiversity mapping, restoration and the deployment of Green Infrastructure:

Improved monitoring and analysis of land use/habitat changes and selected biodiversity indicators to establish which habitats are being degraded or lost, and which associated biodiversity components are being impacted as a result.

Mapping of habitat and biodiversity changes, and identification of areas with critical losses, because they hold particularly threatened species, important ecosystem services, or have key landscape-scale ecological functions (e.g. providing connectivity amongst protected areas or other patches of HNV farmland), as a tool to assist management authorities in decision-making on compensating losses through agri-environment climate schemes.

Map areas that would be most suitable for targeting habitat restoration or re-creation to achieve NNL of key biodiversity and ecosystem services losses in priority areas, as identified in 1 and 2 above.

Consulting farmers, relevant authorities and other organisations in the priority areas to identify any key constraints that might limit take up of habitat restoration or re-creation measures within agri-environment climate schemes (e.g. inadequate payments rates, inadequate knowledge of required measures, or concerns over possible agricultural or economic risks).

Establish communication networks and platforms that facilitate RDP scheme designers and managers to identify priorities, and target areas, for biodiversity and ecosystem service restoration or re-creation, and to take into account identified constraints in scheme design and implementation.


Given the ongoing substantial losses of semi-natural farmed habitats and other types of HNV farmland, there appears to be a clear need to improve existing measures and to further target the conservation of HNV farmland. It is therefore expected that these measures would encourage Member States to further develop their mix of policy measures and funding within RDP agri-environment climate schemes so that HNV farming would remain viable and that losses of important habitats and associated biodiversity would be reduced as


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much as possible under CAP 1 (Figure 11-1). Ecosystem restoration and re-creation that would occur under CAP 6 could reverse some previous impacts (e.g. drainage) and indirectly compensate for some of the losses that could not be prevented, thereby contributing towards NNL at an agricultural sectoral level.

The proposed targeting of actions would also increase their effectiveness because resources would be focussed on and tailored to needs. It would be accompanied by sufficient advice (e.g. via the FAS, which all Member States are required to implement) and support that would aim to achieve an adequate uptake of the measures and that the intended outcomes are achieved.

Figure 11-1 The potential contribution of CAP options to no net loss in relation to the mitigation hierarchy


All EAFRD measures must address environment, climate and innovation as cross cutting objectives of the policy. Therefore many of the tools necessary to achieve NNL of biodiversity exist already within the current EAFRD, and these have been expanded in the new EAFRD regulation for 2014. However, it remains up to Member States how they choose


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to design their schemes and the way in which they might combine different EAFRD measures to best effect72.

In accordance with the Birds and Habitats Directives, Member States are obliged to put in place the management measures that are necessary to maintain or restore habitats and species of EU importance to favourable conservation status. Most Member States have therefore used EAFRD funds to compensate for mandatory management restrictions within Natura 2000 sites (using the Natura 2000 measure in the Rural Development Regulation) and/or agri-environment measures to establish voluntary schemes that incentivise land owners to undertake the required management.

However, although coverage cannot be accurately quantified, it is clear that available funds are insufficient to support the land management activities that are required over the Natura 2000 network (Gantioler et al, 2010; Kettunen et al, 2011). Furthermore, the network typically only includes 20% to 60% of most habitat types. Therefore, although some RDP schemes do attempt to conserve these habitats wherever they occur, funding allocations have been well below the levels required to support conservation management outside Natura 2000 sites.

RDPs need to reflect the strategic objectives decided at national level and outlined in the Partnership Agreements, which in turn, build upon the Common Strategic Framework that coordinates the intervention of the Structural and Investment Funds at an EU level. Whilst this report was being written the RDPs for the 2014 -2020 period were adopted. Therefore it will not be possible for the NNL policy measures considered here to influence the allocation of funds. But information from DG AGRI indicates that 44% of RDP funds have been allocated to Priority 4 of the Rural Development Regulation73, which has the following focus areas:

restoring and preserving biodiversity (including in Natura 2000 areas and areas of High Nature Value farming) and the state of European landscapes;

improving water management; and

improving soil management.

Whilst these measures have a wider range of objectives than conserving biodiversity, it does suggest that there is considerable scope for helping the schemes maximise their contribution to the NNL objective.

There is already a substantial amount of effort put into the dissemination of information on RDPs, agri-environment measures and the conservation of biodiversity in farmland. In fact the 2007-2013 Rural Development Regulation introduced the requirement to create the ENRD74 and National Rural Networks (NRNs). The ENRD is a platform for involving and engaging all organisations and people interested in improving rural development in the EU.

72

For example combining advice and training measures with capital investments and on-going multi-annual support payments. 73

http://ec.europa.eu/agriculture/rural-development-2014-2020/country-files/common/rdp-list_en.pdf 74

https://enrd.ec.europa.eu/en

https://enrd.ec.europa.eu/en


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It is funded and overseen by DG AGRI. The ENRD is in essence a networking hub and has four main objectives:

increase involvement of stakeholders in rural development;

improve implementation of rural development programmes (RDPs);

better inform a wider audience of the benefits of rural development policy; and

support the evaluation of RDPs.

It achieves these objectives through working on three key activities: knowledge development, exchange and cooperation and communication.

The work of the ENRD is facilitated by two independent support units working in close collaboration – the ENRD Contact Point and the Evaluation Helpdesk. They are both based in Brussels, but work across the EU. The ENRD Contact Point supports the running and activities of the ENRD. It coordinates its thematic and analytic work, organises ENRD workshops and seminars and communicates the work of the network. The Evaluation Helpdesk provides specialist support to improve methods, tools, knowledge and understanding for evaluating RDPs. Alongside the ENRD sits the EIP-AGRI, which has a specific mandate to foster links between scientific research and farmers and forestry managers. It aims to close the gap between innovation and practice in working towards rural development goals. The EIP-AGRI Service Point, based in Brussels, supports the EIP Operational Groups in Member States and facilitates knowledge sharing and exchange, communicating the latest news and developments specifically to support innovation in agriculture and forestry (ENRD, 201475)

The ENRD Contact Point consists of a team of 20 FTE, comprising 15 permanent Brussels based staff as well as additional thematic and geographical experts. The maximum budget stated in the specifications provided by DG AGRI in 2013 was €3.2 million per year to cover office and staff costs as well as carrying out its core activities.

The ENRD Contact Point offers a range of publications and other media, designed to inform a range of audiences about what is happening in practice in rural areas regarding the implementation of rural development policy. The range of publications76 are used as a vehicle for providing easily digestible summaries of research findings, policy developments, to provide guidance and recommendations on particular topics, and share good examples of approaches taken to deliver different rural development objectives and outcomes in different parts of the EU . These publications are produced on a regular basis throughout the year. The European Commission also recently produced guidance on the management of farmland habitats within Natura 2000 sites (Olmeda et al, 2014), which also to some

75

ENRD (2014), ENRD: CONNECTING RURAL EUROPE 2014-2020, ENRD, Brussels

76 The range of publications include the following: a monthly newsletter, the EU Rural Review; ENRD

Magazine; EAFRD Project Brochures; and Thematic Publications.

https://enrd.ec.europa.eu/en/publications-and-media/eu-rural-review

https://enrd.ec.europa.eu/en/publications-and-media/enrd-magazine

https://enrd.ec.europa.eu/en/publications-and-media/enrd-magazine

https://enrd.ec.europa.eu/en/publications-and-media/eafrd-project-brochures

https://enrd.ec.europa.eu/en/publications-and-media/guides-and-brochures


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extent relates to HNV habitats beyond the Natura 2000 network. However, although it is available via the Commission’s website, it does not seem to have been widely disseminated, so there are opportunities to increase awareness of it amongst management authorities.

The ENRD brings together a variety of rural development actors in formal and informal ways (via workshops, seminars, conferences, thematic groups) to facilitate the exchange of new ideas, knowledge and best practice, and to encourage co-operation. The main actors involved include: NRNs, Member State authorities, National Support Units, LEADER Local Action Groups and European organisations representing farmers, foresters, the environment, rural communities etc. Thematic groups are formed for a time-limited period only (two a year), focussing on the priorities chosen for the ENRD Contact Point that year through collaboration with all members of the ENRD General Assembly (e.g. stakeholders, Managing Authorities etc.) and DG AGRI. For example, the current thematic group focussing on improving the quality of RDP implementation has convened three times in the first half of 2015 and a seminar has been organised on the topic. The membership of the group is voluntary and comprises Managing Authorities, NRNs, farming organisations and NGOs. The results of discussions will be summarised in a report and accompanied by information in the ENRD CP’s publications and activities in some of the NRNs.

The EIP-AGRI Service Point has a maximum annual budget of €2.5 million (according to the 2011 specifications issued by DG AGRI). There are a range of activities carried out by the EIP AGRI to help connect people and facilitate innovation and knowledge-exchange in agriculture. For example, it organises focus groups on very specific agricultural topics (in 2014, one ran on “High Nature Value (HNV) farming profitability". The groups gather and summarise knowledge on the topic, identifying problems and opportunities, the state of play in research, highlighting and developing possible solutions to these problems. The output of the groups is a set of priorities for innovation actions which can be taken up by a range of actors in Member States. The Service Point also organises events, collates and shares research needs identified by practitioners on the ground and seeks to share information on innovation actions and results of research via its online database, publically accessible via their website.

Furthermore, there are intentions to bolster information exchange as Priority 1 of the Rural Development Regulation is ‘Fostering knowledge transfer in agriculture, forestry and rural areas”. This is a cross cutting priority addressing the following areas of intervention (Focus Areas):

fostering innovation and the knowledge base in rural areas;

strengthening research and innovation links in agriculture and forestry; and

fostering lifelong learning and vocational training in agriculture and forestry sectors.


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According to the latest figures from the Commission77, 1.2% of total public expenditure within RDPs has been allocated to the knowledge transfer measure and 1% to the advisory services measure. Based on a total of €161 billion total public expenditure allocated to rural development between 2014-2019, this equates to €3.54 billion being allocated to knowledge transfer and advisory services over a 5-6 year period. According to the targets for the indicator on the number of places provided on training courses, across all 28 Member States the figures suggest €3.6 million training course places will be funded by the end of the programming period. Given that knowledge transfer and advice is a cross-cutting issue, the funding can be allocated to all priorities and there is no consolidated information currently publically available on how much has been allocated to which priority. However, summary information from 13 RDPs approved by the end of March 2015 indicates that allocations to these two measures under Priority 4 are typically about €5-10 million, but Denmark has allocated €21 million and Austria €39 million. So a significant amount is being spent by Member States on knowledge transfer and advice that is likely to relate to some extent to the conservation or restoration of biodiversity and ecosystem services.

Some of the funding will be used to fund the FAS, required under the Horizontal Regulation (required to provide advice on, inter alia, cross-compliance, green direct payments, as well as ‘information related to climate change mitigation and adaptation, biodiversity and protection of water’, as set out in Annex I of Regulation 1306/201378). These measures, can be allocated to fund specific advice relating to environmental issues beyond what is available via the FAS. For example, some countries require farmers to undertake a certain number of hours of training on sustainable land management per year as part of the eligibility criteria for entering an agri-environment-climate scheme.

The monitoring of farmland habitats, biodiversity and ecosystem services is also already carried out to some extent in all Member States. Although it was not set up for the purpose, some of this has contributed to the monitoring of RDPs required under the 2007-2013 Common Monitoring and Evaluation Framework which has been updated and extended to the whole CAP for the 2014-2020 programme. The EBONE79 project also developed a number of products that aimed to facilitate the development of a cost effective and coherent system of biodiversity data collection at regional, national and European levels. This does not seem to have been implemented, but current surveys and monitoring includes standardised EU land use / habitat mapping and monitoring carried out under the CORINE programme using remote sensing data. A number of countries have also undertaken national and regional surveys and mapping of habitats, HNV farmland etc., such as in

77

Presentation by Mihail Dumitriu at the ENRD Contact Point’s Seminar on Improving Rural Development implementation, 11 June 2015 http://enrd.ec.europa.eu/sites/enrd/files/uploaded-files/s2_state-of-play_dumitru.pdf 78

This states that for biodiversity, the FAS may cover ‘Information on the positive correlation between biodiversity and agro-ecosystem resilience, and the spreading of risk, and also the link between monocultures and susceptibility to crop failure/damage from pests and extreme climatic events; and Information on how to best prevent the spread of alien invasive species and why this is important for the effective functioning of the ecosystem and for its resilience to climate change, including information on access to funding for eradication schemes where additional costs are implied’ 79

http://www.wageningenur.nl/en/Expertise-Services/Research-Institutes/alterra/Projects/EBONE-2/About-EBONE.htm

http://enrd.ec.europa.eu/sites/enrd/files/uploaded-files/s2_state-of-play_dumitru.pdf

http://enrd.ec.europa.eu/sites/enrd/files/uploaded-files/s2_state-of-play_dumitru.pdf




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Slovakia where a comprehensive inventory of semi-natural grasslands has been established. This, and other biophysical information, is then being increasingly used to identify, assess, map and monitor ecosystem services, through for example the EU MAES initiative80 and various national actions.

Of particular importance for biodiversity is the surveillance, monitoring and assessment obligations under the Birds and Habitats Directives, which include the assessment of the conservation status of natural and semi-natural habitats and species listed in the Directives. These assessments should consider the condition of the whole habitat resource or species population, and not just Natura 2000 sites, but in practice it is unlikely that areas outside Natura sites are adequately monitored.

Existing species monitoring schemes include those for common farmland birds81 and grassland butterflies,82 which cover all Member States. Some countries have also used such datasets to help identify target areas for specific types of agri-environment schemes. For example, survey data on farmland birds have been used in a Bird Conservation Targeting Project83 to identify areas that contain priority species (or have the potential for them to recolonize) and should therefore be targeted for specific bird focussed agri-environment schemes.

It therefore seems likely that the basis of the required institutions, information systems and data are already available and the CAP measures will consequently be able to largely use and build on these.



Environmental

CAP 1 will, by definition, focus on HNV farmland, which comprises three types:

1. Farmland with a high proportion of semi-natural vegetation. 2. Farmland with a mosaic of low intensity agriculture and natural and structural

elements, such as field margins, hedgerows, stone walls, patches of woodland or scrub, small rivers etc.

3. Farmland supporting rare species or a high proportion of European or World populations.

However, it should be noted that types 2 and 3 are not well defined and mapped in most countries (Keenleyside et al, 2014), and therefore in practice it is likely that the measures would focus on semi-natural grasslands and other semi-natural grazed habitats, such as heathlands, moorlands, Mediterranean scrub, and pastoral woodlands. As discussed above,

80

http://biodiversity.europa.eu/maes 81

http://www.ebcc.info/index.php?ID=558 82

http://www.bc-europe.eu/index.php?id=340 83

https://data.nbn.org.uk/Datasets/GA000811

http://biodiversity.europa.eu/maes

http://www.ebcc.info/index.php?ID=558

http://www.bc-europe.eu/index.php?id=340

https://data.nbn.org.uk/Datasets/GA000811


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many of these habitats are listed in Annex I of the Habitats Directive and should therefore already be the focus of land management actions, but funding allocations are normally insufficient to cover their requirements within the Natura 2000 network, let alone in the wider environment.

Some HNV type 3 habitats that might receive attention would include dry cereal systems, such as those in Spain and Portugal, that are of particularly important for some threatened birds, such as Great Bustard (Otis tarda) and Little Bustard (Tetrax tetrax). The conservation of these habitats would in turn provide other wider biodiversity benefits, such as for invertebrates and some rare arable plants.

The measures would also be expected to lead to changes in ecosystem services, with those associated with semi-natural habitats expected to be maintained through conservation or to increase through restoration / re-creation. The exact service changes would depend on the habitat and ecosystem changes, and would vary according to their context, but the main increases according to CICES84 classes would probably be in:

Provisioning o Surface & ground water for drinking & non-drinking purposes (due to

increased infiltration rates)

Regulation & Maintenance o Bio-remediation by micro-organisms, algae, plants, and animals o Bio-chemical detoxification / decomposition / mineralisation in land / soil o Filtration/ sequestration/ storage/accumulation by ecosystems o Mass stabilisation and control of erosion rates o Flood protection o Pollination and seed dispersal o Weathering processes (i.e. maintenance of bio-geochemical conditions of

soils including fertility, nutrient storage, or soil structure) o Decomposition and fixing processes (e.g. by decomposition / mineralisation

of dead organic matter etc.) o Chemical condition of freshwaters o Global climate regulation by reduction of greenhouse gas concentrations

carbon sequestration and storage etc.)

Cultural o Scientific o Educational o Heritage, cultural o Entertainment o Aesthetic o Symbolic o Sacred and/or religious

84

Common International Classification of Ecosystem Services


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Declines in some services would also be expected in relation to the habitats / ecosystem changes, and would similarly depend on circumstances, but they would probably primarily relate to provisioning services from agricultural production (i.e. mainly food and bioenergy crops).

The CAP measures could therefore contribute to the conservation of some particularly important habitats and species, and related ecosystem services. However, although it is difficult to quantify these impacts it is likely that they would be relatively low, as the RDP budget allocations would remain unchanged. Thus, additional impacts would be constrained and have to largely result from transfers between schemes under RDP Objective 4 and might be at the potential expense of other objectives. An argument for such transfers is that the halting of biodiversity losses by 2020 is an EU target (and relates to targets under the Convention on Biological Diversity), which has been endorsed by the Council and supported through the EU Biodiversity Strategy. However, the EU also has other social and environmental priorities, such as those relating to climate change.

Thus it seems likely that the habitat / ecosystem service changes resulting from CAP 1 would only be a small increase in the conservation and/or restoration of HNV farmland, especially given the existing baseline measures (described above) that have aimed to conserve and raise the profile of HNV farmland already. Thus associated ecosystem service impacts would probably be also be very limited. Nevertheless, given the high biodiversity importance (i.e. EU threat level) of many semi-natural habitats and species of HNV farmland, even small changes in habitats could lead to more significant biodiversity benefits.

CAP 6 could improve the effectiveness of RDP measures through improved monitoring and mapping of biodiversity, and better prioritisation and targeting of actions, and by encouraging landscape-scale actions where this is needed and efficient. Thus, although it is likely that the changes in habitat /ecosystems would be similar to those under CAP 1, the biodiversity benefits could be further enhanced. Overall though, biodiversity impacts would remain moderate due to the overall constraints on RDP Objective 4 funding.

Economic

The direct costs of CAP 1 (i.e. raising awareness of the importance of maintaining semi-natural habitats) would be borne by the Commission and possibly by Member States to the extent that they take these options on board, and would primarily relate to:

publicity campaigns (brochures, webpages, targeted mailings);

awareness raising events for the key stakeholders in each Member State;

workshops for Member State representatives in Brussels and in selected Member States.

The costs of such activities are relatively low, although cumulative costs could be significant if a large number of events in each Member States were envisaged. However, these actions would mainly need to target the same stakeholders covered by the ENRD and the EPI-AGRI service points, namely NRNs, Member State authorities, National Support Units, LEADER Local Action Groups and farmer / landowner organisations. Furthermore, over the course of


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this study the RDP budgets have been agreed with the European Commission and therefore there is no opportunity to increase the funding under the knowledge transfer budget line in response to this measure. Therefore it is anticipated that this measure could use the existing ENRD and EPI-AGRI networks and resources (with some possible internal budget adjustments to reflect changes in priorities and work streams), and there would be no significant additional public cost.

CAP 6 (i.e. encouraging Member States to implement the EAFRD measures to deliver greater contributions towards NNL) would entail more directs costs than CAP 1, as it would involve a wider range of actions, including extending and improving biodiversity monitoring and habitat mapping in most Member States. The costs of these actions are very difficult to assess as the current costs of existing monitoring and mapping programmes are not well documented. Furthermore, although the main biodiversity monitoring schemes (such as for butterflies and birds) are coordinated by professional institutions they are mainly carried out by volunteers. However, an illustrative example of the potential costs of a sample based field survey and habitat mapping comes from the UK 2007 Countryside Survey (see Box 11-1), which cost approximately £12 million (€17.5 million).

Box 11-1. The aims, methods and cost of the UK Countryside Survey85

Aims

The UK Countryside Survey 2007 aimed to provide scientifically reliable evidence about the state or ‘health’ of the UK’s countryside, which can be compared with the surveys carried out in 1998, 1990, 1984 and 1978, so that changes can be identified and their relative rates quantified.

The findings of the Countryside Survey are used to:

improve scientific understanding of the countryside’s landscape, vegetation, freshwater and soils;

assess changes in the area and distribution of broad habitats and some habitat types of special interest (e.g. hedgerows, arable field margins and upland heath);

examine how the countryside’s natural resources respond to changes in land use, climate change and government policy;

contribute to Government’s reporting of biodiversity; and

assess progress against target indicators in Biodiversity Strategies for the UK and the devolved countries.

Methods

The survey comprised two main parts: the Field Survey and the Land Cover Map. The Field Survey involved an in-depth study of a sample of 591 1 km squares in the countryside. It was carried out by 64 field surveyors, who recorded (using portable data recorders using specially-developed software), the following scientific information:

Vegetation data in electronic format (from repeat studies of plots surveyed in 1998/99; from new plots in arable field margins; and from plots in 60 new squares).

Spatial data on Broad and Priority Habitats, as well as linear and point features, for all 591 squares of the Survey.

An aquatic macrophyte survey, a river habitat survey and various samples from the 425 squares surveyed by the Freshwaters Work Package in 1998.

85

http://www.countrysidesurvey.org.uk/home

http://www.countrysidesurvey.org.uk/home


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Mapped locations of ponds in approximately 270 squares.

Pond survey data from one pond in each square.

Soil cores taken from each of the 5 ‘Main Plots’ surveyed by the Soils Work Package since 1978.

Veteran tree survey data for up to 10 trees per square.

The 2007 Land Cover Map was derived from satellite images, digital cartography, ground reference data and ancillary datasets. The most detailed output that can be supplied is a vector product with a minimum mappable unit of 0.5 ha and a minimum feature width of 20m. Each polygon represents a parcel of land and has attributes describing land cover and metadata describing how this information was derived.

Costs

The total cost of the 2007 Countryside Survey was approximately £12 million (€17.5 million), of which the field survey cost approximately £3 million (€4.4 million) (including £0.5 million (€0.73 million) training). The soils programme was about £1 million (€1.5 million). The remaining £8 million covered the software for field recording (which has been used since on other surveys), database development, the Landcover Map, and management (which was about £1 million (€1.5 million).

Extrapolation of the UK 2007 Countryside Survey costs to the EU suggests that the same type of survey would cost about €390 million in 2015 (with adjustment for inflation)86. It is important to note that the full survey would probably only need to be repeated every 5-10 years; perhaps every 6 years to tie in with the reporting cycle of the Birds and Habitats Directives.

Further information on the costs of habitat mapping may come from a current European Commission study that is assessing the availability of information on semi-natural grasslands, but at the time of writing this report it was not available.

The measure would also require consultations with farmers and relevant authorities and the establishment communication networks and platforms that enable RDP scheme designers and managers to easily identify priorities, and target areas, for biodiversity and ecosystem service restoration or re-creation. This would need to be backed up by the provision of advice to farm advisors, and in turn farmers, which can be costly, as for example shown by a study of the costs to the FAS of providing advice on water issues in Sweden and England (2010). In England this advice was provided under the England Catchment Sensitive Farming Delivery Initiative, which specifically targeted diffuse water pollution from agriculture. At the time of the report, £2 million per year (€2.3 million per year) was allocated to contractors to provide advice and £1.2 million per year (€1.4 million per year) paid for 50 FTE adviser posts. The average cost for one advisory visit was £600 (€699) and the costs of a training workshop were estimated to be in the region of £1,500 (€1,747). In Sweden, advice was designed rather differently, with total costs for the advice service to farmers estimated to be in the region of €2.2 million in 2009. However, as for CAP 1, it is anticipated that all consultations and advisory actions would be undertaken by the ENRD and ENI-AGRI service point with their currently agreed budget, and therefore there would be no additional public costs for these actions.

86

Based on 29% inflation since 2007, the UK being 5.5% of the EU’s area, and a conversion rate of €1 = £0.71


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Both CAP measures would be expected to lead to some opportunity costs as greater awareness of the importance of HNV farmland would lead to some restrictions on agricultural improvements and intensification. For example, agricultural authorities may increase the scrutiny and enforcement of cross compliance regulations. They might also widen the application of EIA to grassland conversions, thereby supporting NNL policy measure EIA 3 (see chapter 6.3.2). RDP measures would also be expected to increase support for the maintenance and restoration of semi-natural habitats under low intensity agricultural management, which would be at the expense of measures that support agricultural improvements. However, the private opportunity costs of such measures would be compensated through the publicly funded agri-environment climate measures as their payments take into account income forgone.

If an HNV label was successfully developed and marketed under the CAP 1 option then this could raise income levels. However, as discussed in section 13.2, in relation to a possible NNL label (option MBI 2), the potential economic costs and benefits of certification are complex and would depend on a number of factors that cannot be predicted at this stage.

Some significant economic benefits would be expected from the increases in the ecosystem services listed above. According to a European Commission study (2013c), GDP adjusted ecosystem service values could amount to about €7,900 per ha/year for temperate heath and scrub (ranging between €1,009 and €17,366), and €1,900 for natural on semi-natural grassland (ranging between €77 and €5,875). However, the net economic impacts of both CAP policy measures cannot be quantified because the expected magnitude of land use / habitat changes are uncertain, and their associated ecosystem service values are highly context specific. Furthermore, comparative data are not available on the values of non-provisioning ecosystem services associated with croplands and agriculturally improved grasslands.

Social

Given the modest effects of both measures it is likely that their social impacts would be minor. Although the measures would be expected to reduce to some extent agricultural improvements (e.g. the ploughing of grasslands) and intensification (e.g. increased use of fertilisers), which might impact on farm profits, forgone losses would be compensated for through the agri-environment schemes. Furthermore, increased productivity and profits does not necessarily result in increased employment. Indeed, the agri-environment payments for the maintenance of HNV farmland could equally well help to maintain existing jobs, and thereby contribute to the rural economy.

Both measures could also lead to increased rural jobs associated with nature-based tourism (as a result of increased biodiversity and awareness of HNV values). CAP 6 could also lead to a small increase in jobs associated ecological research, monitoring and mapping, some of which would be in the rural areas. Although such increases in tourism and technical jobs would probably be small, the social impacts in a rural context could be more significant as the diversity of job opportunities are relatively limited.


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Governance

The governance impacts of the CAP policy measures would be minimal as the envisaged activities build on existing regulations (i.e. the Rural Development Regulation) and institutional structures (e.g. ENRD and AGRI-EPI) and processes. Furthermore, although the intended awareness raising and training would help to build the capacity of Member States to implement EU instruments and meet EU targets, such as the NNL target, the measures would not significantly affect the overall amount of knowledge transfer actions undertaken, because the budget for such activities was fixed in 2015.

The impacts of the biodiversity monitoring and habitat mapping required under CAP 6 would also have limited governance impacts, as they would build on existing institutions and initiatives, such as JRC and Member State mapping of HNV farmland. But more substantial increases in capacity would be required to develop the detailed habitat and species maps that are envisaged as being necessary to effectively identify and target biodiversity conservation priorities in order to achieve the NNL objective.


Who faces costs?

The costs of the both CAP options would primarily fall on some EU level institutions (such as the ENRD and EPI-AGRI service point, EEA, JRC) and possibly on Member State authorities and organisations (e.g. NRNs, FASs and nature conservation authorities, agencies) if they decide to undertake such voluntary action. However, these costs could be largely met from public funds. Private opportunity costs in terms of income foregone from restraints on agricultural improvements would be mainly compensated for through agri-environment climate scheme payments, and would therefore also ultimately fall on the taxpayer. But it is important to note that the proposed measures would not increase RDP expenditure overall, or the allocation to Objective 4 and knowledge transfer, as these allocations were fixed in 2015.

The additional costs associated with the organisation of biodiversity monitoring and mapping, and the collation, analysis and dissemination of information under CAP 6 would probably need to be mainly met from national funds. However, most of the cost of field work would probably be borne by volunteers, as they are now.

Who faces benefits?

Although the overall budget for the farming community would be unaffected by the measures, farmers/landowners who wish to conserve HNV farmland and maintain their associated farming systems and practices would benefit. Farmers with HNV systems might also benefit from increases in the price of their products if an HNV certification and label was successfully developed.

Institutions involved in the monitoring and mapping of habitats and biodiversity would also benefit, if the additional funding required to undertake these CAP policy measures were to be found. Substantial increases in capacity, in terms of staff numbers and expertise, would be required to develop the detailed habitat and species maps that are envisaged as being


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necessary to effectively identify and target biodiversity conservation priorities in order to achieve the NNL objective.


The potential for major changes as a result of these measures is severely limited by the fact that the overall RDP budget and their allocations was fixed in 2015. Therefore the impacts will rely on the extent to which these measures result in increased prioritisation and targeting of actions that support the conservation of semi-natural habitats and other forms of HNV, and consequently changes in internal budget lines and workplans in the ENRD, EPI-Agri and Member State institutions. These changes are likely to be limited as a result of the need to meet other valid objectives, competing institutional inertia, existing staff expertise and interests, and the existence of preliminary work plans etc. Major changes would probably need political interventions and there is no indication that this could be expected, especially given the current political focus on jobs and growth, and the high priority given to climate action amongst environmental objectives.

Therefore, although there is little evidence to support this assessment, it is considered likely that the impacts of both measures would be relatively minor. However, if CAP 6 was to be implemented, then it could greatly increase the effectiveness and efficiency of some agri-environment schemes and their impacts could be targeted to habitat and species of particularly high nature conservation importance. Thus its biodiversity impacts could be much more significant, although broader ecosystem service impacts would probably remain rather limited.




The main advantages of these measures are that they build on existing initiatives and institutions and tap into substantial budgets under the RDP for agri-environment climate schemes and knowledge transfer. They primarily aim to improve the effectiveness and efficiency of existing measures and are therefore likely to be supported by a wide range of stakeholders. They are unlikely to have major private or public costs.

However, the measures are only able to promote and encourage the conservation of biodiversity and ecosystem services (e.g. by greater awareness and better monitoring of impacts) and the adoption of NNL targets. Furthermore, most of the knowledge transfer actions (i.e. all of CAP 1 and some of CAP 6) would be constrained by fixed RDP budgets and allocations to specific measures. Therefore these actions would have to compete for increased internal budgets against other important objectives, such as jobs, economic growth and climate action. There is also no clear budget line for increasing spending on biodiversity and habitat monitoring and most actions would need to be funded from national sources.


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It is therefore likely that, even in combination, their environmental, economic, social and governance impacts would be small to moderate.


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CAP 1: Raise awareness amongst Member States and land managers about the importance of maintaining semi-natural habitats, with a particular focus on HNV farmland

Very low one off costs as existing institutional framework can be built on

Low recurrent costs as additional awareness activities are not expensive

No significant change in public land management costs.

Some unquantifiable opportunity costs, but these could be compensated at least in some cases from RDP measures


Possible opportunity costs for farmers, but they will be compensated for through publically funded RDP agri-environment schemes

Small biodiversity benefits due to budget constraint, but may be higher for habitats and species of very high biodiversity value

Small ecosystem service benefits

Increased sale prices for products produced under a certified HNV label

Minor increase in jobs for authorities and ecologists

Minor overall benefits for society from increases in regulatory and cultural services

Farmers with HNV systems that produce products under a certified HNV label IF successfully developed


Relatively small set up costs, (e.g. further monitoring and data collation and sharing)

Relatively low recurrent costs for monitoring (assuming mainly by volunteers) and costs may be offset by scheme efficiency savings

No significant change in public land management costs

Possibly some opportunity costs (see above)


Possible opportunity costs for farmers, but they will be compensated for through publically funded RDP agri-environment schemes

Moderate biodiversity benefits due to budget constraint, but may be higher for habitats and species of very high biodiversity value

Enhanced wider landscape-scale benefits

Ecosystem service benefits, but not quantifiable given uncertainty over the effects of the policy options

Farmers who wish to maintain HNV farming systems

Small increase in jobs for authorities and ecologists

Minor overall benefits for society from increases in regulatory and cultural services


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Table 11-2 Overview of potential impacts of options associated with the CAP


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual CAP


CAP 1 CAP 6 Comb-

ined

Incremental benefit






↗ ↗↗ ↗↗

Enforcing the mitigation hierarchy Principle broadly committed to, but

not fully implemented ↗ ↗ ↗↗






↗ ↗ ↗↗






↗ ↗-

↗↗ ↗-↗↗


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↘ ↘ ↘

Financial costs (one-off) ↘ ↘ ↘

Financial costs (recurrent) ↘ ↘↘ ↘↘


↘ ↘ ↘




Number / quality of jobs generated No baseline estimated on jobs ↗ ↗ ↗


Access to nature variable, and affected by overall loss of biodiversity, but range of efforts to increase access

underway across the EU. Insufficiency for certain communities.

↗ ↗ ↗


Loss of biodiversity and significant erosion of ESS widespread across the EU will persist for future generations -

raising equity concerns.

↗ ↗ ↗




Clarity


↗↗ ↗↗↗ ↗↗↗

Measurability ↗↗↗ ↗↗ ↗↗↗

Practicability / Feasibility ↗↗↗↗ ↗↗ ↗↗↗

Enforceability ↗↗↗ ↗↗↗ ↗↗↗


↗↗↗ ↗↗↗ ↗↗↗


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11.3.2 How do the measures contribute to the 4 policy clusters?

As indicated in Table 11-3 below the two CAP policy options could contribute to the aim of both ensuring EU added value (e.g. by increasing information sharing) and improving governance, such as through improved guidance, that increases the clarity and efficiency of the Rural Development regulation and results in increased capacity amongst key institutions. Through its detailed biodiversity monitoring, mapping and prioritisation CAP 6 also enables Member States to better plan and target its use of RDP resources, thereby utilising its subsidiary opportunities.






4: Subsidiari

ty

A: B&H

directives

B: Wider policies &

tools


making

B: Guidance for

implementation

CAP 1: Raise awareness amongst land managers about the importance of maintaining semi-natural habitats, with a particular focus on HNV farmland

x x x x


x X X X


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12 IMPACTS OF NNL MEASURES: FOREST POLICY


Pressures on forest biodiversity from climate change combined with large-scale wildfires, air pollution and invasive pests and diseases are expected to increase substantially to 2030, whilst demands for woody biomass from forests are expected to increase across the EU (European Commission, 2010c). Whilst it has been calculated that European forests could supply considerably more biomass by 2030 (Mantau et al, 2010; Verkerk et al, 2011b), it is also clear that forest management and harvesting intensification to allow these projected rates of removal would have serious negative impacts on forest biodiversity (Mueller and Bütler, 2010; Verkerk et al, 2011a). According to the most recent reporting on the conservation status of forest habitats under the Habitats Directive (EEA, 2015), around 80% of forest habitat assessments were in unfavourable condition, whereas 28% are unfavourable and declining in status. Around 15% are in favourable status and 5% remain unknown. Whilst some of these forest habitats are affected by the lack of management interventions such as coppicing, most are under pressure from management and use, including interventions in hydrology or the introduction of invasive alien species. If NNL of forest biodiversity and ecosystem services is to be achieved, then rigorous production standards will need to be developed and their use encouraged, albeit only on a voluntary basis. The planned new EU policy on bioenergy sustainability beyond 2020 will also play a key role in this respect, but is not considered in this policy option.

The new EU Forest Strategy (European Commission, 2013d) sets 2020 objectives to ensure that all forests across the EU are managed according to sustainable forest management (SFM) principles. The Commission stated in the Strategy that it will develop, in close cooperation with Member States and stakeholders, ‘objective, ambitious and demonstrable sustainable forest management (SFM) criteria that can be applied in different policy contexts regardless of the end use of biomass…’. One of the three guiding principles of the strategy is ‘Sustainable forest management and the multifunctional role of forests, delivering multiple goods and services in a balanced way and ensuring forest protection’.

This policy option will require a strengthened coordination of forest policy at the EU level. It is therefore relevant to note that the European Parliament has called for the Commission to strengthen the mandate of the Standing Forestry Committee and provide it with better resources ‘to enable the Commission to fully use the expertise from the Member States’87. A recent initiative to develop SFM criteria in the Standing Forestry Committee came up with a proposal for a possible list of indicators for communication purposes. The Report was endorsed by the Standing Forestry Committee in September 2015, however there was resistance to any further debate on the grounds that forest policy is under the competence of Member States. Taking this into account, this policy option assumes that an alternative approach to reach the objectives may be necessary.

To be effective the new EU Forest Strategy will need to be underpinned by a more rigorous, standardised, and accountable forest biodiversity monitoring and evaluation system based

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on a long-term institutional commitment (Winkel et al, 2009). This will require Member States to agree on a consistent methodology and network of long-term observations, complemented by a flexible early-warning system that will allow timely preventative action to new potentially harmful threats to forest biodiversity. The Forest Strategy multi-annual implementation plan – Forest MAP (European Commission, 2015a), published in September 2015 in close cooperation with the Standing Forestry Committee, with inputs from the Forest-based Industries Expert Group and the Civil Dialogue Group on Forestry and Cork, provides a list of actions to implement the Strategy in the period 2014-2020. The Commission Services commit to develop a Forest Information System for Europe (FISE) including information on forests and natural disturbances, forests and the bioeconomy, forests and climate change and forest and ecosystem services. However, of particular relevance to the NNL target, the commitment falls short of explicitly incorporating information on the status of biodiversity.

Further justification for the implementation of policy option FP 1 is its potential to feed into Natural Capital Accounting (NCA), which is an aim of the EU Biodiversity Strategy and 7EAP. In fact NCA could interact with and support many of the other policy options considered in this study (even though they do not directly involve biodiversity and ecosystem service monitoring), and therefore this potential is described further in section 15.3.2 on knowledge gaps and needs.


Forest Policy Option 1 (FP 1): Encourage Member States to cooperate, on a voluntary basis, to develop a rigorous standardised accountable forest biodiversity monitoring and evaluation system.

This option would establish a comprehensive, comparable and reliable monitoring and evaluation system that will enable the progress towards the NNL objective to be monitored and reported on for forest biodiversity across the EU.

Member States will need to agree on a consistent methodology and network of long-term observations that is in accordance with the EU Forest Strategy and coherent with other EU policy affecting forests, notably in relation to carbon monitoring and reporting, invasive pests and diseases, forest fires, and other factors affecting forests. To measure progress towards the NNL forest biodiversity monitoring should, at least, include and develop appropriate metrics for:

forest habitat type and extent;

tree species composition as relevant for the forest habitats;

structural diversity;

deadwood;

intactness of ground flora; and

presence and abundance of species of high conservation importance.

The system would need to be integrated into National Forest Programmes, with agreed criteria and indicators and regular (albeit voluntary) reporting arrangements. Further research and coordination will also be required to provide a basis for developing the


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standards and guidelines under this option. Furthermore, complementing the monitoring and evaluation system under this option with a flexible early-warning system would add further value by allowing timely preventative action to new potential threats to forest biodiversity.

Although an effective EU-wide forest monitoring scheme will require long-term financial support, the Council and European Parliament have stressed that the Forest Strategy must not result in undue administrative burdens on forest managers. The measure must therefore also focus on ways in which common management criteria, monitoring and reporting can create efficiencies for Member States and avoid increased bureaucracy.

The necessary components of an EU wide standardised forest biodiversity monitoring and assessment system would include:

Comprehensive catalogue of European forest habitat types that integrates Habitats Directive Annex I habitat types with a classification that both takes account of Europe’s natural forest diversity and includes forest categories that are the result of human management. The EEA has proposed a classification (EEA, 2006) but it does not have a one-to-one cross-walk with the Annex I habitat types. Forest Europe has begun to collect data on forest indicators by forest type, but it is not yet possible to use this for cross-country comparisons (Forest Europe et al, 2011).

Systematic sampling across the EU, either a point-based grid with a minimum point density and permanent sampling plots or a sampling hierarchy defined by forest habitat types (according to existing land cover data and/or land cover mapping), or a combination of both (Durrant et al, 2011). Attention needs to be paid to size, shape, use and geo-referencing of sample plots (Durrant et al, 2011).

List of structural indicators and key features that characterise each forest habitat type, and an associated list of typical species.

IT application that produces a preliminary forest habitat map based on remote sensing data and then allows a field-based allocation to forest habitat type using a set of easily observable variables. In cases where the application does not produce a clear-cut classification, an expert field visit and assessment can be called in.

Online data entry window and EU database / information management system coordinated with, or integrated into the Forest Information System for Europe.

Lists of forest species of high conservation interest and appropriate sampling / monitoring protocols.

Forest Policy Option 2 (FP 2): Develop targets that contribute to NNL of biodiversity and ecosystems and promote their voluntary integration into relevant SFM strategies, programmes, plans, criteria, indicators, and monitoring and certification schemes.


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This option would require the development of metrics, baseline requirements or thresholds for key indicators, as listed under FP 1 above. The NNL standards for each indicator would need to be regional- and forest-type specific, and would require significant stakeholder consultation in order to achieve consensus on baseline thresholds. However, some indicators will require additional research on what is needed to achieve NNL, for example with respect to minimum deadwood levels in different forest types (Kappes et al, 2009; Lassauce et al, 2011; Mueller & Bütler, 2010).

The NNL target and criteria for forest biodiversity will need to be integrated into forest management plans, strategies, programmes and monitoring and forest certification schemes, such as the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC), and EAFRD-funded and nationally funded forest environment incentive schemes. Considering the current policy framework, such measures can only be on a voluntary basis, and this would require consensus on the key management factors affecting biodiversity, including methods of logging, stump removal, soil protection, fertiliser use, and drainage.


Although both forest measures are voluntary, it is anticipated that the introduction of forest biodiversity and ecosystem service indicators and targets would encourage Member State authorities, forestry sector and forest owners to contribute to the NNL target. In accordance with the mitigation hierarchy, this should primarily be through the avoidance and reduction of detrimental impacts where appropriate, with offsetting only undertaken for residual impacts Figure 12-1.

Figure 12-1 The potential contribution of forest policy options to no net loss in relation to the mitigation hierarchy


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The introduction of the monitoring, indicators and targets would be through the following steps.

Forest biodiversity monitoring and evaluation system

The European Commission (DG ENV and AGRI) defines a standardised EU-wide monitoring and evaluation system for forest biodiversity, with inputs from relevant expert groups and committees (Habitats and Ornis committees, Standing Forestry Committee etc.) and other stakeholders.

The Commission sets up a working group which could include members of the Habitats and Ornis committees, the Standing Forestry Committee and representatives from other committees and expert and stakeholder consultations across the EU.

The Member State National Forest Programmes and forest and forest fire services set up / adapt / expand their monitoring programmes on a voluntary basis to meet the EU.

The data reporting and management system is integrated into the FISE for which the Commission provides resources to the JRC.

The EEA uses the data to produce a composite report on forest biodiversity in the EU in 2020 and in 2030.

Sustainable Forest Management criteria for NNL

The Commission (DG ENV) proposes a NNL forest biodiversity target in a draft road map for defining sustainable forest management criteria.

The Commission convenes a working group to develop NNL criteria and thresholds/benchmarks for each of the SFM forest biodiversity indicators. This will need to build, among others, on the revised Forest Europe (Ministerial Conference for the Protection of Forests in Europe - MCPFE) indicators for forest biodiversity.

The development process will need to involve key stakeholder groups e.g. the Standing Forestry Committee, Advisory Group on Forestry and Cork and the Advisory Committee on Forestry and Forest-based Industries, as well as the Habitats Committee and the Ornis Committee.

Member States agree on the target and the indicators and thresholds/benchmarks.

Implementation at the national level in public forest policies, forest strategies, national forest programmes etc.

Integration of the NNL target and criteria into forest management plans, forest certification schemes, forest-environment schemes funded under Rural Development Programmes, nationally funded forest environment subsidies etc.

It must be recognised that there is a high risk of this voluntary process failing to deliver, as political support for increased EU-level action, e.g. under the EU Forest Strategy, is currently lacking. In particular, FP 2 is a major challenge requiring considerable political will. More rigorous attempts to integrate and implement EU-imposed restrictions and additional requirements on forest managers and owners could increase already existing resistance to the SFM ideal (Winkel et al, 2015). For example, CEPF has stated that data reporting should be based on existing national level monitoring systems and data and there should be a reduction in red tape.


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Forest monitoring and evaluation system

Most of the EU Member States have established National Forest Programmes88 and have adopted the Forest Europe SFM criteria at least partially (Forest Europe et al, 2011). These National Forest Programmes currently take a wide range of approaches to SFM, and there is currently no EU-wide system of regular monitoring and reporting, so it is difficult to draw conclusions on their current effectiveness at preventing biodiversity loss. Although Forest Europe has adopted a set of SFM indicators and produces regular reports, the data are seldom used either in national biodiversity datasets or in other sector reporting, due to the lack of harmonisation and standardisation and the gaps in coverage (EFI, 2013).

The most recent Forest Europe indicators of forest biodiversity89 are:

Diversity of tree species: Area of forest and other wooded land, classified by number of tree species occurring.

Regeneration: Total forest area by stand origin and area of annual forest regeneration and expansion.

Naturalness: Area of forest and other wooded land by class of naturalness.

Introduced tree species: Area of forest and other wooded land dominated by introduced tree species.

Deadwood: Volume of standing deadwood and of lying deadwood on forest and other wooded land.

Genetic resources: Area managed for conservation and utilisation of forest tree genetic resources (in situ and ex situ genetic conservation) and area managed for seed production.

Forest fragmentation: Area of continuous forest and of patches of forest separated by non-forest lands.

Threatened forest species: Number of threatened forest species, classified according to IUCN Red List categories in relation to total number of forest species.

Protected forests: Area of forest and other wooded land protected to conserve biodiversity, landscapes and specific natural elements, according to MCPFE categories.

Common forest bird species: Occurrence of common breeding bird species related to forest ecosystems.

While for some of the Forest Europe indicators, for example regeneration (Chirici et al, 2012), or forest naturalness (EEA, 2014; Winter, 2012) there are still ongoing debates, for others there is already substantial academic agreement as to what is needed to achieve harmonisation, for example deadwood levels (Rondeux et al, 2012) and tree-related compositional and structural indicators (Corona et al, 2011). The current Forest Europe SFM criteria are worded in a general way in order to accommodate different national

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Some Member States in South and Southeast Europe and Belgium, German, Sweden, the UK have reported they have ‘similar processes’ (Forest Europe et al, 2011) 89

http://www.foresteurope.org/sites/default/files/ELM_7MC_2_2015_2_Updated_Indicators.pdf


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approaches, and there are no defined acceptable standards of performance (targets), and no verifiers (baselines, thresholds) against which to measure the indicators90, however as the Report of the Ad-hoc WG SFM C&I showed, majority of MS are following trends 91. Forest ground vegetation composition is not currently used as an indicator by Forest Europe, although it is a key indicator for the conservation status of forest habitat types under the Habitats Directive (European Commission, 2013e). There are few other EU-wide methodological standards defining forest monitoring and implementation instruments (Winkel et al, 2009), although one indicator for forest health - tree damage due to air pollution (Fischer et al, 2012) - is already monitored at the EU level.

The Habitats Directive requires Member States to monitor 81 woody and forest habitat types and around 170 non-bird species linked to forest ecosystems and report on their conservation status under Article 17 (European Commission, 2015b). Similarly, Member States monitor and report on 82 bird species linked to forest ecosystems under Article 12 of the Birds Directive (EEA, 2010).

The JRC is currently developing the FISE with modules on biodiversity and forest health and vitality, carbon balance, climate impacts and adaptation, as well as on biomass and bio-economy related variables92. The prototype will be published by the European Forest Data Centre by 201693.

The expected baseline without additional action is that Forest Europe will publish its State of Europe’s Forests in 2019/2020 and 2023/4 based on its updated SFM indicators for forest biodiversity, and the EEA and Commission will publish the next Article 17/Article 12 data on Annex I forest habitats and European protected species in 2021 without any link between the two. It will therefore not be possible to draw conclusions on the extent to which forest biodiversity has been conserved or lost up to 2020 other than for the European protected habitats and species covered by the Birds and Habitats Directives. And for these only broad changes in condition will be readily assessable, rather than assessments of more detailed NNL indicators.

The Diabolo Horizon 2020 project launched in April 2015 aims to achieve improvements in the methods of data collection, such as national forest inventories and monitoring systems, in order to produce more accurate, harmonised and timely information that can be fed into EU forest information systems; generate consistent, up-to-date forest information to support the development of EU policies and international processes; and develop methodologies to make innovative use of data collected using terrestrial, aerial and space based platforms. The project has a total budget of €4,998.970 for four years of work to February 2019.

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http://www.fao.org/docrep/005/ac649e/ac649e0b.htm 91

http://www.fao.org/docrep/005/ac649e/ac649e0b.htm 92

Summary Report of the 129th

Meeting of the Standing Forestry Committee 28 June 2013 at http://ec.europa.eu/agriculture/committees/forestry/129.pdf 93

http://forest.jrc.ec.europa.eu/efdac/


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Sustainable Forest Management criteria for no net loss

The Commission (DG AGRI) presented Member States with a draft road map for developing EU SFM criteria, and an ad hoc working group on SFM criteria developed an initial report. However, further work is needed to create a working proposal for EU wide sustainable forest management criteria. In parallel, the Forest Europe SFM criteria have been updated (EFI, 2013), but without the successful negotiation of a Legally Binding Agreement on Forests in Europe there may be little political will to drive the process at the Forest Europe level94.

Member States are divided over the degree to which they see a need for stronger forest policy at the EU level. The need for greater policy coherence and funding is widely recognised in European fora and reports, but there is also resistance from most - and certainly of the leading - Member States against EU forest policy initiatives (Winkel et al, 2009). This partly reflects differences in Member States’ weighting of the economic role of the forestry sector versus environmental and social benefits of forests. However, there is also concern that a continuation of the voluntary bottom-up approach will not be strong enough to deal with the expected conflicts of interest and trade-offs between different forest functions in the future (Winkel et al, 2009).

Beyond the EU forest policy, there is a range of other policies, strategies and initiatives that are looking to improve the sustainability and resource efficient use of woody biomass, including:

The circular economy package might include some reference to woody biomass, but this depends on what specific proposals are included in the package with reference to existing directives such as the Waste Framework Directive. The roadmap on resource efficiency and the bio-economy communication aims at improving sustainable use and management of natural resources, including wood.

Renewable energy policy developments; for example the Climate 2030 package makes reference to an improved biomass policy that could include limited options to promote improved forest management.

The revised carbon accounting requirements on Land Use, Land-Use Change and Forestry (LULUCF)95 may provide some incentive for Member States to maintain and enhance sustainable forest management in terms of forest carbon sequestration and carbon storage, but they do not provide any additional contribution to a NNL forest biodiversity target.

Certified forests (e.g. under FSC or PEFC) are rapidly becoming more widespread; however the current certification systems do not address forest biodiversity

94

See for example the Joint letter by Confederation of European Forest Owners (CEPF) and other organisations representing forest managers in Europe dated 31 October 2014: ‘European forest sector calls for continued and strengthened efforts for a future Legally Binding Agreement (LBA) on Forests in Europe.’ 95

Decision No 529/2013/EU of the European Parliament and of the Council of 21 May 2013 on accounting rules on greenhouse gas emissions and removals resulting from activities relating to land use, land-use change and forestry and on information concerning actions relating to those activities.


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conservation directly (Clark and Kozar, 2011; Elbakidzel et al, 2011; Johansson et al, 2013; van Kuijk et al, 2009).

Possible improved financing for sustainable management of small forests through the new Rural Development Programmes of the CAP.

The expected baseline is that there will be no target for NNL of forest biodiversity and no integration of SFM in the EU (Winkel and Sotirov, 2014; Winkel and Sotirov, 2015). Taking into account the increasing pressures on forest biodiversity and the current unfavourable to threatened status of many habitats and species groups other than birds, it is expected that there will be a continuation of the declining trends to 2020. The forest habitat types defined by the Habitats Directive have declined in conservation status from 2006 to 2012, with 80% of assessments unfavourable in 2012 (EEA, 2015). 14% of saproxylic beetle species in the EU are threatened, and another 14% Near Threatened, whilst 28% could not be evaluated for lack of data and may well prove to be threatened if monitoring data becomes available (Nieto and Alexander, 2010). Of the non-bird species protected by the Habitats Directive, 44% have an unfavourable-inadequate conservation status, and 16% an unfavourable-bad status, with 17% assessed as declining in conservation status, whereas only 3% of birds associated with forest habitats are threatened (Birdlife International, 2015) and 64% of population assessments are secure (EEA, 2015).

It is important to bear in mind, however, that private forest owners’ motivations vary greatly, and it is unlikely that there will be a strong enough response to economic incentives to intensify the production of biomass to fulfil the projected EU demand (Blennow et al, 2014).



Environmental

Both forestry measures have the potential to provide widespread biodiversity benefits for all types of forest. These benefits would probably be the greatest for semi-natural forest habitats that are outside the Natura 2000 network, because forests within the network should be subject to protection and appropriate management in accordance with the Birds and Habitats Directives. However, the measures would be consistent with the Directives and help to support their implementation. Furthermore, large areas of forest types that are listed in Annex 1 of the Habitats Directive or contain threatened species listed in the Birds and Habitats Directives occur outside the Natura 2000 network. The measures could therefore encourage forest management practices that would improve the ecological condition of such habitats, with respect to the attributes listed above. This would be particularly beneficial for specialist forest species and those that require old native trees, high structural diversity and large amounts of deadwood, such as some forest invertebrates and birds (e.g. woodpeckers).

Benefits for more commercial forests (e.g. plantations) could potentially also be significant, but as this is a voluntary measure it might be expected that the measures would not be


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frequently or strongly applied in such areas as the opportunity costs would be too great (see below).

The measures would also be expected to lead to changes in ecosystem services, with the greatest increases relating to those associated with semi-natural forests and that would benefit most from increases in biodiversity and habitat condition. The exact service changes would depend on the habitat and ecosystem changes, and would vary according to their context, but the increases according to the Common International Classification of Ecosystem Services (CICES) classes would probably be in:

Regulation & Maintenance o Bio-remediation by micro-organisms, algae, plants, and animals o Bio-chemical detoxification / decomposition / mineralisation in land / soil o Filtration/ sequestration/ storage/accumulation by ecosystems o Mass stabilisation and control of erosion rates o Flood protection o Weathering processes (i.e. maintenance of bio-geochemical conditions of

soils including fertility, nutrient storage, or soil structure) o Decomposition and fixing processes (e.g. by decomposition / mineralisation

of dead organic matter etc.) o Chemical condition of freshwaters o Global climate regulation by reduction of greenhouse gas concentrations

carbon sequestration and storage etc.)

Cultural o Scientific o Educational o Heritage, cultural o Entertainment o Aesthetic o Symbolic o Sacred and/or

However, it is likely that some ecosystem services would decline. These would depend on circumstances, but they would probably primarily relate to provisioning services from timber production and possibly carbon sequestration rate (but not carbon storage). Some recreational activities might also need to be limited (e.g. to protect sensitive species or prevent soil damage and erosion).

The magnitude of environmental impacts that would be expected from these measures is very difficult to quantify because both are of a voluntary nature. However, it would seem unlikely for FP 1 to have substantial impacts, as the only direct results of the measure would be the detailed monitoring of biodiversity and ecosystem services. This is therefore primarily a preparatory measure to support FP 2. Nevertheless, it is hoped that the monitoring and reporting would make biodiversity impacts more apparent, thereby encouraging Member States, the forestry sector and forest owners to take some steps to conserve biodiversity and offset residual impacts.


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Although FP 2 is also a voluntary measure, the development of NNL targets and actions to encourage their inclusion into relevant forest policies and plans, could raise public expectations sufficiently to encourage widespread adoption. This combined with transparent monitoring and reporting of appropriate biodiversity indicators and metrics might therefore lead to significant positive biodiversity impacts, and increases in associated ecosystem services. But given the uncertainty of uptake it is not possible to reliably quantify these potential impacts.

It is important to note that significant restrictions on the intensification of forest management in the EU could result in increasing demand for forest biomass for bioenergy being met by increasing wood imports from outside the EU, which may mean transferring biodiversity losses to other parts of the world (Cuypers et al, 2013), or it could result in the displacement of significant areas of other land uses such as agriculture with short-rotation coppice (UNECE and FAO, 2011).

Economic

The most significant and immediate direct costs of these measures will result from the monitoring requirements of FP 1. These will entail significant initial start-up costs (e.g. to develop and trial the system and establish guidance and training etc.) and significant recurrent labour costs as teams of field surveyors will be required, including:

an adequate number of trained personnel to carry out preliminary data analyses and field visits;

a pool of experts for targeted field based expert assessments; and

resources and expertise for monitoring systems for particular species of conservation concern.

Fieldworker numbers and survey costs will vary considerably depending on the approach taken, labour costs, the sampling intensity, the number of indicators to be assessed and the desired levels of precision that are to be obtained. For example, integrated forest inventories that sample for all dimensions of SFM are generally more cost-effective than single-issue forest inventories (Kovac et al, 2014). However, these have only been implemented in Austria, Sweden, Slovenia, and the German state of Bavaria so far.

By way of example, the Bavarian approach to forest monitoring is outlined in Box 12-1. This entailed 7,800 sample points and covered 100,000 trees and 160 parameters, and cost €2 million96. Forest inventory approaches differ amongst federal states of Germany. But over Germany as a whole the 2011-12 forest inventory covered around 420,000 trees and had about 60,000 sample points97, and cost approximately €21.8 million (€5.3 million from the national budget, €16.5 million from federal state budgets98). As the proportion of forest

96

http://www.all-in.de/nachrichten/lokales/Bundeswaldinventur-Mit-Laptop-und-Messgeraeten-im-Wald;art26090,1192616 97

http://www.bmel.de/SharedDocs/Downloads/Broschueren/Bundeswaldinventur3.pdf?__blob=publicationFile 98

http://www.holzlogistik.iff.fraunhofer.de/media/pdf/2010/2.pdf


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cover in Germany is close to the EU average, and Germany comprises 8% of the EU’s land, this suggests that an EU wide forest inventory with comparable methods and standards would cost in the region of €270 million.

Box 12-1. Forest biodiversity monitoring in Bavaria

The German federal state of Bavaria has set up a systematic forest monitoring system which combines its general forest monitoring programme with its Annex I forest habitat monitoring under the Habitats Directive. Bavaria contains 19 Annex I forest habitat types in three distinct biogeographic regions. The forest inventory is statistically sufficient to sample the most common habitat type in all three regions, the second most common habitat type in two regions, and six other habitat types in the largest continental region. For the habitat types with 10,000-20,000 ha, the forest inventory sampling provides a mostly adequate sampling size, whilst for the habitat types with less than 10,000 ha distribution the sampling is done separately using a targeted approach. Forest areas are identified using maps and remote sensing data and the tree species atlas is used to allocate areas to a likely forest habitat type. In the field, data are entered into an algorithm-based application that determines the probable habitat type and the degree of certainty associated with the classification. It also compares the entered data with the thresholds for tree species composition taking into account forest age. In cases of uncertainty the sampling is followed up with an expert field visit to diagnose the habitat type.

Source: Neubert et al, 2012

As the intention of the monitoring under FP 1 and targets setting under FP 2 is to encourage more biodiversity friendly forest practices it is likely that there would be opportunity costs for private and public forest owners as a result of reduced timber production. For example, in Germany the planned reduction of wood removal from Natura 2000 beech woods calculated average margin losses at €40 euros per ha/year with reductions in wood profits ranging from €0 to €139 per ha/year (Wippel et al, 2013). However, in many situations such cost impacts may be avoidable or reducible to lower levels through strategic planning (e.g. avoidance of the most sensitive areas) and good practice sustainable forestry techniques (e.g. small-scale felling and retention of minimum levels of standing trees and dead wood). The adoption of environmentally friendly practices may be compensated for, at least partially and in some cases, through RDP Natura 2000 payments (within Natura 2000 sites) or wider agri-environment climate payments, or through market preference for certified environmentally friendly timber (e.g. under the FSC scheme) (Birdlife International et al, 2013).

Declines in revenues from timber production, might be compensated for, at least in part, through increases in other ecosystem services if payments for the services can be captured (Wüstemann et al, 2014). For example, increasing the biodiversity value of some forests could increase nature-based tourism or hunting, with benefits for forest owners through car parking payments, hunting permits and guided walks etc. (Hein, 2011; Pabian and Jaroszewicz, 2009). Such alternative incomes from tourism however may not necessarily benefit the forest owner who has incurred the costs and lost income, depending on the type of activities and the operator. There would also be wider economic benefits for guest houses, hotels, restaurants and shops, and their suppliers (BIO Intelligence Service, 2011). However, given the uncertainty over possible ecosystem service impacts, it is not possible to reliably predict the potential economic benefits from these measures.


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Social

The social impacts of both forest policy measures are difficult to predict due to uncertainties over their take-up and resulting environmental and economic impacts. Potential changes could reduce employment in the forestry sector where this is focused on timber production. However, such impacts are likely to be minor under FP 1. Furthermore, as noted above, these and potentially more significant declines in timber production under FP 2, might be compensated for through increases in other ecosystem services if payments for the services can be captured. This could help stimulate and diversify rural jobs, with wider socio- economic benefits.

In some situations, the enhanced protection of biodiversity and ecosystem services (e.g. soil condition) may require restrictions on some recreational activities (e.g. dog walking, off-road driving, mountain biking, horse riding and hunting) as a result of their potential to disturb sensitive species or damage habitats. However, such restrictions can normally be dealt with through stakeholder consultations and appropriate management zoning, through which sensitive areas are protected and sufficient areas provided for recreation. Recreation related social impacts would therefore normally be expected to be minimal in most situations.

Governance

The proposed measures aim to build on and support existing policies and instruments for sustainable forest management and forest biodiversity, most notably the Birds and Habitats Directives and the EU Biodiversity Strategy (including Target 3). Both measures are therefore considered to be clear and feasible with respect to existing governance structures. However, the monitoring required under FP 1 and the assessment of NNL under FP 2 would require careful coordination and significant funding would be required for policy measure FP 1, so overall feasibility would decline compared to the current SFM baseline. It should further be noted that Member States have competence in forest policy which limits the potential for EU action.

FP 1 aims to increase the measurability of the impacts of forestry practices on biodiversity and related ecosystem services, and in turn the impacts of mitigation and compensation measures for them. Thus, by itself it contributes to improving the governance of the EU’s general biodiversity policies, as well as the NNL objective in particular. Accordingly it underpins policy measure FP 2, such that progress towards the NNL objective is measurable. However, as both forest policy measures are voluntary their enforceability is low, and the achievement of NNL will depend on stakeholder and political support.


Who faces costs?

The direct costs of FP 1 would probably be largely borne by public authorities in most Member States. However, in some cases monitoring could be combined with commercial forest inventories, and biodiversity surveys that are carried out for accreditation purposes (e.g. FSC) or for corporate social responsibility purposes. It is possible that if the voluntary process fails, there will be a need for more investment at the EU level.


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Opportunity costs, through reductions in timber production and profitability, would affect private and public forest owners and forestry workers, as well as associated businesses and suppliers (e.g. sawmills and forestry equipment manufacturers). However, as noted above such opportunity costs would probably be very limited, and some may be compensated for through payments for some enhanced ecosystem services, as described below.

Who faces benefits?

There would be wide benefits for society, from increases in a range of ecosystem services, such as those relating to regulating services (e.g. climate regulation) and numerous cultural services. More specific benefits would result from increases in nature-based tourism and hunting that would benefit a range of rural businesses such as those providing accommodation, food, transport and specialist guiding services etc.

Forest ecologists and biodiversity monitoring specialists would also benefit from employment opportunities, which would result from the detailed and extensive surveys proposed under policy measure FP 1 and the need to undertake conservation and restoration measures to achieve NNL under FP 2.


Given the voluntary nature of both forest measures it is difficult to predict their impacts, but it is likely that FP 1 would have minor environmental impacts by itself. Economic and social impacts would accordingly also probably be of a minor nature. The environmental impacts of FP 2 would largely depend on the voluntary uptake of NNL targets, which is highly uncertain. However, given the current debate surrounding the EU Forest Strategy and current policy priorities that are focused on economic growth and jobs, and climate issues within the environmental domain, there is little to suggest that the adoption of NNL targets would be widespread and the targets achieved. Therefore changes in forestry practice and increases in compensation measures for residual impacts would probably be no more than modest, resulting in similar biodiversity benefits, opportunity costs and economic benefits from increases in some biodiversity related ecosystem services.




The main beneficial impact of FP 1, is the expectation that a standardised and rigorous EU wide monitoring and assessment of forest biodiversity would enable the quantitative assessment of progress in implementing biodiversity friendly strategies (Barbati et al, 2014), and thus hopefully provide the impetus needed for further action to conserve forest biodiversity. It would also inform national and local initiatives to protect and restore forest biodiversity. In turn, the development and monitoring of NNL forest biodiversity targets and agreed indicators and metrics under FP 2 would contribute to recognising the efforts of Member States with high levels of forest biodiversity, such as Romania and Spain, and may enable the allocation of increased resources for SFM in these countries and regions. It would


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also contribute significantly to the achievement of the EU Biodiversity Strategy 2020 objectives for forests. The two policy options are therefore to a large degree dependent on each other and also mutually supportive, so would probably need to be implemented together.

However, it must be recognised that there is a high risk of a voluntary process failing to deliver, as political support for increased EU-level action, in particular under the EU Forest Strategy, is currently lacking. In particular, the second option is a major challenge requiring considerable political will. It is therefore unlikely that the combined measures would lead to anything more than modest environmental, economic, social and governance impacts.


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Option Estimated costs Who will be affected by

increased costs Estimated benefits Who will benefit

FP 1: Encourage Member States to cooperate, on a voluntary basis, to develop a rigorous standardised accountable forest biodiversity monitoring and evaluation system.

Moderate costs of surveys, but these would only be required every 5-10 years.

Some opportunity costs, but these are likely to be minor under this measure, and some would be compensated for from public funds (e.g. RDP funded agri-environment climate measures)

Survey costs probably mainly funded by public authorities

Opportunity costs would affect forest owners, foresters and associated businesses and suppliers

Small biodiversity benefits as the measure only establishes monitoring and it is voluntary

Small regulatory and cultural ecosystem service benefits (e.g. increases in nature-based tourism and hunting)

Nature authorities and ecologists

Overall benefits for society and some increases for rural businesses providing accommodation, food, transport and specialist guiding services etc.

FP 2: Develop targets that contribute to NNL of biodiversity and ecosystems and promote their integration into SFM strategies, programmes, plans, criteria, indicators, and monitoring and certification schemes

Some opportunity costs, but these are likely to be no more than modest under this measure, and some would be compensated for (as above)

Opportunity costs would affect forest owners, foresters and associated businesses and suppliers

Uncertain, but probably no more than modest biodiversity benefits and associated ecosystem service benefits (see above)

Nature authorities and ecologists

Overall benefits for society and some increases for rural businesses (as above)


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Table 12-2 Overview of potential impacts of options associated with forest policy


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual Forest Policy Options


FP1 FP2 Comb-

ined

Incremental benefit


Estimated magnitude of change, ↗↗↗↗↗ = Completely meet the objective, ↗↗↗↗ = close to completely meeting the objective, ↗↗↗ = Moderate but substantial contribution, ↗↗= Small

contribution, ↗ = Minor contribution (key/criteria to be defined issue by issue in the context of the assessment).


Significant biodiversity and ecosystem service loss ongoing -

i.e. Net Loss ↗ ↗-↗↗ ↗-↗↗

Enforcing the mitigation hierarchy

Principle broadly committed to, but not fully implemented

↗↗ ↗↗↗ ↗↗↗


Estimated magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change

(key/criteria to be defined issue by issue in the context of the assessment)



↗ ↗-↗↗ ↗-↗↗

Economic and financial: Costs and benefits: Administrative costs (at EU and MS level); Financial costs (one-off); Financial costs (recurrent); Opportunity costs (uncompensated); Economic

Benefits from ecosystem services (costs are presented with downward arrows (to reflect increasing burden), benefits up)




↗ ? ?


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↘ ↘↘ ↘↘

Financial costs (one-off) ↘↘ ↘↘ ↘↘

Financial costs (recurrent) ↘↘↘ ↘↘↘ ↘↘↘


↘ ↘↘ ↘↘





No baseline estimated on jobs ↗ ↗ ↗


Access to nature variable, and affected by overall loss of

biodiversity, but range of efforts to increase access underway

across the EU. Insufficiency for certain communities.

↘ ↘


Loss of biodiversity and significant erosion of ESS

widespread across the EU will persist for future generations -

raising equity concerns.

↗ ↗-↗↗ ↗-↗↗


Governance (Magnitude key as Environmental above) Upwards arrows indicate a beneficial change with respect to current conditions. Downward arrows indicate a detrimental change. Est. magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ =


Clarity


↗↗ ↗↗ ↗↗

Measurability ↗↗↗ ↗↗↗ ↗↗↗


Enforceability - - -


↗↗↗ ↗↗↗↗ ↗↗↗↗


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12.3.2 How do the measures contribute to the four policy clusters?

As indicated in Table 12-3 below the measures would primarily contribute to policy aims related to improved governance, through the development of detailed biodiversity monitoring and measurable targets for achieving the EU’s NNL policy objective. The improved forest and biodiversity information would also help Member States implement and target their measures, thereby supporting the subsidiarity principle.






4: Subsidiar

ity

A: B&H directives

B: Wider policies &

tools

A: Evidence

based policy

making

B: Guidance

for implemen

tation

FP 1: Encourage Member States to cooperate, on a voluntary basis, to develop a rigorous standardised accountable forest biodiversity monitoring and evaluation system

x x X x

FP 2: Develop targets that contribute to NNL of biodiversity and ecosystems and promote their integration into SFM strategies, programmes, plans, criteria, indicators, and monitoring and certification schemes.

x X x X


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13 IMPACTS OF NNL MEASURES: MARKET BASED INSTRUMENTS



The loss of biodiversity and ecosystem services is understood to be partly driven by the fact that market prices do not fully take into account pollution and the impacts on nature and society (i.e. negative externalities), resource scarcity, public goods provision (e.g. management practices that give rise to ecosystem services) (TEEB 2010;2011). This effectively creates incentives driving the loss of biodiversity and ecosystem services. In order for economic signals in the market place to operate effectively, there needs to be effective information so that informed choices can be made by producers, consumers and by regulators and government bodies.

Market-based Instruments (MBIs) address perverse incentives that exist within markets either by incorporating (part of) the external cost of production or consumption activities through taxes or charges (price-based instruments), or by creating property rights and facilitating the establishment of a market for them (quantity based instruments), that acts as a proxy for the use of environmental services (OECD, 2007). In addition, there are market efficiency instruments which support the market by helping to address inefficiencies in the market such as occur via information asymmetries and lack of awareness.

Figure 13-2 illustrates this MBI classification and the actors involved, Table 13-1 summarises how different MBI’s fit within this classification.

Table 13-1 Classification of Market Based Instruments for biodiversity

Price based instruments

Negative instruments - penalise environmentally damaging activities

Environmental taxes/charges/fines

Habitat banking

Positive instruments - encourage environmentally beneficial activities

Bio-Carbon Markets

Payments for Ecosystem Services (PES)

Environmental tax credits

Financial security

Quantity based instrument Resource extraction quotas

Trading rights

Biodiversity offsets and Environmental Liability Directive

Market efficiency instruments Product Certification and Labelling Schemes

Other market facilitation

The policy options assessed in this chapter are those considered in the Policy Options Study Report (Tucker et al, 2014):

Market Based Instruments Policy Option 1 (MBI 1): EU guidance on the potential role of Market Based Instruments to deliver NNL.


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Market Based Instruments Policy Option 2 (MBI 2): Development of an EU ‘No Net Loss’ label.

These policy options are ‘market-based instruments’ (MBIs) insofar as they support the market (OECD, 2010; Withana et al 2014) for example by helping to address market inefficiencies such as via information asymmetries and lack of awareness. MBI 1: EU guidance on the potential role of Market Based Instruments to deliver No Net Loss

Guidance for regulators and government bodies on the potential role of MBIs would include:

the role that different MBIs could play in achieving NNL objectives (see consideration of specific MBI’s below for more information);

how the design of different MBIs might affect their contribution to NNL;

how existing institutional and regulatory structures domestically/regionally/internationally can affect:

o the impact of MBIs in achieving NNL; o other economic, social and environmental outcomes as a result of

MBI implementation;

what general principles are helpful for instrument choice (e.g. when to use level or price based instruments, how to set instrument review clauses etc.); and

practical and detailed step-by-step account of how MBIs can be developed and implemented (i.e. selection of tax base, assessment of distributional impacts, monitoring and regulating etc.).

Such guidance would provide a basis for decisions makers in Member States to establish whether developing the institutional structures that are required for these MBIs is worthwhile. The guidance would therefore act to encourage and facilitate the uptake of MBI(s) by Member State as a means to achieving NNL.

Several policy instruments considered in other chapters are effectively MBIs, and these are discussed further below (see ‘Links to between other policy options and MBIs’). The MBIs included in this assessment are those not covered in other chapters and deemed to have greatest potential to contribute to a NNL objective, namely:

Environmental taxes - placing an additional cost (tax, charge, fee or levy) on activities that damage biodiversity;

Environmental tax credits – operators are able to reduce their tax liability by funding local environmental enhancement projects;

Payments for ecosystem services (PES) – arrangements where the beneficiaries of ecosystem services pay ecosystem managers for the delivery of those services; and

Bio-Carbon Markets – enhancing the participation of conservation schemes (e.g. for forests/ peatlands) within carbon markets / offsets programmes


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where credits for carbon sequestered are bought by organisations / individuals to offset their impacts on the natural environment.

MBI 2: Development of an EU ‘No Net Loss’ label

A new EU-wide standard on NNL could be established, with the necessary accompanying underlying scientific and technical methodologies. Companies, agricultural and forestry producers or products achieving NNL could be certified against a verified standard, and be able to display a label reflecting their contribution towards achieving ‘no-net loss’ (or ‘net positive gain’) on their products. This would help to incentivise voluntary offsets and corporate NNL initiatives by helping to reward them through the marketplace. Such labels could be developed in a cross-sectoral manner (e.g. in the manner of EU Eco-labelling) or in a sector-specific ways (e.g. for products from high-nature value farming, in the manner of Marine Stewardship Council labelling for fisheries).

Links between other policy options and MBIs

Whilst the focus here is on these two policy options (MBI 1 and MBI 2) several of the policy instruments analysed in other chapters can be regarded as market-based instruments or having a market-based element. Other MBI’s for which guidance would be beneficial, which are covered elsewhere in this impact assessment are:

ELD (chapter 6) and offsets (chapter 14) - both of these instruments require a certain quantity of compensation for damage to biodiversity in different contexts. This increases the relative costs of more damaging activities. They thus send a market incentive (price signal) that deters damage to biodiversity.

Habitat banking - a means of delivering offsets through buying and selling of ‘biodiversity credits’.

Financial security - instruments including insurance, bank guarantees, funds and bonds to comply with the requirements of Directives (e.g. ELD).

Product Certification and Labelling Schemes – reward companies that implement voluntary no-net loss initiatives through appropriate standards and certification.

In addition, Resource extraction quotas are an MBI which sets a cap on the amount of the resource extracted. This is a tool that has been well developed in the case of fisheries within the EU where Total Allowable Catches (TACs) are set in terms of tonnes or numbers of fish based on scientific advice on the stock status from advisory bodies such as ICES and STECF (EC, 2015c).

This chapter does not seek to repeat analyses in other chapters. Table 13-2 summarises how each of the potential NNL instruments considered in the NNL Policy Options Study either directly (price-based instrument and quantity based instrument) or indirectly (improve information - market-efficiency instruments) promote the adjustment of markets to avoid environmental damage or compensate


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for the quantity/cost of environmental damage. Price-based instruments include agri-environment schemes and other monetary based incentive mechanisms where the government acts on behalf of society (as the ultimate beneficiaries) to recover the costs linked to the delivery of ecosystem services. Annex 2 has a more detailed version of Table 13-2.

Table 13-2 Links between instruments and MBI’s considered in the NNL Policy Options Study (Tucker et al, 2014)

Instrument

Link to MBI

Explanation of link to MBI Price Based

Quantity Based

Market efficiency

Birds and Habitats Directives

X X

Improve information to both polluters and benefactors for better operation of MBIs. Expand incentive payments to target habitat connectivity

Environmental Liability Directive

X X X

Improve information on ELD to both polluters and benefactors for better operation of MBIs. Expanding remit of ELD (e.g. compensation or financial security requirements).

Environmental Impact Assessment

X X Improve information to make use of existing NNL instruments, such as stronger links from measured impacts to requirements.

Strategic Environmental Assessment

X X Improve information on land suitable for offsets and role of areas in safeguarding biodiversity

Spatial Planning Policy

X Improve information on target areas for offsetting or agri-environment schemes

Common Agricultural Policy

X X

Lead to changes in MS funding through RDP and EAFRD as well as conditions to Pillar 1 and 2 funding through GAEC. Also mapping of bio-diversity within farmland to improve efficiency.

Forest policy X Improve information on condition of forests which may facilitate the application of MBI’s (e.g. offsets)

Biodiversity Proofing Policy Option

X X

Increasing the share of expenditure allocated to biodiversity under the European Regional Development Fund (ERDF) and Cohesion Fund. Use the European Social Fund (ESF) to support awareness raising and capacity building of both managing authorities and beneficiaries

Offsetting X X

Encourage the wider use of offsetting through defining an EU-wide framework according to defined standards and principles. Make offsets a requirement for all EU funded projects that have a significant impact on scarce biodiversity and ecosystem services

Market Based Instruments

X X X

Encourage the wider use of market-based instruments by MS and improve consumer information to enable producers to place premiums on NNL products


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Table 13-2 shows that all of the instruments considered by Tucker et al (2014) do, in one way or another, link to MBIs, specifically:

All of the instrument have specific policy options that lead to better information (if the options are acted on by Member States: i.e. guidance on MBI’s is only effective if Member States take notice) and therefor can support improved operation of existing or potential MBIs;

40% of the instruments have policy options that relate to compensation in the form of quantity based MBI’s, such as biodiversity offsets;

40% of the instruments proposed involve price-based incentives and these are in relation to changes in government-based funding of biodiversity or financial security to compensate for losses (e.g. bonds/insurance for ELD).

This impact assessment acknowledges and cross-references the direct and/or indirect impacts of these policy instruments on MBIs in accordance with Table 13-2. For example, development of a quantity based MBI for NNL is considered under its own section in this impact assessment, see biodiversity offsetting. Similarly, the CAP is a price-based MBI (subsidies), as is the financial securities that are required to comply with the ELD which is considered under their own section. One of the potential contributions of policy option MBI 1 is to improve the coordination of all the policy instruments shown in Table 13-2, and this must be done in a way that is mindful of the wide range of market-related mechanisms present in all the policy options.


By consolidating the existing evidence on the potential contribution of MBIs to NNL, guidance on MBIs can bring to light the opportunities that exist through their use and in doing so can have short-term and long-term impacts through:

Short term:

Inform Member States on the potential role of taxes in achieving NNL and outline how their design might affect this;

Promote additional research at the EU or Member State level into the costs and benefits of these MBI’s in a specific context;

Promote the development of the institutional structures required for MBIs to operate within and across Member States;

Promote consistency in approach across the EU e.g. common and/or mutually compatible metrics to use across NNL instruments;

Longer term

The incentivising of NNL through additional market costs (tax) and benefits (labelling/banking) within and across Member States;

Funding of NNL through taxation and tax credits (to Member States’s), and product premiums (to organisations);

Ensure that loss of natural capital is compensated for by investment in natural capital of equivalent or greater value (NCC, 2014); and

Cost savings to EU Member States in achieving NNL.


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In order to help inform the potential impacts of guidance on MBIs, an assessment is made in Annex 2 on (i) where progress on MBIs is possible, (ii) where there is good practice (cases to learn from), and (iii) what are good principles of using MBIs to achieve NNL for the MBI’s identified in Table 13-2.

The MBIs considered in this assessment all have the potential to contribute to a NNL target. However, the market is only responsible for some of the loss of biodiversity. In other words, the MBIs only apply to specific aspects of biodiversity loss, and are unlikely to be able to deal with all of the drivers of biodiversity loss in a comprehensive way. Also, MBIs will mostly provide signals encouraging progress but only reach part of their total potential to ‘fix’ market failures (i.e. to internalise the entire cost of an externality). As a result, residual negative impacts on biodiversity are likely to still occur. Nevertheless MBIs could be applied in pursuit of the NNL objective, and are usually an important component of an efficient package of policy measures.

MBI 1: EU guidance on the potential role of Market Based Instruments to deliver No Net Loss MBIs can have a strong influence at several stages of the mitigations hierarchy. As shown in Figure 13-1:

By changing financial incentives to human activities using natural resources, they can contribute to avoidance of impacts, such as by making less damaging forms of agriculture relatively more profitable through the redistribution of subsidies.

Product labelling, as described in MBI 2, can minimise the impacts of production processes potentially causing loss of biodiversity. By labelling products avoiding such damage, they enable market incentives to minimise impacts.

Instruments can also contribute to restoration, such as through PES (e.g. payments to restore water catchments) and bio-carbon markets, particularly where these provide credits with specifically identified ‘co-benefits’ for biodiversity.

Recent interest in the use of MBIs to address biodiversity loss includes subsidy reform (Oosterhuis and ten Brink 2014), levying taxes on pollution and products, charges on services, quotas for limited resources such as fish stocks, payment for ecosystem services such as for water and carbon, green public procurement, offset and habitat banking and fiscal transfers (TEEB, 2011). The extent to which these MBIs address the failure of markets and limitations of market players will determine to what extent they can contribute to progress towards the objective of NNL and indeed net positive gain.


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Figure 13-1 The potential contribution of market based instruments to no net loss in relation to the mitigation hierarchy

Figure 13-2 Typology for market based instruments (Rademaekers et al., 2011)


231

The potential contribution of EU guidance on MBIs to NNL is through an impact chain with several changes, so is rather indirect, but their effects can be wide-ranging and significant. An example is providing guidance on a plastic bag levy:

1. the EU guidance is produced following research; 2. then Member States take action as a result of the guidance, designing a

levy to suit their socio-economic and environmental circumstances; 3. this leads to a reduction in plastic bag use; and 4. this leads to a reduction in marine litter and eventually reduced pressure

on biodiversity.


In the context of NNL, companies and producers (including HNV farming and foresters) that voluntarily implement actions to ensure that their operations have NNL impact on biodiversity (including appropriate use of offsets) in line with an appropriate standard could be rewarded through the certification and labelling of their product as having ‘NNL’. Achievement of this standard would be independently audited and verified. By identifying products that achieve NNL, firms may benefit from capturing increased market share (increased sales) or achieve price premiums (increased revenues). Such a standard could potentially apply to a wide range of products and services, from food and timber to mineral-based products and financial services.


MBI 1: EU guidance on the potential role of Market Based Instruments to deliver No Net Loss

Environmental taxes

Green taxes have been part of Member States’ policy portfolios for nearly two decades (European Commission, 2009). Member States have implemented them for carbon dioxide emissions, air pollution, pesticides, waste, water, fisheries, and various other areas. EU wide taxes, however, have not yet successfully been implemented on a large scale and no Member State has yet attempted to introduce a mechanism that directly taxes impacts on biodiversity. Statistics from Eurostat (2014a) on environmental taxes are:

Total revenue from environmental taxes in the EU-28 in 2012 was €311,683m or 2.4% of GDP and 6.1% of the total revenues derived from all taxes and social contributions.

Pollution and resource taxes represented a relatively small share (4%) of total environmental tax revenues in the EU-28 in 2012 (energy taxes accounted for 75%). This pattern was repeated across most of the EU Member States, although Croatia (20%) and the Netherlands (14%) reported that much larger shares, as did Iceland (16%).

At most 1% of environmental tax revenues were raised from pollution and resource taxes in Sweden, the Czech Republic, Italy, Austria, Luxembourg and


232

Portugal, while Greece and Cyprus did not raise any revenue from this type of tax.

Across the globe, there is little experience to date with a tax levied on a tax base chosen primarily because it has direct negative impacts on a habitat or biodiversity (eftec, 2010). Such taxes remain, on the whole, in the scope of natural resource extraction (e.g. logging) or use of hazardous products (e.g. pesticides). For example, taxes on agro-chemicals to protect water resources may also benefit biodiversity (GHK, 2012; eftec, 2010). The Council of Europe published an in-depth review of the potential for using tax incentives to conserve biodiversity (Shine 2005), but it is limited in scope to the use of the current tax system, illustrating the limited discussion to date.

Environmental tax credits

Tax incentives for conservation currently in place in the EU are generally aimed at increasing conservation activity on private land and do so by providing tax breaks (in effect an environmentally friendly subsidy). Tax refund and reduction schemes have been part of green tax reforms in Member States such as Denmark, Germany, the Netherlands, Sweden, Finland and the United Kingdom (eftec, 2010).

Payments for ecosystem services (PES)

Agri-environment schemes under the Common Agricultural Policy (CAP) are the most prominent example of PES in the EU at present, and involve payments by Member States to farmers for the delivery of environmental public benefits. Schemes with payments originating from the private sector also exist with examples from France and the UK with buyers including water companies, water bottling companies, other corporate buyers, developers, recreational visitors and local tourism businesses (Defra, 2014). However, financial, WTO/State Aid rules have in the past limited the extent to which payments from public sources can incentivise positive management measures to be adopted (DETR, 2001). This can mean that payments from the state are not made in relation to the value of ecosystem service provision thereby potentially limiting the incentive to conserve biodiversity. Bio-Carbon Markets

Whilst bio-carbon markets are focused on financing projects to deliver carbon mitigation, there are additional co-benefits including to biodiversity. If decisions on which projects to finance are made on consideration of co-benefits (including biodiversity) in addition to carbon savings, then bio-carbon markets have the potential to contribute towards the delivery of NNL. Voluntary markets exist for the trading of carbon that is sequestered by the natural environment. In the UK there are developing carbon markets for woodland (Woodland Carbon Code) and peatland (The Peatland Code) and Italy’s Carbomark as well as bio-carbon projects certified worldwide under The Gold Standard Foundation.


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MBI 2: Development of an EU ‘No Net Loss’ label There has been persistent growth in the certification and eco-labelling of biodiversity-friendly products in recent years. They are increasingly becoming embedded in policy and environmental management structures. For instance the UK saw expenditure on sustainable fish increase from £70 million to £178 million (€86 million to €219.3 million) between 2007 and 2009 (154%) despite growth in overall household expenditure of just 1% (eftec, 2012). The new Common Fisheries Policy will actively promote certification schemes for the sustainably harvested fish including the Marine Stewardship Council, the world's leading certification and eco-labelling program for sustainable seafood.

Other key areas of product labelling in the EU (and with wider global coverage) that have relevant links to biodiversity impacts include the EU Ecolabel, Forest Stewardship Council for timber, Fairtrade labelling, organic food production, coffee, Ecodesign and Energy Labelling, EU tyre labelling and green climate bonds. Although large parts of these product markets relate to production outside the EU, they are also relevant to production across large areas of the European landscape, including areas of high biodiversity value.



MBI 1: EU guidance on the potential role of Market Based Instruments to deliver No Net Loss

As described, the causal chain linking EU guidance on MBIs to impacts on NNL is indirect and uncertain, but potentially wide-ranging and powerful. At each step the transmission mechanism is imperfect and other factors come into play (i.e. the principle of subsidiarity and the extent of additionality - would the policy have been taken forward anyway). It is therefore challenging to estimate the impact that guidance on MBIs will have on NNL.

Environmental

The impacts of increased and/or more effective use of MBIs as a result of guidance will vary according to the instruments used and the baseline context in different Member States. Benefits will be realised in the market economy by firms undertaking less damaging practices (both in the sectors subject to the tax, and in other sectors to which consumer activity may switch).

Wider benefits will result from prevention of damage to individuals’ access to nature, and to realising the health and other quality of life and other ecosystem benefits associated with this. This is likely to be a small and diffuse impact locally and within a limited period of time, but potentially a significant impact when considering a large geographical scale and the fact that these benefits continue over time and apply to future as well as current generations.


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Economic and Social

Given the difficulty of identifying the impact of MBI guidance on achieving NNL, the cost of developing such guidance can be used to inform decision makers as to whether the policy option is worthwhile. It is estimated that depending on the level of guidance (i.e. Member State or EU wide) and its scope (i.e. covering all MBI’s or each one separately), its cost could be between €0 and €500,000 annually (Lammerant et al, 2013). In order for these costs on developing MBI guidance to be justified, the marginal benefit of the guidance must therefore be in excess of €500,000 annually in order for the guidance to deliver a net benefit (i.e. benefit > cost). Depending on the level of guidance the cost of developing it would either be borne by the European Commission and/or individual Member States. However, in general, such instruments implement the polluter pays principle and there the costs will be borne by those causing damage to the environment.

The employment impacts from this policy measure are not expected to be significant. There may be jobs created in less environmentally damaging sectors, and jobs lost in activities that are subject to the MBI. In general these employment changes can be regarded as a transfer of employment between sectors. There is a risk that this transfer occurs across EU boundaries, leading to a net loss of employment in the EU.

There is also a risk that some of the lost jobs will be concentrated in sectors that pose higher-risks to the environment and biodiversity. This may result in concentration of the job losses in geographical locations and/or socio-economic groups, which may result in greater social impacts compared to employment impacts. However, the scale of employment impacts mean that such effects are not likely to be significant at national or European economic scale.

Governance

Those who benefit from the MBI guidance will be in the Member States who benefit from EU level learning on how MBI’s can contribute towards the achievement of NNL in their country and across the EU. GHK (2010) considers the significant challenges and difficulties in integrating biodiversity into decision making and it is noted how information and guidance is important, particularly where it is practical and easy for decision makers to follow. It acknowledges that research and evidence on the size and adverse impacts of incentives, on winners and losers and on options for reform can play a valuable role in making the case for reform. However, it also acknowledges that guidance and information does not deliver change by itself, and appropriate incentives are important.

EU level guidance would be most beneficial where it focuses on overcoming challenges and barriers to the use of MBI’s by policymakers across the EU, including consideration of:

Lobbying, vested interests and rent seeking behaviour;

Political acceptability – does society think it’s a good idea;

Loss of domestic/EU/global market share;


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Distributional impacts – does it disproportionately impact certain groups of people.


Environmental

Labelling and certification aim to create a link between the demand and supply side of the market and establish an advantage for those who preserve biodiversity by labelling their products as such (Ecologic, 2006). Quantifying the marginal impact of a NNL label on biodiversity outcomes (and therefore its contribution to NNL) is challenging given the uncertainty around motivations of consumer behaviour (i.e. how will consumption patterns change as a result of labelling, this will differ across products, sales structures and between different member states, Ecofys, 2014) and producer behaviour (i.e. how much voluntary action will be done). Because of the voluntary nature of labelling schemes, it is difficult to quantify how they could contribute to a NNL objective. In order to support this assessment of the potential impacts of developing an EU NNL label, a discussion that covers: (i) where progress on EU NNL labelling is needed; (ii) where there is good practice (cases to learn from) that can potentially be applied to biodiversity, is provided in Annex 2.

No direct land use impacts have been identified as a result of NNL labelling, but it is possible that if certification were effective, there may be low (but currently un-quantifiable) positive impacts. These could occur on a widespread scale across many biodiversity and ecosystem services, particularly those from semi-natural habitats that are maintained by some human activity that produces market goods (in particular areas of high nature value farming), outside of N2K sites and EU priority habitats and species.

Economic and Social

There would be expected to be one-off costs (€) for NNL labelling that would fall onto the general public. These are expected to be as a result of establishing the standards and scientific basis of NNL certification which will take some time and resources; as well as for consumer information and awareness-raising activities. Recurring public costs are expected to be low – they would involve monitoring of businesses awarded the standard on an on-going basis, and periodic review and update of the standard to ensure it delivers the benefits it claims. Private one-off and recurring costs are expected to be low-moderate but voluntary. One-off costs are associated with adapting practices to meet certification requirements. Recurring costs (€/year) will be annual independent verification of meeting certification requirements. The distribution of costs will depend on the sectors the certification targets apply to. The expected benefits (other than NNL) relate to economic activity, jobs, health / quality of life, and other. Economic activity benefits will generate a need for consultants and auditors of certification. NNL labelling may result in a small increase in labour demand for new certification experts, but relevant expertise already exists


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in current businesses. In addition, this labelling may have indirect benefits if certification leads to companies reducing bad practices, thus potentially improving health / quality of life. Other benefits included a competitive advantage for businesses that participate in certification and sell to markets where consumers care about NNL.

Governance

In terms of impacts on governance, 4 have been identified and discussed. Impacts on clarity as a result of NNL labelling are expected to be moderate. Labelling will aim to make it clearer for consumers to support NNL objectives, but the technical nature of labelling risks a lack of clarity on the procedures and requirements of certification. The impact on measurability is expected to be good to moderate as the common measures of certification success are market-share or certified land area under management (for food, fibre, and other good derived from ecosystem provisioning services). Feasibility of NNL labelling is expected to be moderate as it is feasible, but significant technical work is required to implement a NNL certificate: the standards and scientific methods do not yet exist. The policy option should be widely accepted, due to its voluntary and positive nature. However, any certification requires strong reporting and monitoring to ensure the purported benefits are being delivered. This means that enforcing NNL labelling may not be needed.


Who faces costs?

There would be low public sector costs of setting up and maintaining the use of MBIs. Costs could also be faced by sectors/producers whose competitors’ gain an advantage as a result of the MBI. However, such costs would be expected to be balanced by beneficial impacts to producers supporting NNL, thereby having a neutral impact overall, or possibly minor impacts due to the transactions costs and potential deadweight loss involved.

Who benefits?

The benefits for biodiversity from MBIs would generally arise from better overall management of natural resources and ecosystems, rather than species-specific measures. Therefore they would be expected to be associated with wider improvements in ecosystem services and resilience. They would encourage implementation of the NNL hierarchy, but would not enforce this strongly at any particular stage in the hierarchy.

As part of market mechanisms, MBI measures would have flexibility to be targeted to the greatest ecosystem services benefits. They could decrease employment in sectors facing increased costs, but also offer additional employment opportunities in new markets - on balance they are considered to have a neutral impact on jobs.


Market instruments are a key influence on future biodiversity and ecosystem services levels in the EU, and progress can be made extending well-evidenced good


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practice. However, they are mainly a Member State competence, so the potential for EU-level guidance to influence outcomes is limited at present.

Markets for more sustainably produced goods are expanding (e.g. MSC certified fish, fair-trade coffee) and there is potential to extend these existing labels, and establish new ones, to reflect biodiversity impacts such as NNL. Such labelling could support other measures to develop markets for products with net biodiversity benefits under other instruments (e.g. PES in MBI 1, businesses with NPI though biodiversity offsets under Of 1 & Of 2).



Both MBI options are voluntary in nature and would therefore be expected to have relatively high feasibility and low cost. They could in theory have major conflicts with other objectives, but given their voluntary nature, in practice guidance suggesting policy options leading to significant conflicts would be unlikely to develop. This reflects the uncertain nature of the policy changes it could stimulate.

MBI 2 is a more specific proposal and therefore is summarised in Table 13-3. Its design has greater challenges in terms of its feasibility, because of technical challenges in assessing the range of direct and indirect impacts of organisations, products and services. However, benefits for biodiversity and ecosystems could be significant, particularly in markets with existing labelling practices that could be aligned with NNL objectives (e.g. food). Neither option could be expected to make a substantial contribution to achieving NNL in their own, but instead could be considered as potential tools that support other initiatives.

As shown in Table 13-4, there is no major difference in the expected impacts of the MBI policy options between 2020 and 2030 on a technical basis. However, the practical pace of political progress means they may be more likely to take effect by 2030. One exception to the technical uniformity of impact is with respect to health and wellbeing - some lag from better management of ecosystems through MBIs to these wider benefits is expected, making them greater in 2030.

One difference between the options is that the impacts of MBI 2 (a NNL label) on biodiversity would be easier to identify than those for MBI 1 (guidance). Given the strong influence of fiscal instruments on natural resource use, and hence biodiversity and ecosystem services, across the EU, MBI measures have high coherence with other sustainable development policies. Progress could be made extending well-evidenced good practice by introducing a NNL label within expanding markets for sustainable produce. Coordination can help to level the playing field with respect to biodiversity incentives within the single European market.

Overall, a major aspect of MBIs is their potential role in supporting a package of policy measures to achieve NNL, as reflected in the examples in Annex 2. This is the reason behind their significant benefit to coherence with SD and other policies, as identified in Table 13-4.


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See text for discussion of MBI 1



MBI 2

One-off development costs of €millions, with ongoing management costs of €100,000’s per Member State.

Change in competitive advantage between suppliers in markets.

Taxpayers and/or producers who pay for development and management costs.

Suppliers whose competitors qualify for the NNL label.

Potential increased demand for goods from production systems supporting NNL (e.g. HNV farming), resulting in protection and enhancement of ecosystems, and services from them (e.g. water supply, hazard control).

Consumers in terms of having a wider choice of product information.

Wider population benefitting from ecosystem services associated with ecosystems protected or enhanced as a result of a NNL label.


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Table 13-4: Overview of potential impacts of options associated with MBIs


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual Market Based Instruments


MBI 1 MBI 2 Comb-

ined

Incremental benefit





Significant biodiversity and ecosystem service loss ongoing - i.e.

Net Loss ↗↗ ↗↗ ↗↗


not fully implemented ↗ ↗ ↗






↗ ↗ ↗↗






↗↗ ↗↗ ↗↗↗


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↘ ↘ ↘

Financial costs (one-off) ↘↘ ↘↘ ↘↘

Financial costs (recurrent) ↘ ↘ ↘


↘ ↘ ↘





No baseline estimated on jobs - - -


Access to nature variable, and affected by overall loss of

biodiversity, but range of efforts to increase access underway across the

EU. Insufficiency for certain communities.

↗ (2020)

↗ (2020)

↗ (2020) ↗↗

(2030)


Loss of biodiversity and significant erosion of ESS widespread across the EU will persist for future generations

- raising equity concerns.

↗↗ ↗↗ ↗↗




Clarity


↗↗ ↗↗ ↗↗

Measurability ↗ ↗↗↗ ↗↗↗


Enforceability ↗↗ ↗↗↗ ↗↗↗


↗↗↗↗ ↗↗↗ ↗↗↗↗


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As shown in Table 13-5, MBI guidance would improve existing implementation of biodiversity policies, given that such instruments are already a major influence on natural resource use, and hence biodiversity and ecosystem services levels, across the EU. They would also improve existing governance of resource use, through the additional incentives available. However, as an instrument to be implemented via Member States, they are in line with subsidiarity principles.






4: Subsidiar-

ity

A: B&H

directives

B: Wider policies &

tools


making

B: Guidance for

implementation


X


X X x


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14 IMPACTS OF NNL MEASURES: OFFSETS


According to the Business and Biodiversity Offsets Programme99 “Offsets are measurable conservation outcomes resulting from actions designed to compensate for significant residual adverse biodiversity impacts arising from project development after appropriate prevention and mitigation measures have been taken. The goal of biodiversity offsets is to achieve no net loss and preferably a net gain of biodiversity with respect to species composition, habitat structure and ecosystem function and people’s use and cultural values associated with biodiversity.” Offsets are most often applied at a project level to built developments (e.g. housing, industry and transport infrastructure) and extractive industries (mines and quarries etc.) that have individually significant, distinct and measurable environmental impacts and therefore require some form of environmental permit. Project level offsets may be desirable for a number of reasons, such as to ensure that the party causing damage to biodiversity is accountable for that damage, to enforce the polluter pays principle, and to help ensure that the required offsets are delivered.

Case studies100 and previous reviews (Albrecht et al, 2014; Bull et al, 2013; Bull et al, 2014; Conway et al, 2013; Darbi et al, 2009; Darbi et al, 2010; EFTEC and IEEP, 2010; Gardner and von Hase, 2012; Gardner et al, 2013; McKenney and Kiesecker, 2010; Morandeau and Vilaysack, 2012; Quétier et al, 2014; ten Kate et al, 2004; Tucker et al, 2014; Wende et al, 2005) of international experience of biodiversity offsetting experience indicate that if properly designed and fully and carefully implemented and monitored they can result in no net loss (or a net gain) of biodiversity (and any targeted ecosystem services) in a practical and cost-effective way. Indeed, it is not realistically feasible to eliminate residual impacts from all developments, and therefore some degree and form of effective offsetting is therefore arguably essential to achieve NNL.

Offsets may be carried out in relation to the impacts of specific projects and at the time of their impact (or in advance once the project is approved and its expected impacts are clear). However, offset measures such as habitat restoration may also be carried out speculatively in advance in habitat banks (or biodiversity banks) (Conway et al, 2013; EFTEC & IEEP, 2010; Hansjürgens et al, 2010). This creates a market for offsets, such that the credits from the biodiversity gains from a bank can be purchased to offset the debit from biodiversity losses. Credits can be produced in advance of, and without ex-ante links to, the debits they compensate for, and stored over time. Banks can also result in the pooling of offset credits, which can increase the size of restored or created habitats, which can increase their ecological value as well as reducing their unit cost of restoration and management.

A major constraint on offsetting and habitat banking in the EU is the lack of a developed legal framework at the EU level and in most Member States that requires offsetting of residual impacts on biodiversity outside the Natura 2000 network (where compensation

99

http://bbop.forest-trends.org/pages/biodiversity_offsets 100

Eg BBOP case studies: http://bbop.forest-trends.org/pages/pilot_projects

http://bbop.forest-trends.org/pages/biodiversity_offsets

http://bbop.forest-trends.org/pages/pilot_projects


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measures are required – see chapter 5). Consequently, offsetting is infrequently carried out in the EU. The NNL Policy Options Study (and NNL Working Group) therefore concluded that, to make a significant contribution to the NNL initiative, offsetting would need to be mandatory rather than reliant on an enhanced voluntary approach. This would therefore require new legislation for most Member States and/or at the EU level.

Although some degree of offsetting is required to achieve NNL, the offsetting reviews listed above indicate that there are significant and proven risks from offsetting. In the EU, these could include a lowering of protection levels (i.e. a ‘licence to trash’) in those cases where a certain protection regime is already in place; failure to achieve intended NNL (e.g. due to inaccurate measurement of impacts and potential offset gains, incorrect design or location of the offset, offset implementation failures and a lack of monitoring and enforcement), a lack of additionality from the actions and unstained long-term benefits. It should also be remembered that interim losses may occur and some biodiversity losses (e.g. of very sensitive habitats) cannot be offset. To ensure offsetting is effective and not counter-productive, any offsetting policy framework and legislative instrument must address these risks through proper application of the NNL hierarchy, requirements for minimum design and implementation standards supported by adequate monitoring and reporting, and enforcement measures where necessary. In view of these considerations the Policy Options Study put forward the following four options in increasing order of ambition:

Offsets Policy Option 1 (Of 1): EU Offsetting framework and implementation plan to promote agreed types of offsetting according to defined standards.

Offsets Policy Option 2 (Of 2): EU Framework with mandatory offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem services.

Offsets Policy Option 3 (Of 3): Mandatory requirements to offset significant losses of scarce biodiversity and ecosystem services.

Offsets Policy Option 4 (Of 4): Mandatory EU requirements to offset losses to all biodiversity and ecosystem services.

It is important to note that in order to achieve NNL in full the inclusion of Of 4 would be essential, in combination with other policy measures to avoid and reduce impacts. However, as discussed in section 3.2, the development of mandatory offsetting underpinned by an EU legislative framework (i.e. Of 3 and Of 4) are not considered to be feasible before 2020 (because a considerable amount of time would be required to establish the offsetting framework and legislation, and institutional capacity needed to support and regulate the scale of offsetting that would occur under these mandatory regimes). Therefore these options are not included in this study. Of 2 would require changes to the funding instruments’ legislation, which would also not be feasible before 2020. Therefore this measure has been revised in this study, so that it now encourages Member States to offset impacts from EU funded projects, rather than making this a requirement.

The two offsetting policy measures are more fully described in the next section.


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Of 1: EU Offsetting framework and implementation plan to promote agreed types of offsetting according to defined standards.

This option involves defining an EU-wide framework to encourage the use of defined standards for offsetting according to defined standards and the following additional measures to facilitate offsets:

An EU policy statement on the use of biodiversity offsets to compensate for unavoidable residual impacts on biodiversity, defining the role of offsets in the broader NNL framework, principles for their application (see below), and the role of the EU, Member States, civil society, businesses and other stakeholders in encouraging their use.

The development of EU guidance designed to inform the development and application of offsets by EU institutions, Member States and businesses (e.g. linking to the NNL label under MBI 2).

An EU platform to encourage adoption of offsetting and to promote sharing of experience. This could include a website, promotional materials, working groups, conferences, events, demonstration projects and inter-regional co-operation projects.

Initiatives to encourage voluntary offsets by businesses and other organisations, promoted through the EU Business and Biodiversity Platform and other programmes.

Monitoring and reporting of offsetting in the EU. This should record levels of offsetting activity, either in response to Member State rules or voluntary measures, and impacts on biodiversity and ecosystem services. It should also examine the uptake, effectiveness and efficiency of different approaches to offsetting, including bespoke, fee in-lieu and habitat banking schemes, as well as different metrics and design measures. This could inform an annual report and conference assessing progress, sharing experience and promoting good practice.

To avoid the risks associated with poorly designed and regulated offsets, the policy statement should stress key principles in the design and implementation of offsets to achieve NNL, including adherence to the mitigation hierarchy, making reference to the accompanying guidance. On the basis of these principles, the EU guidance would provide information about appropriate procedures for the design, implementation and enforcement elements of offsets and habitat banks, e.g. drawing on those developed by BBOP (2012a) and the recent offset design study carried out for the European Commission (Rayment et al, 2014).

This option primarily aims to improve the quality of offsetting and therefore its biodiversity and ecosystem benefits. It would also increase awareness of offsetting that might stimulate


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increased voluntary uptake by businesses. But similar efforts to promote offsetting in England did not result in any apparent increase in offsetting (Baker et al, 2014). Furthermore the increased standards such as for high offsetting ratios (see below) would increase costs, which would be a deterrent to further voluntary offsetting. In the absence of better information, it is assumed that the net effect of these influences would be no significant change in offsetting area. Offsetting would therefore remain at its currently low level in most Member States (as discussed further in section 14.1.3).

Of 2: EU Framework with mandatory offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem services.

This option would further develop the framework and implementation plan described in Of 1. However, the requirement to offset losses of scarce biodiversity and ecosystem services would be strengthened through targeted enhancements in EU policies and legislation. In this context scarce biodiversity and priority ecosystem services would be defined as:

all globally and European threatened species as listed by the IUCN (whether protected under the Habitats and Birds Directive or not);

all species of Community interest listed in the Habitats Directive and species listed in Annex I of the Bird Directive outside Natura 2000 sites (because impacts on these species inside Natura 2000 sites are subject to mandatory compensation measures under Article 6.4 of the Habitats Directive);

species and habitats identified as being a national conservation priority (e.g. because they are nationally threatened, endemic or occur in internationally important numbers) in national biodiversity strategies and action plans, red data books or similar official documents;

habitats occurring within officially recognised Green Infrastructure protection zones or ecological networks; and

ecosystems that occur within officially recognised areas that provide important ecosystem services.

The main policy enhancement triggering the need for offsets would be strong encouragement for offsets for all EU funded development projects that have a significant impact on scarce biodiversity and ecosystem services. This would apply to all instruments that fund development projects, including the large infrastructure projects fund, Cohesion Funds, and the transport and energy components of the Connecting Europe Facility (i.e. TEN-T and TEN-E), and significant development projects receiving funding under EAFRD (e.g. for irrigation schemes or forest roads) and EMFF (e.g. related to aquaculture).

As discussed in chapter 3, in the NNL Policy Options Study this option had a strict requirement for offsetting, but because this would require changes to the funding instruments this is considered no longer feasible before 2020. Therefore the key element of this option would be to distribute and promote the guidance developed under Of 1 to the EU institutions and Member State competent authorities involved in the management of EU funded programmes with a European Commission letter strongly encouraging the measurement and compensation for impacts from EU funded development projects on scarce biodiversity and ecosystem services (with monitoring and reporting on the measures


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taken and their impacts). For example, in the energy sector the option could build on a communications toolkit for power grid developers, which includes information on compensation measures101.

It is not considered to be currently feasible to apply offsetting to CAP Pillar 1 payments or other payments that do not result in built developments, infrastructure or a significant change in land use (even though they have substantial biodiversity impacts compared to the baseline scenario).

As described in section 14.2.1 it is envisaged that policy option Of 2 would increase the amount of offsetting in the EU.


Offsets implement the polluter pays principle, by having a system in place that ensures that residual impacts must be addressed, and that the costs of doing so are borne by the developer. Therefore, although offsetting measures are often considered to only address the later stages of the mitigation hierarchy, both Of 1 and Of 2 would to some extent strengthen all of its components (Figure 14-1). This is because, as for the ELD measures, developers would be increasingly liable for biodiversity and ecosystem losses and would therefore be incentivised to avoid or minimise such losses where this is cost effective, which will often be the case given the costs of habitat re-creation. Thus the expected environmental effects of the options would result from:

greater avoidance and reduction of biodiversity and ecosystems service losses, and in particular those that are expensive, difficult and time-consuming to recreate (see later discussion of the costs of habitat re-creation);

increased and improved rehabilitation;

greater amounts and more effective offsetting under Of 1 as a result of increased awareness and the higher standards that require larger offset ratios to take account of risk and time preferences (see below), although this might be counter-balanced by declines in voluntary offsetting due to its resulting higher costs; and

greater amounts and more effective offsetting under Of 2 as a result of Member States (or regions) choosing to require mandatory offsetting for impacts on scarce biodiversity from EU funded projects (or at least some of them).

101

https://webgate.ec.europa.eu/multisite/gridcommunicationstoolkit/en/content/compensation-measures

https://webgate.ec.europa.eu/multisite/gridcommunicationstoolkit/en/content/compensation-measures


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Figure 14-1 The potential contribution of offsetting to no net loss in relation to the mitigation hierarchy


Within the EU, offsetting is only a fully mandatory requirement at the moment in Germany and in France for certain biodiversity impacts (Conway et al, 2013; Tucker et al, 2014). Offsetting is therefore infrequently carried out, and in most countries is restricted to situations where it is a planning / permitting condition for certain high profile publicly funded projects or private projects with high biodiversity impacts. Some companies also carry out voluntary offsetting for public relations reasons or to meet cooperate social responsibility targets (such as NNL targets).

Offsetting has been mandatory in Germany since 1976 for all development projects, such as roads, industry, wind turbines and housing (but excluding agriculture, forestry and fisheries) (Albrecht et al, 2014; Darbi and Tausch, 2010; Tischew et al, 2010; Wende et al, 2005). In France, the regulations concerning the mitigation of development impacts have been progressively strengthened with offsets now required for impacts on forests, wetlands, and protected species, among others, although there are concerns over its effectiveness (Quétier et al, 2014; Regnery et al, 2013). As France and Germany together comprise 22% of the surface area of the EU102, this would suggest that a similar percentage of EU

102

http://europa.eu/about-eu/facts-figures/living/index_en.htm

http://europa.eu/about-eu/facts-figures/living/index_en.htm


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development projects are subject to offsets, but this assumes that developments are evenly spread across the EU and all impacts are offset. This assumption is unlikely to be realistic and it is not clear what levels of impact are required before offset requirements are triggered, and therefore the proportion of EU development projects that are offset in practice is uncertain.

In an attempt to estimate the amount of offsetting that is being carried out in the EU, Conway et al (2013) referred to a study of EIAs carried out by consultants GHK (GHK, 2010). This showed that 5% to 8% of new construction projects from 2005 to 2008 were subjected to EIAs, and 25% of the 16 EIA case studies included information on offsetting measures. This would suggest that offsetting was being carried out in no more than 1.25% to 2% of developments, because developments that do not require an EIA are unlikely to be offset. But the inclusion of information on compensation in an EIA does not necessarily mean such compensation is carried out as it is not an obligation of the EIA Directive. Therefore Conway et al conclude that the data “suggest that compensation resulting from EIAs arises for only a small proportion of land affected by development in the EU, and a tiny proportion of development projects.”

Recently, the revisions to the EU EIA Directive have resulted in clearer obligations for consideration of residual impacts and compensation requirements (see chapter 6.3.2), and this therefore needs to be taken into account in the BaU scenario. But the wording in the Directive leaves a great deal of room for interpretation and EIA remains a procedural instrument that informs decisions rather than forcing actions. Therefore, it is not possible to reliably predict the impact of the EIA revisions on 2020 offsetting levels across the EU.

On the basis of the above considerations (including the fact that offsetting does not necessarily need to be carried out if mentioned in an EIA) it is assumed for the purposes of this study that the BaU baseline for offsetting development projects in 2020 in the EU will be 1% of the impacted area.



Scale of offsetting

It is envisaged that policy option Of 2 would increase the amount of offsetting in the EU, but this increase is very difficult to quantify as it depends on two key factors: the proportion of built EU development that requires offsetting that is financed through EU funds, and how much offsetting the Member State authorities would chose to undertake as a result of this action. Data on the proportion of EU built development that is EU financed are not available, but a rough estimate can be obtained by comparing the total EU budget for the main EU funds that have the potential to lead to built developments with the total value of the construction industry. The main EU funds that support built developments and their 2014-2020 multiannual financial framework (MFF) allocations are:


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The Connecting Europe Facility (CEF) allocation of €26.2 billion for transport projects (including €11.3 billion transferred from the Cohesion Fund, see below)103. The portion of the funds that will lead to built developments is unknown, but likely to be high, so for this cost estimate we assume that it will be 75%, giving €19.6 billion of EU funding for construction projects. However, the EU funding contribution to total projects costs is normally 50% for transport projects under the CEF, so therefore the total value of EU funded transport construction under the CEF is estimated to be about €39.3 billion.

The Connecting Europe Facility (CEF) allocation of €5.35 billion for energy projects for the period 2014 – 2020 (after the EFSI-share of half a billion). The portion of the funds that will lead to built developments (e.g. renewable energy projects, power plants and power lines) is unknown, but likely to be high, so for this cost estimate we assume that it will be 75%, giving €4 billion of EU funding for construction projects. However, the EU funding contribution varies according to the project type, typically from 10% to 40%, so it is difficult to estimate the likely overall value of EU funded energy construction under the CEF. Assuming that the average financing rate is 25% then the total value is about €17 billion.

Cohesion Funds, with €63.4 billion104 available (excluding €11.3 billion transferred to the CEF). The portion of the funds that will lead to construction is highly uncertain as the funds cover a range of objectives including some that may lead to built developments (e.g. supporting the shift to a low-carbon economy, and promoting sustainable transport and improving infrastructure), but others would not (e.g. improving the efficiency of public administration). For this study we assume that it will be 50%, giving €31.7 billion of EU funding for construction projects. The co-financing arrangements for Cohesion Funds are complex, but according to the European Commission, the total EU investment under the 2015-2020 MFF of €325 billion will lead to about €500 billion of spending as a result of national contributions and the leverage effect of financial instruments,105 so the overall EU contribution will be about 65%. Assuming the same EU contribution of 65%, then the overall value of construction projects directly receiving Cohesion Fund support is €48.8 billion.

The European Regional Development Fund (ERDF) allocation of €23 billion on the low carbon economy106. The portion of the ERDF funds that will lead to built developments is very uncertain, as a wide variety of projects may be funded, including some that would result in construction (e.g. the production and distribution of some forms of renewable energy), but others would not (e.g. improving energy efficiency in buildings, awareness raising and research). For this cost estimate we assume that it will be 50%, giving €11.5 billion of construction projects. Assuming the overall EU contribution of 65% to the overall Cohesion Policy

103

Article 5, Regulation (EU) No 1316/2013 104

http://ec.europa.eu/regional_policy/index.cfm/en/funding/available-budget/ 105

http://europa.eu/rapid/press-release_MEMO-13-1011_en.htm 106

http://ec.europa.eu/regional_policy/sources/docgener/informat/2014/fiche_low_carbon_en.pdf

http://ec.europa.eu/regional_policy/index.cfm/en/funding/available-budget/

http://europa.eu/rapid/press-release_MEMO-13-1011_en.htm

http://ec.europa.eu/regional_policy/sources/docgener/informat/2014/fiche_low_carbon_en.pdf


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budget also applies to this ERDF, then the overall value of the construction directly receiving ERDF support is €17.6 billion.

The total value of built developments under these EU funding instruments is €123 billion. In addition, the CAP and EMFF fund some agriculture and aquaculture projects that would require offsetting (e.g. farm roads, irrigation or drainage systems, or fish processing facilities). These are not included because, although the budget allocations for such projects cannot be readily distinguished from other activities, they are known to be a very small proportion of their total budgets.

The total turnover of the construction industry in the EU-27 was €1,548 billion in 2010107. According to Eurostat, 22% (€341 billion) of this was civil engineering works (e.g. railways, roads, bridges, airport runways, dams), which are most likely to receive EU funding and result in impacts on biodiversity that would require offsets (the remainder being the construction of buildings, which would receive little EU funding). Therefore, over the seven year 2014-2020 period the turnover of the civil engineering sector is expected to be about €2,384 billion. This assumes that the 2010 construction figures are reasonably representative of the 2014-2020 period. This assumption seems reasonable according to construction index data, which show that although construction output declined by about 10% between 2010 and 2013 it was showing a recovery by 2014108.

Thus, over the 2014-2020 period the roughly estimated €123 billion of EU funded construction projects are 5.1% of the €2,384 billion civil engineering total turnover. Therefore, for the purposes of this analysis the calculation above is rounded down slightly, so it is assumed that EU funded construction projects are about 5% of the total footprint (i.e. area) that is likely to require offsetting .

The amount of offsetting that the Member State authorities would choose to undertake as a result of Of2 would depend greatly on institutional attitudes and priorities and political will, which cannot be reliably predicted even over the relatively near future to 2020 let alone to 2030. It will also vary considerably amongst EU Member States. As this latter factor is particularly difficult to estimate, this assessment of the impacts of policy option Of 2 is based on possible offsetting scenarios, rather than evidence based predictions. For the purposes of this study it is assumed that 50% of the relevant EU funded development projects would be offset. As discussed in section 14.1.3 on baselines, about 25% of EIAs mention compensation measures and the new EIA regulations strengthen the requirements for compensation needs for residual impacts to be considered. Therefore, as most, if not all, EU funded development projects would require an EIA this measure would approximately double offsetting compared to current practices, which seems reasonable.

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http://ec.europa.eu/eurostat/statistics-explained/images/9/9a/Sectoral_analysis_of_key_indicators%2C_construction_%28NACE_Section_F%29%2C_EU-27%2C_2010_A.png 108

http://ec.europa.eu/eurostat/statistics-explained/index.php/File:EU28_construction_building_civil_engineering_m_sa_2000-2014.png

http://ec.europa.eu/eurostat/statistics-explained/images/9/9a/Sectoral_analysis_of_key_indicators%2C_construction_%28NACE_Section_F%29%2C_EU-27%2C_2010_A.png






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However, as 100% offsetting would be required for projects that have biodiversity impacts to be sure to achieve NNL (assuming all EU funded projects would have some impacts) this is also assessed as a comparator, and to show the potential impacts that a mandatory requirement would have, if added in the future. Therefore taking into account the assumed proportion of developments that should be offset that are EU funded and the possible range of offsetting that will occur, the following two scenarios are used:

Scenario A: 2.5% of development projects in the EU are offset (i.e. 50% of the 5% of EU construction projects that are EU funded). Scenario B: 5% of development projects in the EU are offset (i.e. 100% of the 5% of EU construction projects that are EU funded).

Offsetting may also be supported through linkages to ELD policy option 2, which requires wider and more effective application of retrospective offsets (i.e. remedial measures) for impacts on nationally threatened biodiversity and Biodiversity Proofing (BP 1). However, to avoid double counting it is assumed that any increase in offsetting from those options would be subsumed within the Of 2 scenarios above.

Environmental

The potential environmental benefits of biodiversity offsetting include the maintenance of, or increases in biodiversity (e.g. with respect to genetic diversity, species’ populations and range, species diversity, habitat diversity and condition and landscape diversity) and associated ecosystem service benefits to a range of beneficiaries. However, it is important to note that as offsets are not in the same location as the impacts the ecosystem service beneficiaries may not be same as those facing the loss of biodiversity (depending on the geographic constraints on offsetting and which ecosystem service is affected). Furthermore, it can take many years for offset to achieve their biodiversity and ecosystem service objectives (although other interim beneficial impacts may arise from the outset).

The effectiveness and environmental impacts of offsetting vary greatly depending on a number of factors (BBOP, 2012b; Bull et al, 2013; Carroll et al, 2008; Darbi et al, 2010; EFTEC & IEEP, 2010; Gardner & von Hase, 2012; Gardner et al, 2013; Gibbons and Lindenmayer, 2007; Maron et al, 2012; Morris et al, 2006; Palmer and Filoso, 2009; Quétier and Lavorel, 2011; Rayment et al, 2014). Of particular importance is the degree to which the offsets are actually implemented in practice and their effectiveness. For, example Tischew et al (2010) found that out of 119 offset sites in Germany only one third fully or mostly achieved their (326) defined compensation goals and that deficient follow-up management significantly hindered the achievement of their goals. Under-performance often results from a number of design and implementation failings, including attempts to provide offsets through habitat that cannot be reliably restored / re-created, use of overly simplistic or inappropriate metrics, inappropriate siting of offsets (e.g. too close to development sites, or in isolated situations), lack of expertise and experience amongst offset providers, unexpected events (eg severe weather, pollution, invasive species) and inadequate provisions for long term protection and maintenance. However, as revealed in a recent study for the European Commission (Rayment et al, 2014), such problems can be largely avoided if offsets are


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designed according to recognised international principles, standards and good practices, which are enforced if necessary.

Potential environmental benefits are also greatly influenced by the relationship between the species, habitats and ecosystem services that are impacted (debits) and those that are the subject of offsetting (credits), or in other words the degree of trading up that may occur. Thus, for example, offsetting an area of intensively managed arable land with the re-creation of an area of semi-natural grassland could provide substantial biodiversity benefits. Such decisions are highly dependent on the metrics that are used to measure debits and potential credits and the exchange rules that govern whether offsetting should be like for like, or can be for other species or habitats of higher biodiversity importance. Where offsets are not like for like then their outcomes are highly influenced by the offsetting ratios that are set (e.g. four hectares of intensively managed arable land might be offsetable by creating one hectare of semi-natural grassland).

Benefits also increase if offsetting is done in a strategic and coherent way that creates large ecologically coherent blocks of habitat that deliver more than the sum of the smaller areas impacted by development. Habitat banking can be a means of achieving such increased environmental benefits (eftec et al, 2010). The location of the offset is also important as judicially placed areas of restored or re-created habitat can help to enhance the resilience of existing areas of habitat, for example by complementing or extending key ecological processes, buffering areas of sensitive habitat (eg from pollution) and increasing the size and therefore viability of small isolated populations of species (Crooks and Sanjayan, 2006; Lawton et al, 2010). Such enhancements in ecosystem condition may in turn lead to increases in breeding productivity for species, which can lead to population sinks (ie those dependent on immigration for long-term survival to becoming sources of emigration, thereby enhancing ecological connectivity. Improved ecological connectivity can help sustain populations across the landscape (i.e. metapopulations) and increase gene flow. Ecological connectivity can also be increased by placing offsets in locations that can act as ecological corridors or stepping stones.

Therefore, with appropriate targeting, objectives, locations and implementation offsets should as a minimum result in no net loss of biodiversity and ecosystem services where these can be restored/re-created. Furthermore, as pointed out by Treweek (2009) and eftec et al (2010) they can provide net gains, for example by:

aiming to recreate/restore more biodiversity than is lost. In fact, given that the re-creation of habitats is uncertain, offsets should aim to provide net gains by including a certain amount of contingency (see later discussion on dealing with risks);

contributing to Biodiversity Action Plan targets by compensating for losses of low priority habitats by enhancing or restoring higher priority habitats (i.e. trading up);

increasing the resilience of existing habitat patches (and the viability of associated species populations) by extending them or buffering them through the re-creation of adjacent habitat;

enhancing ecological connectivity / reversing fragmentation (i.e. contributing to ecological networks and Green Infrastructure) by creating corridors, stepping stones etc. in strategically important locations; and


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enhancing / re-creating habitats / ecosystems that provide additional services to those that were present before (whilst ensuring NNL of pre-existing ones where necessary).

With respect to the potential for providing net gains in biodiversity it is important to bear in mind that Of 2 focusses on ensuring NNL of scarce biodiversity. Therefore the scope for trading up would be limited because offsets would not normally be required for losses of low biodiversity habitats such as arable farmland unless, for example, they held particularly important species. Furthermore, impacted scare biodiversity would normally require like for like offsets.

However, even when offsets are themselves shown to have measurable benefits, it is necessary to ensure that these are not impacts that would have occurred anyway as a result of expected environmental actions, albeit in another way and location. Thus the actual additionality of offsets needs to be considered carefully in comparison to the counterfactual situation. Therefore, it should be remembered that compensation for residual impacts within Natura 2000 sites is already a mandatory requirement (as discussed in chapter 5). Furthermore, since scarce biodiversity may be subject to national and local conservation measures (e.g. restoration targets within Biodiversity Action Plans), the additionality of offsets for such biodiversity may be low. The regulation and approval of offsets therefore needs to pay close attention to their additionality, with the aim of ensuring that only conservation projects that would not have occurred in the absence of the offsetting requirement should qualify as offsets.

Biodiversity impacts

The environmental impacts of Of 1 (i.e. an EU framework and implementation plan), would be primarily expected to result in an increase in the quality of offsetting, rather than increasing the amount of offsetting. This might indirectly result in larger offsets as a result of the higher standards including higher offset ratios to take account of risks and time preferences. But, as offsetting is voluntary under this measure, this increase might be counteracted by a decrease in the number of offsets as the higher standards would increase offsetting costs and lead to earlier mitigation measures. As it is extremely difficult to assess the likely increase in quality and changes in the quantity of offsetting that would result from this measure, its environmental impacts (and costs) are not quantified in this study. However, offsetting option Of 2 (i.e. an EU Framework to promote offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem services) would be expected to increase offsetting, and therefore we have attempted to quantify its potential environmental impacts below.

As discussed in section 0, it is considered plausible that Of 2 could result in about 2.5% of development projects in the EU being offset (i.e. 50% of the 5% of EU projects that are EU funded) and is referred to as scenario A. As a comparator, an estimate of the impacts of Of 2 is also made under Scenario B, in which 5% of development projects in the EU are offset (i.e. 100% of the 5% of EU projects that are EU funded).


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The actual impact of these offsetting scenarios primarily depends on the types and amount of habitat that are restored/re-created as offsets, and this depends on a number of key offset rules, that will vary amongst schemes, which are set out below.

The amount of land holding scarce biodiversity

As Of 2 only requires offsets for scarce biodiversity, including priority ecosystems, (as defined section 14.1.1), it is necessary to consider the amount of land/habitat that would fall into this category. No readily available information on this currently exists and therefore this can only be estimated by judgement. However, the following broad habitats that are used in the calculation of impacts can be considered to normally qualify as scarce biodiversity: natural and semi-natural grasslands, heathland and shrublands (including sclerophyllous vegetation), rivers, wetlands and coastal habitats. Most forests would also qualify, but plantations of alien species (such as Eucalyptus) would not, unless they were to hold some threatened species or have important ecosystem service functions. It is therefore difficult to estimate the amount of forest that would qualify as scarce biodiversity, but for this assessment it is assumed to be 90%.

Arable land, improved grassland and permanent crops are not scarce habitats and of conservation importance in themselves, however, they can support a number of scarce and declining species, especially if they are not too intensively managed and/or subject to agri-environment measures. Again, the proportion of such habitats that would qualify as holding scarce biodiversity is very difficult to estimate, but for this study it is assumed to be 10% for pasture, and 5% for arable farmland and permanent crops, in order to obtain an approximate extent of the likely magnitude of impacts. Given the large area of these farmland habitats in the EU it is important to note that estimates of the required area, and resulting costs, of offsetting will be particularly sensitive to changes in this assumption.

Some artificial habitats (i.e. brownfield sites) such as mine spoil heaps and derelict urban land can hold rare and threatened species, and should therefore be subject to offsetting. However, the area of such sites is a very small proportion of artificial surfaces (probably well below 1%), so impacts are not considered in this study.

The ‘kind’ of biodiversity that may be provided as an offset

Offsets are normally governed by exchange rules that consider what, if any, kind of substitution for biodiversity impacts is acceptable according to ecological principles and information on the status of biodiversity within the impacted area, but also in the wider context of regional, national and biogeographical considerations. The need to provide like-for-like offsets generally increases as the potential ecological value of the habitat increases (Eftec and IEEP, 2010; Tucker et al, 2014). Thus, threatened habitats such as those listed in Annex I of the Habitats Directive should be subject to strict like-for-like compensation. Although offsetting measure Of 2 does not consider offsets for impacts within Natura 2000 sites (as this is covered by measures relating to the Habitat Directive), offsets for Annex I habitats outside Natura 2000 should also be on a like-for-like basis. For habitats of moderate potential ecological value, it is appropriate to define habitats and therefore offset requirements more broadly, and as discussed above, it may be beneficial to offset the impacts with higher value


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habitats. Where habitats of low ecological value are impacted then it is normally appropriate to trade-up.

For this impact assessment study, we assume that offsets are like-for-like, except for impacts on arable land and permanent crops, which are offset with semi-natural vegetation. Although some offsetting of agricultural habitats and other grasslands could be by forest restoration/re-creation, this is considered unlikely to be widespread as many semi-natural grasslands are being abandoned and subject to natural forest re-generation, and therefore current conservation priorities are to normally to maintain such grasslands.

Offset ratios For like-for-like offsetting the amount of habitat that is restored/re-created is normally at a 1:1 ratio (but with multipliers to take into account offsetting risks and delays in provision – as described below). However, if other types of habitat are to be provided then their equivalency needs to be considered and defined as a required offset ratio. Offset ratios primarily take into account the relative biodiversity value of each habitat, and are typically set by expert judgement. For example, scheme rules might allow the loss of 1 ha of intensive arable farmland to be offset by 0.5 ha of improved grassland or 0.2 ha of semi-natural grassland. Offset ratios vary considerably and it is not possible to identify normal ratios for the EU. For the purposes of this study, the ratios used in the Defra pilot offset scheme in England (Defra and Natural England, 2012) have been followed, as these were based on an assessment of typical international practice (see Annex 3 for details).

Risk multipliers There are a number of typical risks that can affect the outcome of an offset project that include incomplete measurement of biodiversity losses, constraints on the feasibility to offset some types of losses, inappropriate use of surrogate measures of biodiversity, uncertainty due to incomplete data, uncertainty due to the complexities of the ecosystems being addressed, the influences of external factors (e.g. climate change, invasive species, fire and extreme weather) and technical issues concerning inadequately tested offset methods, financial failure and changes in political will (BBOP, 2012c). In accordance with the precautionary principle, risk multipliers are therefore often used to increase the basic offset ratio (see above), thereby helping to account for concerns that the offset may not be sufficient to deliver a no net loss outcome (Rayment et al, 2014). Ideally, the calculation of appropriate risk multipliers should be based on empirical analysis (e.g. offset failure rates, if they have been adequately monitored). But in practice multipliers are often generic (Gardner et al, 2013). This is despite earlier research that indicated that for restoration offsets, the multipliers that are used are often too low (Moilanen et al, 2009). If calculated appropriately (i.e. the probability of failing to achieve NNL is minimized), very high multiplier ratios may be required (e.g. >1:100). The recently developed metric being used for pilot offsets in England did use the work by Moilanen et al as a basis for the calculation of risk multipliers for


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restoration/recreation offsets, and therefore its risk multipliers are used in this assessment of impacts (see Annex 3).

Time preference multipliers The restoration, and especially the re-creation/creation of habitats can take many years, whilst development projects often result in rapid losses of biodiversity and ecosystem services (Curran et al, 2014; Morris et al, 2006). Consequently, there can be long temporal gaps in the achievement of NNL. To adjust for this, time multipliers are often applied to offsets, based on discount rates that aim take account of time preference, and to weigh up losses and gains achieved at different points in time (Rayment et al, 2014). Time preference multipliers were included in the biodiversity metric proposed by Defra for use in the pilot offsetting scheme in England. The metric used the standard discount rate of 3.5% used by HM Treasury in the appraisal of public projects. This metric assumes that 1 hectare of habitat today is the equivalent of 1.035 hectares of the same habitat in one year’s time. Thus a multiplier of 1.035n would be used to discount a gain in biodiversity achieved in n years’ time. As these multipliers are considered to reflect typical practice, they have been adopted for this study, with time multipliers for the creation of habitats being 1.2 for water bodies (based on average delivery in 5 years), 1.4 for wetlands and grasslands (i.e. 10 year delivery), 2 coastal habitats (20 year delivery) and 32 for forests (100 year delivery).

The calculated amount of habitat that would be provided to offset losses arising between now (2015) and 2020, according to the rules and assumptions described above and in Annex 3, for each of the Of 2 Scenarios, and the BaU scenario to 2020 is set out in Table 14-1. The BaU losses to development are based on the model results from the NNL Policy Options Study for 2000-2020 for all habitats other than wetlands, waterbodies and coastal habitats. It is assumed that 2015-2020 losses would be simply one-quarter of those between 2000-2020. Wetlands, waterbodies and coastal habitats were not covered in the study, and therefore the estimates of their losses are extrapolations of losses given in Conway et al (2013).


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Table 14-1 Summary of offsetting resulting from option Of 22 by scenario (ha from 2015 to 2020) based on offsetting through habitat creation

NB. Losses of arable land and pasture are offset with semi-natural grasslands / shrublands (see text for rationale)

Habitat type

BaU

loss

es

to d

eve

lop

me

nt

Off

set

gain

s: u

nd

er

the

BaU

sce

nar

io

Off

set

gain

s: O

pti

on

2 -

Sce

nar

io A

Ad

dit

ion

al g

ain

s u

nd

er

Op

tio

n 2

Sce

nar

io A

com

par

ed

to

BaU

Off

set

gain

s: O

pti

on

2 -

Sce

nar

io B

co

mp

aris

on

Ad

dit

ion

al g

ain

s u

nd

er

Op

tio

n 2

Sce

nar

io B

com

par

ed

to

BaU

Non-irrigated arable land

191,725 - - - - -

Pasture 256,425 - - - - -

SN grasslands / shrublands

66,150 1,643 4,107 2,464 8,214 6,571

Permanent crops 27,575 - - - - -

Forest 177,150 49,744 124,359 74,616 248,719 198,975

Wetlands 750 11 26 16 53 42

Water bodies 750 9 23 14 45 36

Coastal habitats 750 23 56 34 113 90

TOTAL 721,275 51,429 128,571 77,143 257,143 205,714

Source: BaU losses adapted from Table 3.7 of Tucker et al, (2014), except for wetlands, water bodies and coastal habitats adapted from Table 3.6 Conway et al, (2013); other calculations from Annex 3.1.

The results indicate that substantial amounts of offsetting would occur, primarily of semi-natural grasslands, and especially forest, under all the scenarios; including the BaU if carried out in accordance with the good practice as described above. This large area is primarily the result of the effect of the large time preference multiplier for forests, which multiplies the basic offset requirement (1:1) by 31.2 because it is assumed that it would take 100 years on average for most types of recreated forests to offset most of their lost biodiversity and ecosystem service values. In fact it would take much longer than this to offset the highest biodiversity value forests. On the other hand, it should be borne in mind that young forests can provide some ecosystems services and important habitats for some species.

The expected effect of Of 2 under scenario A would offset gains of nearly 124,000 ha of forest habitat would occur between 2015 and 2020, which would be nearly 75,000 ha greater than under the BaU scenario. As a result, although only about 2.5% of EU development projects are assumed to be offset under this scenario, 70% of total forest loss is offset (by area). This intended level of offsetting would be difficult to deliver in practice due to the need for large areas of suitable land. Under Of 2 Scenario B offset gains of nearly 249,000 ha would be sufficient to result in a net increase in forest cover taking into account all projected forest losses (ie including those that are not subject to offsetting).


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Given this situation it seems unrealistic to assume so much forest would be created, and instead a significant amount of offsetting would be through restoration as large amounts of forest habitat in the EU are degraded (e.g. by alien invasive species). The amount that would be restored rather than created is unknown, but for this study, we have recalculated the offset provisions in Table 14-2 assuming offsetting is 50:50 restoration/creation. As restoration does not create as great an additional benefit as creation, we assume a 1:2 ratio of impact to offset (rather than 1:1 for creation), giving an average of 1.5 for the split creation and restoration approach. As restoration can be achieved much more quickly, we assume that restoration offsets are delivered in 10 years, and therefore apply a time multiplier of 1.4 to them (rather than 32 for creation); giving an average time multiplier of 16.7.

Table 14-2 Summary of offsetting resulting from option Of 2 by scenario (ha from 2015 to 2020) based on offsetting through habitat creation and for forests habitat restoration and creation

Habitat type

BaU

loss

es

to d

eve

lop

me

nt

Off

set

gain

s: u

nd

er

the

BaU

sce

nar

io

Off

set

gain

s: O

pti

on

2 -

Sce

nar

io A

Ad

dit

ion

al g

ain

s u

nd

er

Op

tio

n 2

Sce

nar

io A

com

par

ed

to

BaU

Off

set

gain

s: O

pti

on

2 -

Sce

nar

io B

co

mp

aris

on

Ad

dit

ion

al g

ain

s u

nd

er

Op

tio

n 2

Sce

nar

io B

com

par

ed

to

BaU

Non-irrigated arable land

191,725 - - - - -

Pasture 256,425 - - - - -

SN grasslands / shrublands

66,150 1,643 4,107 2,464 8,214 6,571

Permanent crops 27,575 - - - - -

Forest 177,150 39,938 99,846 59,908 199,692 159,754

Wetlands 750 11 26 16 53 42

Water bodies 750 9 23 14 45 36

Coastal habitats 750 23 56 34 113 90

TOTAL 721,275 41,623 104,058 62,435 208,117 166,493

Source: BaU losses adapted from Table 3.7 of Tucker et al, (2014), except for wetlands, water bodies and coastal habitats adapted from Table 3.6 Conway et al, (2013); other calculations from Annex 2.

The results presented in Table 14-2 indicate that under these assumptions, a substantial but more realistic amount of forest would be offset, whilst the amount of offsetting the other habitats would remain unchanged. These offset results are therefore used in this study for the calculation of other impacts.

These changes in habitat coverage would be expected to provide significant benefits to species compared to the BaU scenario, most obviously for forest species, but also to a lesser extent those of other semi-natural habitats. If high ecological value habitats were


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restored/re-created and managed appropriately, the offsets could support some specialist species that are currently threatened. As discussed above, these benefits could be further enhanced if the offset habitats were pooled (or banked) to create large areas of viable habitat and strategically located. Such habitat areas might potentially be able to support species that require large areas of interconnected forest habitat, such as some large birds of prey and large mammalian carnivores.

It is difficult to quantify the biodiversity impacts of offsetting policy measure Of 2 alone, but an indication of its potential maximum impacts can be deduced from the modelling carried out in the NNL policy options study (Tucker et al, 2014). In that one of the main policy measures in Policy Package B was 10% offsetting of development impacts on semi-natural and forest habitats109. Three biodiversity indicators were used: bird species richness, Mean Species Abundance, and land cover connectivity potential. The projections indicated 55% higher levels of bird species richness compared to the BaU scenario. Furthermore, the expected BaU declines in species listed under Annex I of the Birds Directive (i.e. species of particular EU conservation importance) were reduced by over 60%. However, farmland bird species declined more than under the BaU as a result of the decreased area of agricultural land. Mean Species Abundance, a broader measure of biodiversity, was also projected to be higher than under the BaU, although only by 5%. Ecological connectivity also declined less. However, it is important to bear in mind that these increases were only in relation to the BaU scenario and biodiversity still declines in absolute terms. As offsetting was likely to have been one of the most influential measures included in the scenario the overall impacts of Policy Package B probably closely reflected the potential impacts of offsetting.

In this current study it is assumed that policy measure Of 2 would only result in 2.5% of all EU development impacts being offset (i.e. Scenario A), whilst the potential maximum offsetting of EU funded projects would lead to 5% of all EU development impacts being offset (i.e. Scenario B). Thus the assumed proportion of development impacts offset was higher in the NNL Policy Options Study. But the NNL Policy Options Study assumed offset ratios of 1:1 for forest and semi-natural vegetation with no time or risk multipliers. Thus the net offsetting levels were much lower than under both scenarios A and B in this study. Therefore, whilst it is not possible to accurately extrapolate the Policy Options Study results to Of 1 and Of 2 measures in this study, they do indicate that substantial biodiversity benefits would occur.

It should also be noted that the BaU scenario in the NNL Policy Options Study did not include any offsetting. As the analysis above suggests that about 1% of development project impacts are offset (and the new EIA reforms may increase this) then the relative impacts compared to the BaU scenarios are likely to be lower than these estimates, but the discrepancies cannot be reliably quantified.

109

Other model settings included 4% less built up area, disincentives to convert habitats to those that would require offsetting, incentives to retain semi-natural habitats in protected areas, incentives to reduce urban sprawl and high resistance to convert permanent grassland to arable.


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Ecosystem service impacts

The potential ecosystem service impacts associated with the changes in habitats and associated species relate to provisioning services, regulating services and cultural services – some of which are very site specific (e.g. local water purification; cultural identity) and others less so (e.g. climate mitigation). Table 14-3 below presents in more detail some of the benefits types associated with avoiding biodiversity losses via offsetting.

Table 14-3 Benefits types associated with avoiding biodiversity losses via offsetting

Benefits Group Ecosystem services / functions Quantitative Benefits

Natural Resources

(e.g. cereal crops, vegetables, livestock, food, timber, natural medicines. local breed varieties; fruit and juices from orchards)

Capacity to provide a diversified portfolio of products

Forests for wood supply

Total area of cropland/grassland suitable for livestock

Total area of low input cropland

Production in tonnes, m3 and/or

hectares

Quantity of certified products

Number of wild species used as food/ornamental resources etc.

Employment sustained by sectors

Maintenance of soil fertility

Soil carbon content

Species composition, aggregated in functional groups (eg biomass of decomposers, proportion of different trophic groups) as an indicator of process capability

Increased yield attributable to soil quality

Biological Control

Abundance and species richness of biological control agents (eg predators, insects, etc.)

Changes in disease burden as a result of changing ecosystems

Range of biological control agents (eg in km, regular/aggregated/random, per species)

Increased yield attributable to biological control

Pollination

Abundance and species richness of wild pollinators

Range of wild pollinators (eg in km, regular/aggregated/random, per species)

Proximity to natural habitat

Increased yield attributable to pollination

Storage of freshwater resources

Groundwater recharge Total area of inland water bodies and

inland wetlands

Population served by renewable water resource

Total annual freshwater consumption by sector

Water management

(e.g. natural drainage, irrigation and drought prevention, water purification)

Regulation of water flows

Water infiltration capacity/rate Water storage capacity in mm/m Floodplain water storage capacity in

mm/m

Deprived households at risk from flooding

Reduced surface water run-off

Water purification Population served by high water quality


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Water quality in aquatic ecosystems (sediment, turbidity, phosphorous, nutrients, etc.)

Biological indicators: eg Index of Biological Integrity,

Nitrogen retention Nitrogen removal

Climate regulation and adaptation

Carbon storage and sequestration

Total amount of carbon sequestered / stored =sequestration / storage capacity per hectare x total area (Gt CO2)

Total amount of carbon removed and contribution to the achievement of climate change targets

Temperature control

Evapotranspiration rate

Canopy stomatal conductance

Reduced peak summer surface temperatures

Building energy savings – heating and cooling

Storm damage control

Wind attenuation potential

Deprived households at risk from storm damage

Deprived land at risk from storm damage

Health and well-being

Air quality

Atmospheric cleansing capacity in tonnes of pollutants removed per hectare

Downward pollutant flux, calculated as the product of dry deposition velocity and pollutant concentration

Total amount of pollutants removed and contribution to air quality targets

Accessibility for exercise and amenity:

Reduced stress levels and improving mental health

Increased physical activities

Human health impacts expressed in disability adjusted life years (DALY = years of life lost + years lived with disability)

Noise regulation

Natural sound absorption capacity

Persons/year where defined threshold in dB is not exceeded due to natural sound absorbers

Investment and Employment

Image enhancement

Scenery, amenity, environmental quality

Perception surveys on the attractiveness of an area for workers/investors

Number of products whose branding relates to cultural identity

Investment and Employment

Employment resulting from Green Infrastructure initiatives

Temporary employment impacts of Green Infrastructure provision

On-going employment impacts of maintenance

Summary of employment sustained by sectors (e.g. agriculture, forestry, tourism and recreation

Labour productivity

Scenery, amenity, environmental quality

Amount of workplace individuals benefiting from GI investment or existing GI

Impact on worker’s effectiveness on the job

Tourism and recreation Tourism

Scenery, amenity, environmental quality, products, flagship species and habitats

Employment supported by tourism Amount of nature tourism Number of visitors to protected sites per

year


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Recreation

Exercise, scenery, amenity

Number of local users for hiking, camping, nature walks jogging, winter sports, water sports, angling, horse riding, hunting, cycling

Education Research and education

Flagship species and habitats, endemic species

Total number of visits, specifically related to education or cultural reasons

Total number of educational excursions Number of TV programmes, studies,

books etc. featuring sites and the surrounding area

Land and property values

Land and property

Exercise, scenery, amenity

Changes in the number of residents

Resilience Resilience Ecosystem Services

defined by a wider portfolio of services provided, with particularly emphasis on regulating and supporting services

Scoring according to portfolio of services and functions provided

Conservation benefits Existence value of habitat, species and genetic diversity

Bequest and altruist value of habitat, species and genetic diversity for future generations

Source: adapted from Genecon LLP 2010

As was the case for the biodiversity impacts, the results of the NNL Policy Options Study modelling of Policy Package B provides some insights and approximations of the quantitative impacts of offsetting option Of 2 on ecosystem services. Table 14-4 below sets out the projected impacts of Policy Package B on a range of key ecosystem service indicators compared to their 2000 baselines and the BaU 2020 scenario (see study for details).


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Table 14-4 Projected ecosystem service changes to 2020 under the NNL Policy Options Study policy Package B compared to the BaU scenario

Red cells indicate declines in the ecosystem service and green cells indicate positive changes compared to the BaU.

Service % changed compared

to BaU

Crop production -0.1

Forest biomass 0.7

Water provision 0.6

Air quality regulation 0.7

Carbon sequestration 3.4

Erosion prevention 0.1

Flood regulation 0.1

Storm protection -1.0

Pollination 1.3

Soil quality regulation 0.0

Recreation -2.4

Source: Table 6.9, NNL Policy Options Study (Tucker et al, 2014)

As would be expected from the proposed offsetting and resulting changes in habitat (discussed above), compared to the BaU scenario the main impacts are a very small decline in crop production (due to the projected decline in agricultural area) and small increases in ecosystem services that are associated with forest and semi-natural grasslands and shrublands, including carbon sequestration and, to a lesser extent, forest biomass and water provisioning. Pollination services are also slightly higher than under the BaU. This is probably in part as a result of the re-creation of semi-natural habitat in offsets in the vicinity of the croplands. These patches are suitable pollinator habitats, thus ensuring a good provision of pollination. A small decline in recreation services are projected as mosaic landscapes are assumed in the model to provide more accessible areas for recreation. As offsetting in the model reduces landscape heterogeneity close to cities, then there is a decline in the recreation indicator. However, the reliability of this indicator is questionable and in reality offsets would include a variety of habitats that would also often provide access and recreation opportunities.

The projected beneficial impacts on ecosystem services under Policy Package B are mostly marginal. Furthermore, they would be considerably lower under offsetting measure Of 1. Nevertheless, the projected positive ecosystem service changes do suggest that more significant ecosystem service benefits could be delivered from


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greater amounts of offsetting. This would be the case under both Of 2 scenarios in this study, due to the higher offset ratios (as discussed above). This would lead to greater impacts on crop production, which might need to be mitigated in some way, such as through other policy measures to reduce urban land take as this has a greater impact on agricultural land area than offsetting.

Economic

Benefits

It is possible to allocate average monetary values to the ecosystem services listed in Table 14-4. But it is not possible to use this as a basis for calculating the actual associated economic impacts of Of 1 and Of 2 from the NNL Policy Options Study because the offsetting proportions and ratios are different. Furthermore, the modelling results include the impacts of the losses of ecosystem to development as well as the changes that are due to the offsetting.

However, it is possible to estimate indicative economic impacts resulting from the changes in ecosystem services by multiplying the net changes in the main ecosystem types from the offsetting, as set out in Table 14-3, by Total Economic Value (TEV) estimates for each ecosystem. Such estimates are being compiled in a database under the TEEB project110 and the latest estimates for Europe have been used to calculate a median annual TEV value per ha, as set out in Annex 3.3. Table 14-5 presents the approximate TEV impacts up to 2030 from the offsetting options on the basis of these values. The estimates assume that the ecosystem services values will be fully realised from 2020, which may overestimate some benefits (especially for offsets that involve forest creation). It also assumes that offsets will be created on arable or pasture land (in proportion to their area in the EU, which is about 1.75:1 arable to pasture111), hence the fall in their ecosystem service values. However, it should be noted that the current TEV database has very few values for all of the ecosystems and only single values for arable land, grasslands and forest and water bodies. Therefore these figures should be treated as highly indicative.

110

Van der Ploeg, S., Y. Wang, T. Gebre Weldmichael and R.S. de Groot (2010) The TEEB Valuation Database – a searchable database of 1310 estimates of monetary values of ecosystem services. Foundation for Sustainable Development, Wageningen, The Netherlands. 111

http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Utilised_agricultural_area,_by_land_use,_2010_(1_000_hectares)_AgriPB13.png


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Table 14-5 Indicative total values of ecosystem service changes to 2030 resulting from offsetting under the BaU scenario and offsetting option Of 2

Habitats (ecosystem)

Median current value (€/ha/yr)

BaU Scenario (€ million)

Of 2 – Scenario A

(€ million)

Of 2 – Scenario B

(€ million)

Non-irrigated arable land 1,723 -260 -650 -1,300

Pasture 185 -49.1 -123 -246

SN grasslands / shrublands 185 3.04 7.60 15.2

Forest 3,050 1,218 3,045 6,091

Wetlands 5,429 0.57 1.43 2.85

Water bodies 1,521 0.14 0.34 0.68

Coastal habitats 5,605 1.26 3.15 6.31

TOTAL

914 2,285 4,570

Additional indirect economic benefits may also arise from the development of the offsetting framework under Of 1 (and its inclusion in Of 2). Although the higher offsetting standards would be expected to result in higher offsetting costs for project proponents (see above) these impacts might be compensated for to some extent by improved certainty and reduced project delays. Project delays can be very costly, and the economic benefits of reduced delays and increased certainty might outweigh the relatively small additional offsetting costs that are likely under Of 1. However, there is currently insufficient information available to quantify this possible economic benefit.

Costs

The general costs of offsetting

Although there are many gaps and the available data are far from complete, evidence of the costs of biodiversity offsetting in the EU is emerging, with data obtained for this study from Germany in Table 14-6 and Annex 4, and from France in Annex 5. Boxes Box 14-1 and Box 14-2 provide some examples of the total costs of offsetting.


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Table 14-6 Examples of offset costs in Germany

Costs of establishing the offset and development and maintenance care for 30 years, but not land purchase and related costs.

Types of Compensation measures

Detailed compensation measures Costs per ha (€)

Afforestation

Coppice forest 17,015 - 155,742

Mixed coppices 17,015 - 155,742

Forest conversion into sustained forest 47,956

Planting of trees and wood

Broad-leaf bushes on fresh ground 8,240

Orchards of high-trunk fruit trees 57,380 - 93,093

Bushes on dry and warm ground with brambles

11,426

Hedges and field trees and scrubs 15,848 - 16,226

Pollarded trees 14,983

Seeding of grasslands/ succession areas

Extensively used fresh meadow 7,665 - 26,137

Extensively used wet meadow 23,806 - 26,137

Fresh extensively used mountain meadow

18,910 - 168,129

Hydrophilic tall herbaceous vegetation 16,970 - 21,487

Fallow land 1,231 - 3,531

Mesophilic forb stands 1,231 - 4,668

Creation and maintenance of water bodies

Swift flowing rivers 19,171 - 62,998

Silently flowing rivers 62,666 - 102,497

Oligotrophic standing water 37,983

Mesotrophic standing water 36,398 - 172,020

Temporary standing water 190,138

Restoration of nature

Desealed areas 177,716

Source: Freistaat Thüringen (2003).


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Box 14-1 An example of the costs of offsetting in the German Federal State of Hessen

The German offsetting requirements apply to all sectors except agriculture, forestry and fisheries. Offsets must be approved by the regional (lower) nature conservation authority, or by the sectoral planning authorities responsible for road planning, railways, water ways, and emission control. Offset measures are financed by the developer.

Estimate of costs of offsetting to developers

An estimate of the costs of offsetting in the federal state of Hessen between 1992 and 2010 was made based on the area of registered offsets and a list of standard costs (Freistaat Thüringen, 2003) of restoration and management measures for 30 years (excluding land purchase and related costs).

Type of compensation measure

Types of costs Range of costs per ha over 30

years (€ x1,000)

Area compensated

per year in Hessen (ha)

Costs per year (€ x

1,000) (mean)

Afforestation coppice, forest conversion

17 – 155 137 11,834

Planting of trees/woodland

orchard, scrub patches, hedge, field trees, pollarded trees

8 – 93 286 14,491

Grassland creation (seeding) / succession area

meadow, wetland 1 – 168 233 19,730


rivers, lakes, temporary ponds

36 – 172 204 21,259

Restoration /maintenance

removal of soil sealing

177 186 33,055

Total area of compensation

1,047 100,369 (95 per ha)


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Box 14-2 The costs of mitigation and offsetting measures for the CNM railway line in France

The building of the railway line is a €2 billion project, with a budget for offsets of €30 million (1.5% of the total project costs). It is currently being built and has a footprint of 700 ha.

Studies to prepare permit applications related to biodiversity totalled about €500,000 (contracted) and 3 to 4 FTE over 18 months on their side. In total, it was estimated that field surveys totalled 1,000 man-days prior to getting permits. A PhD was also funded to feed into their baseline assessment and impact assessment. The total cost was €250,000.

Since construction began, 6 FTE staff are in charge of overseeing the implementation of mitigation and offset measures (including subcontractors, such as the local land trust NGO).

As of April 2015, offsets included:

8 ha of woodland (planted), on public land (no purchase)

136 ha of Mediterranean shrubland purchased for €500,000 (approx. €3,600 per ha)

512 ha of farmland purchased to be converted to favourable land-cover and management, for €6.3 million; average price was €12,500 per ha (fallow land was between €9,000 and €11,000 per ha; orchards ranged between €14,000 and €16,000 per ha; vineyards ranged between €13,000 and €18,000 per ha)

Offsets also include 1,200 ha under contract with farmers, in over 500 patches, with 100 farmers (average contract is for 11.6 ha).

At this stage, estimates are that land purchases will represent 25% of the total cost of their offsets over the 25 years that they will manage them. The budget for contracts with farmers represent €12 million (43% of the total offset budget).

Finding farmers can be costly. In 2013, approximately 10 information meetings were held, and 200 candidate farmers were identified through an interest form. Additional interest led to 263 farmers being identified as potential candidates for offsets. The staff time dedicated to this is included in the numbers above.

Examples from other countries taken from Conway et al:

Estimates of the average (capitalised) costs of offsets in England ranged from €30,000 to €60,000 per ha (include the costs of land purchase, habitat creation/restoration, on-going management costs and administrative and transaction costs), with the lowest costs being for upland habitats and the highest ones for wetlands (Rayment et al, 2011).

In the Netherlands, the costs of habitat restoration projects are estimated to average €20,000 per ha, but the costs of acquiring land can be very high, at up to €200,000 per ha. Costs for nature compensation normally amount to about 1% (or lower) of the total costs of a project (mainly road and rail projects). However, the Rotterdam harbour extension involved much higher costs than this.

In Sweden, a 500 ha wetland creation and restoration project in the Umeälven delta, cost €25,000 per ha, including the costs of land, planning, habitat restoration and management, and creation of a fund for long time management and monitoring.


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According to these examples overall offsetting costs appear to typically range from about €20,000 to €60,000 per ha, but can be over €100,000 per ha. The wide range of offsetting costs results from a number of factors, including:

the specific habitat types (and any particular species) that are to be the focus of the offset;

whether habitat restoration, re-creation or creation is required;

the type and condition of the existing habitat present in the offset site;

land prices, if the land is to be purchased, or rental / contracts costs if not;

the ambition of the offset objectives (eg in terms of habitat quality and resilience);

the need for ongoing management and monitoring; and

the need for insurance or financial guarantees.

Given the very wide range of overall offsetting costs and their context-specific nature, it is rather inappropriate to attempt to base offset cost projections on these generic data. This study has therefore estimated the costs of offsetting under Of 2 on the basis of a breakdown of offsetting costs according to its components, as set out below.

The estimated costs of the offsetting options

Biodiversity offsetting involves a variety of different costs for developers and regulatory authorities, the most important of which are:

Land costs - the costs of acquiring the land on which the conservation activity is to take place, or entering into an agreement to use it for offsetting (eg by providing compensation for income forgone). In theory these costs will incorporate the opportunity costs that arise from the land purchase / rental and offsetting agreement.

Habitat costs, which include:

o the one-off costs of initial habitat restoration, re-creation or creation; and

o long-term annual habitat management activities.

Financial costs - the costs of financing biodiversity offsets, as well as the costs of insurance. Financing costs may be significant for habitat banking schemes, which require up-front capital investments that are only recouped over a period of years as credits are released to the market based on performance milestones, which sometimes take many years to achieve. Other annual costs may include financial guarantees and/ or insurance to cover the risk of the offset failing.

Transaction costs incurred by the developer in meeting the requirements of the policy, by the provider in managing the provision of offsets and habitat banks and by providers and brokers in organising transactions. These include


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the time, fees and expenses related to applications, project management, management planning, certification, administration, monitoring and reporting.

Public administrative costs - The costs incurred by the authorities in administering and regulating the offsets system, which may or may not be reclaimed through fees paid by developers and/or providers. These may include the costs of receiving, assessing and granting applications, advising on requirements, conducting site visits, undertaking scientific assessments, issuing permits, dealing with disputes or complaints, maintaining records and inventories, enforcing any requirements, and undertaking on-going monitoring and evaluation.

Readily available evidence of these costs is currently insufficient and too unrepresentative to provide reliable estimates of the average EU costs of all these components. Expert judgement has therefore been used to identify typical costs of these offsetting activities as summarised in Table 14-7 below (but not opportunity costs due to inadequate information being available). Key evidence includes a database of EU ecosystem restoration costs (such as from Rural Development Programme agri-environment schemes) developed for a European Commission study of the costs of meeting the EU Biodiversity Strategy restoration target (Tucker et al, 2013), and offsetting cost data obtained by this study from Germany (see Table 14-6 and Annex 4) and France (see Annex 5) including the two examples summarised in Box 14-1 and Box 14-2 above. It should be noted that much of the cost data come from studies and agri-environment schemes that are typically 3-10 years old. However, although the likely changes in costs and impacts of inflation over the next 15 years to 2030 is difficult to predict, it is unlikely that the changes will be of the same order of magnitude of variation as other factors that influence offsetting costs. Therefore, all costs presented below are in real terms with no adjustment for inflation, and the same unit costs are used for each year up to 2030.

The range of available data indicate that there are large cost variations, although very high outlying costs of habitat creation are not included if they are thought to be unrealistic for offsetting. This is because there is normally a number of options for achieving NNL by offsetting (e.g. in terms of location and habitat to be created) so the most expensive options will normally be avoided. On the other hand, it is not normally possible to opt for the cheapest option, as offsets normally need to be close to the impact site and other exchange rules etc. will constrain options. The appropriate maximum offsetting cost is therefore particularly difficult to set without better data.


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Table 14-7 Typical costs of the key components of offsetting

Cost component Lowest observed

costs Typical costs Highest realistic costs

One-off habitat restoration / creation costs (€/ha)

SN grassland etc 300 1,200 25,000

Forest – restoration & creation

1,000 5,000 14,000

Wetland creation 375 5,000 93,000

Water body creation 5,000 30,000 60,000

Coastal habitat creation

200 1,000 71,000

Annual habitat management costs (€/ha/y)

SN grassland etc 80 350 1,500

Forest 100 450 1,000

Wetland 75 400 1,800

Water bodies 0 150 500

Coastal habitat 0 200 500

Source: see text

The costing assumes that offsets will normally be delivered through long-term management agreements with landowners rather than through the purchase of land. This appears to be common practice in the EU, perhaps because, as indicated by Rayment et al (2011), land purchase is often a more expensive option than entering management agreements, at least in the short-term. Furthermore, there is no readily available information on the proportion of offsetting that is carried out through land purchase, or on state owned land where there are equivalent opportunities costs from foregoing the potential sale of the land.

From the available evidence it is difficult to separate out land costs that are related to foregone profits (i.e. opportunity costs) that result from the delivery of the offset, from the overall costs of land management agreements such as in agri-environment schemes. This is because such schemes typically base their payment rates on income foregone, plus management costs and transactions costs. Furthermore, few studies provide information on ongoing management costs, and instead tend to focus on the capital costs of practical habitat restoration and creation activities. Therefore, the cost estimates assume that land costs are subsumed within the cost of ongoing management agreements. Management costs are not considered to be required for coastal habitats (or will be unusual and/or negligible).

In the absence of direct information, Rayment et al (2011) estimated offsetting transaction costs and public administration costs indirectly by examining such costs in relation to the establishment of agri-environment schemes and the delivery of habitat restoration projects by the Royal Society for the Protection of Birds (a conservation NGO) and the Environment Agency (a UK environmental authority). From this they concluded that transaction costs (including site selection, management planning, project management and monitoring) are likely to add about


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30% to the cost of the habitat works, and public administration costs are likely to be about 10% of cost of the works. Evidence from offsetting in Germany set out in Annex 4 indicates that offsetting administration costs of the authorities most involved in the process (i.e. nature conservation and roads authorities) are about 2.4% to 3.4%. Therefore, although the additional administration costs of some other authorities, would increase this total a little, it seems that the 10% figure used by Rayment et al may be an overestimate. However, it is important to bear in mind that offsetting has been a common practice in Germany for several decades and therefore efficient administration procedures have probably been established. In contrast the offsetting measures considered here would require the establishment of new admiration procedures (including training in them etc) for offsetting in most EU countries. Therefore, in the absence of more detailed information, the estimates by Rayment et al of 30% transaction costs and 10% administration costs are used in this study. Information on the likely costs of financing are not readily available, but this component is expected to be very small. It is therefore assumed that financing costs would be 1% of the costs of the works.

The estimated costs set out in Table 14-8 are based on the typical costs included in Table 14-7 and described above combined with the modelled projections of EU habitat change (based on the NNL Policy Options Study BaU scenario) and demand for offsetting under Of 2 scenarios A and B in Table 14-2. For comparison purposes the costs are also related to offsetting under the BaU scenario.

Table 14-8 Summary of total estimated EU costs to 2030 of offsetting under the BaU Scenario and offsetting policy option 2

Cost component BaU Scenario

(€ million) Of 2 – Scenario A

(€ million) Of 2 – Scenario B

(€ million)

Scenario offsetting assumptions

1% of all EU built development is offset

2.5% of all EU built development is offset

5% of all EU built development is offset

Habitat creation costs (total one-off)

202 505 1,010

Habitat management costs (aggregate to 2030)

223 557 1,113

Financial costs (to 2030) 4 11 21

Transaction costs (to 2030)

127 319 637

TOTAL DEVELOPER COSTS

556 1,391 2,782

Administrative costs 42 106 212

Source: See Annex 3.2 for detailed calculations

By comparison, Table 14-9 indicates the potential costs of offsetting if the typical range of all-inclusive general costs of offsets of €20,000 to €60,000 per ha, which generally apply over 30 years (see above), are multiplied by the amount of land that would require offsets for developments between 2015 to 2020 according to each of the scenarios (see Table 14-2). As discussed above such overall general costs are rather crude, and it is not possible to separate out the one-off restoration / creation


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and administration costs from the ongoing management costs. Thus it is not strictly correct to adjust them to the expected 2018 – 2030 delivery period by simple division. Nevertheless, the calculation provides a means of cross checking the order of magnitude of offsetting costs with the more detailed costing methods used in this study. In this respect there is a high degree of concordance as the each of the scenario costs in Table 14-8 falls between each of the scenario cost ranges in Table 14-9.

Table 14-9 Total estimated EU costs (€ million) to 2030 of offsetting under each scenario based on general overall per ha offsetting costs

Note: this is based on typical overall offsetting costs of €20,000 to €60,000 per ha (see text above) assuming costs are over 30 years, and offsetting requirements for 2015-2020 are delivered on average by 2018 leaving 12 years of ongoing costs Estimates are based on current costs and no discounting is applied.

Offset scenario Offsetting

requirements for 2015-2020 (ha)

Total cost of offsetting (€ million) to 2030

Overall offsetting cost €8,000 / ha / yr

Overall offsetting cost €24,000 / ha / yr

BaU offset area England 41,623 333 999

Of 2 - scenario A offset area 104,058 832 2,497

Of 2 - scenario B offset area 208,117 1,665 4,995

Table 14-10 provides an indication of the potential impacts of variation in each of the offsetting cost components on the overall cost of offsetting. This indicates that if both the habitat restoration / creation and management costs of offsetting were at the lowest end of the range indicted in Table 14-7 then total costs would be 21% of the typical costs set out in Table 14-8. If they were based on the upper range of such costs then they would be 262% of typical costs. Thus according to these percentage variations, total private offsetting costs from 2015-2030 under Scenario A could range from €295 million to €3,644 million, and Scenario B costs could range from €589 million to €7,287 million.

Table 14-10 The effects of variation in the costs of offsetting components on the total costs of offsetting policy option 2 under both scenarios compared to typical costs in Table 14-7

% change compared to typical costs

Offsetting component Low cost

estimates High cost

estimates

Habitat restoration / creation costs combined for all types 20% 299%

Habitat management costs (to 2030) combined 22% 229%

Habitat restoration / creation and management costs 21% 262%


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The costs of offsetting in relation to total development project costs

By comparing the range of 2015-2030 costs in Table 14-8 and extrapolating the estimated total cost of EU funded development projects for 2014-2020 of €123 billion (from section 14.1.1) to 2030, i.e. €299 billion (assuming a similar annual spend at current prices) it appears that private offsetting costs would be:

0.19% of total EU funded development project costs under the BaU scenario,

0.47% under Of 2 – scenario A (i.e. with 50% uptake) and

0.93% under Of 2 - scenario B (i.e. with 100% uptake).

As a comparison, data are presented below on the proportion of total project costs that mitigation and offsetting makes up when it is carried out. Cost data collected for this study from projects with adequate comparable data from Provence – Alpes - Côte d’Azur region in France (Table 14-11) indicate that within the region the median percentage of total project costs attributed to mitigation and offsetting measures was 2.34%, although for two of the 24 projects they were over 20%. However, the proportional cost of mitigation and offsetting typically declines as project size increases, and therefore the weighted mean % is much lower, equalling 1.06%. Annex 5 provides further details of the projects marked with an asterisk.

Table 14-11 The costs of mitigation and offset measures in relation to project costs in the Provence – Alpes - Côte d’Azur region of France

See Annex 5 for details of projects marked with *

Project Year Predicted

project total cost (€ x 1,000)

Predicted mitigation and offsetting costs

measures cost (€ x 1,000)

Predicted mitigation and

offsetting measures costs

vs. predicted project total

cost (%)

1* Road enlargement 2012 33,000 – 34,000 772 - 779 2.34

3 Subdivision construction 2012 5,601 – 5,602 1,454 – 1,456 25.96

4 Joint development zone construction

2014 4,056 – 4,066 496 - 506 12.23

5* Road construction 2014 61,000 51 - 52 0.08

7* Construction of a solar farm 2010 40,000 100 – 126 0.25

8* Joint development zone construction

2009 45,000 881 - 900 1.96

9 Micro-hydropower dam construction

2010 5,100 120 - 140 2.35

10 Security protection of cliffs 2010 12,900 – 13,000 22 - 23 0.17

11* Construction of a building 2010 38,000 – 39,000 450 - 451 1.18

12* Restoration of a riverbed through sediment reload

2013 4,721 – 5,647 225 - 226 4.77

13 Dredging of a reservoir 2010 6,000 121 -122 2.02

14* Installation of buried pipelines 2010 70,000 4,590 – 4,600 6.56

15 Draining and dredging of a reservoir

2014 285 31 -33 10.88

16 Construction of a terrestrial wind farm

? 40,000 400 - 490 1

17 Construction of a building 2012 12,900 1,215 – 1,230 9.42


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Project Year Predicted

project total cost (€ x 1,000)

Predicted mitigation and offsetting costs

measures cost (€ x 1,000)

Predicted mitigation and

offsetting measures costs

vs. predicted project total

cost (%)

18* Restoration of an old building ? 1,070 62 - 63 5.79

19* Construction of a building 2008 28,100 945 3.36

20 Construction of a motorway 2015 12,000 – 17,000 100 – 150 0.83

21* Construction of a motorway interchange

2015 3,000 – 3,200 120 - 150 4

22 Ecological restoration of a river branch

2015 735,650 0 – 100 0

23 Construction of a motorway rest area

2012 58,371 – 58,372 450 – 451 0.77

24* Security protection of cliffs 2014 999 – 1,000 212 - 217 21.22

Mean 5.3

Median 2.3

Weighted mean 1.1

Source: ERMAN Database, DREAL PACA, see Annex 5

The analysis of costs of offsetting in Germany carried out for this project calculated that the costs of offsetting impacts from residential and non-residential buildings were about 3.5%, or 2.9% if the associated costs of underground engineering are included (see Annex 4 for details of the calculation). Previously the costs of offsetting road projects have been estimated to be about 5% of total project costs (Germany case study in the NNL Policy Options Study). According to Conway et al, (2013) examples of the cost of compensatory measures of projects in Spain (such as the development of the Madrid-Barajas airport or projects for the development of the rail network) represented between 1.8% and 4.5% of the total cost of the project.

Thus there is good evidence from a variety of sources that although the costs of offsetting can be substantial in some cases, they are normally less than 5% of total project costs and often significantly lower. The evidence also indicates that the costs estimated in this study are comparable to those found in other studies in relation to their proportion of total project costs, albeit rather lower. This corroborates to some extent the method and data used to calculate offsetting costs.

Potential costs savings

It is important to bear in mind that the above estimates of offsetting costs under Of 2 are based on the assumption that the amount of development would be as if under the BaU. But, as discussed in the causal chain of impacts section (14.1.2), in reality the addition of the offsetting requirements and associated costs would be an incentive for developers to further avoid and reduce biodiversity impacts and thereby reduce offsetting costs, where offsetting proves more expensive than the costs of avoidance, mitigation and onsite restoration. Thus, in response to these economic signals, the actual amount of offsetting and its costs would probably be lower than estimated here. Another factor to consider is to what extent spreading the costs of offsetting along the value chain (in particular passing these costs to


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landowners of development plots) may reduce the incentive for the developer to avoid and mitigate biodiversity impacts.

The increased demand for offsetting might also be expected to stimulate the creation of a market for offsets and the development of a significant habitat banking industry in response. This would be expected to reduce costs due to competition, learning and economies of scale (eftec and IEEP, 2010), but it is not possible to estimate such potential savings at this stage. Also, if habitat banks were able to provide habitats in advance, then the required offset area would be reduced because risk and time preference multipliers for the offset would be lower. This could lead to substantial reductions in offsetting costs.

Furthermore, although the higher offsetting standards that would be developed under Of 1 (and followed in Of 2), would be expected to result in higher offsetting costs for project proponents (see above) these impacts might be compensated for to some extent by improved certainty and reduced project delays. Project delays can be very costly, and the economic benefits of reduced delays and increased certainty might outweigh the relatively small additional offsetting costs that are likely under Of 1. However, there is currently insufficient information available to assess this further.

Social

As measures Of 1 and Of 2 would affect a variety of development projects (e.g. housing, industry and infrastructure) their social impacts could be wide ranging, benefiting those that may be impacted by the projects as well as society as a whole. Such benefits could be in the form of avoided impacts of developments that are relocated to minimise biodiversity and ecosystem service impacts to minimise offsetting liabilities and costs – i.e. through the deterrent effect. But it's important to note that offsetting could have the reverse effect if it is weak and undermines the mitigation hierarchy by allow developments to go ahead that would not otherwise do so.

Where projects do go ahead and require offsetting then social benefits would arise from the achievement of NNL of biodiversity and associated ecosystems services, such as areas for recreation, research and education, and relaxation, as well as less utilitarian benefits relating to spiritual, ethical and existence values. However, it is important to ensure that offsetting is equitable, such that those that lose desired ecosystems services are the beneficiaries of offsets. Particular care needs to be taken in relation to habitat banking, as the benefits of enhancing higher value biodiversity away from a project site needs to be carefully balanced against the risk of driving nature and ecosystem services away from areas under high development pressure, and thus away from the people living in such areas. There is evidence that this occurred in the USA as a result of wetland mitigation banking (Ruhl and Salzman, 2006).

Offsets can also take time to become established and provide their biodiversity and ecosystems benefits, and therefore there can be significant temporary social impacts. Such temporary impacts will vary considerably depending on the


277

biodiversity impacts and ecosystem services impacts and the form of the offset. Some habitats can be created quickly (such as some waterbodies, wetlands and grasslands) and although their biodiversity value may take many more years to develop they may immediately provide some key ecosystem services, such as open green space for recreation; in which case temporary social impacts will be minimal if the offset is provided before or at the same time as the impact. Temporary impacts are likely to be most significant for habitats that are slow to develop and provide most of their social value when mature, such as forests. However, in some circumstances some social impacts can be avoided or reduced by providing new access to previously inaccessible areas of existing habitat that already have the potential to meet social needs, such as areas for recreation. Biodiversity impacts may then be offset elsewhere through habitat restoration or creation.

Social benefits would arise from employment opportunities associated with offsetting. These would include the creation of additional jobs in the development sector itself, as many offsets are delivered by them, especially in large companies (such as in the extraction industry) and some public authorities (e.g. for transport) and third parties such as consultants who often advise on the design of offsets and oversee their delivery. As discussed below, an increase in the capacity of planning and nature conservation authorities would be needed.

The offsets themselves may also lead to economic benefits, and in turn social impacts for landowners, who are contracted to undertake the offset (or who may sell their land to offset providers or habitat banks). Information on such benefits is insufficient to quantify their impacts, but they could be significant in some rural locations, especially where unprofitable farmland of low biodiversity value is converted to high biodiversity value habitats at a large scale, such as in habitat banks. In such cases additional social benefits may arise from increases in recreation and nature-based tourism that could in turn support other jobs with wider rural socio economic impacts.

Governance

Of 1 aims to ensure clear and consistent standards for offsetting are developed and promoted, and would therefore contribute greatly to increasing EU NNL policy clarity, and feasibility, as well as supporting wider EU policy coherence. In particular it would support the SEA and EIA processes and provide a clear endpoint for biodiversity proofing to aim for.

Although it would be a voluntary measure for Member States to adopt as they consider appropriate there is some reason to think that it would be widely adopted as a result of its governance benefits, i.e. in terms of providing consistent and clear standards that would aid decision making and help to create a level playing field in terms of competition amongst businesses that impact on biodiversity.

The practicality of both offsetting measures is high for most offsetting situations, given that there is now good knowledge of required restoration measures and management for most habitats for which offsetting is appropriate. However,


278

international experience on offsetting (as for example reviewed in the NNL Policy Options Study) shows that the enforcement of standards under Of 1 and required offsetting to achieve NNL for EU projects would require a considerable increase in capacity in planning authorities and nature conservation agencies in terms of numbers of personnel and knowledge of offsetting). To be effective and guard against risks to biodiversity, offsetting needs to include the provision of necessary guidance, awareness raising, training, processing of offset proposals, compliance monitoring, reporting, and the enforcement actions necessary to achieve the objectives over the long-term.

The German Case study set out in Annex 4, provides information on the demands placed of the nature conservation authorities and roads authorities in overseeing offsetting projects and their staff requirements and costs. This indicates that some consultees consider that staffing levels are inadequate, which results in some administrative problems and low levels of offset monitoring and enforcement. But it should be borne in mind that in Germany there is mandatory offsetting of all significant impacts, whereas this measure would focus on EU funded projects (which we estimate comprises about 5% of EU construction developments). Similarly, governance issues and inadequate institutional capacity seems to be limiting the effectiveness offsetting in France (Quétier et al, 2014).


The tables below summarises the findings for the offsetting measures. From the available evidence it is clear that some form of offsetting is required to achieve the NNL target, as it is not possible to eliminate all residual impacts through instruments that concentrate on avoidance and reduction measures. However, at the same time there are demonstrated risks from offsetting and poorly devised and weakly enforced offsetting could be counter-productive (e.g. by weakening protection levels where some protection exists, whilst also failing to achieve NNL through offsets). Therefore the development of an EU offsetting framework under Of 1 that would set out key principles and consistent standards is an essential precursor for any further offsetting measure. Furthermore, given that some offsetting is being carried out in the EU, and some Member States (e.g. the UK) are considering developing some form of offsetting scheme (whether voluntary or mandatory) it would seem timely to develop an EU framework. Its costs would be low and it would be able to build on the results of several Commission studies and the recommendations of the NNL Working Group, and other bodies such as BBOP.

The impacts of Of 2 would largely depend on its uptake by Member States as it has been treated as a voluntary measure in this study. Although it was proposed in the NNL Policy Options Study as a mandatory measure for EU funded projects, this would require legislative changes to the EU funding instrument regulations, which is no longer feasible before the 2020 reforms. Nevertheless, if Member States chose to apply offsetting under the Of 1 framework to 50% of EU funded projects, as assumed in this study (i.e. Scenario A), or more, it would make a significant contribution towards achieving the NNL goal.


279

As the offsetting measures would affect a variety of development projects they would have wide ranging economic and social impacts, potentially benefiting society as a whole and those that are directly impacted by the projects that require the offsets, provide that those that lose desired ecosystems services are the beneficiaries of offsets. The economic values of ecosystem service related benefits from the offsetting are highly uncertain as TEV estimates for all the habitat types affected are currently very scarce. However, the available data suggests that economic benefits are close to or slightly greater than the totals costs of offsetting.

Others that may benefit from offsets would be offset providers, including (landowners) and those that are involved in the brokering, design, supervision and monitoring of offsets (e.g. environmental consultants, and land agents) and the practical works (e.g. farmers, foresters, landscapers/engineers). Thus, offsetting would be expected to stimulate an increase in a range of jobs.

The proponents of the projects that require the offsets (i.e. public authorities and businesses) would be subject to additional costs, particularly as a result of option Of 2. Whilst the costs of the offsetting measures are potentially substantial, there is good evidence that they are normally a relatively small proportion of the total costs of the associated development project. Across the EU the total costs of offsetting under both Of 2 scenarios would be a fraction of a percentage of the overall turnover of the construction industry as a whole. Furthermore, the development of a consistent offsetting policy framework under Of 1 could help to improve the reliability of offsetting and its public acceptability, whilst also enabling businesses to forecast and quantify biodiversity impacts and associated offsetting costs. This could in turn help businesses to plan and budget for offsetting, thereby helping to manage biodiversity and ecosystem service related impacts and avoiding associated project permitting delays.


280

Table 14-12 Summary of costs and benefits of measures

Option Estimated costs Who will be affected by increased

costs Estimated benefits Who will benefit


Developing and agreeing the framework and standards

Costs for guidance and training for authorities and developers – but will fall with time

Authority staff for advising developers, offset permitting monitoring and enforcement

Increased costs for developers associated with strengthened offset requirements (eg as a result of higher offset ratios) – cannot be quantified, but 2015-2020 offsetting requirements likely to be 10’s of millions Euro to 2030

European Commission and Member States authorities

Planning and nature conservation authorities

Developers

Increased certainty on acceptable offsets, leading to project fewer delays and associated opportunity costs

Increased scope for engagement between developers, authorities and stakeholders

Creation and management of habitat eg in rural areas

Biodiversity and related ecosystem services, particularly through creation of semi-natural habitats and forests, and possible added benefits of increased habitat viability and connectivity for existing habitats

Society as a whole benefits through the safeguard of valuable ecosystem services and improved application of the mitigation hierarchy and polluter pays principle

Developers from greater clarity of offset requirements, so can adjust development plans accordingly

Offset providers, including land owners and those carrying habitat and management works (landowner or third party), eg farmers, nature conservation organisations & consultants/contractors

Of 2: EU Framework to promote offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem services

As above, but 2015-2020 impacts costing approximately 10 billion to 2030 IF mandatory offsetting is introduce by MS such that it covers 50% of EU funded development projects

As above

As above, but with substantial benefits, particularly if offsets are strategically located and pooled (eg through habitat banks)

As above


281

Table 14-13 Overview of potential impacts of options associated with offsetting


↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗↗ - ↘ ↘↘ ↘↘↘ ↘↘↘↘ ↘↘↘↘↘

Impact criteria

Business as Usual Offsetting


Of1 Of1 &

Of2

incremental benefit






↗↗ ↗↗↗

Enforcing the mitigation hierarchy Principle broadly committed to, but not

fully implemented ↗↗↗ ↗↗↗






↗↗ ↗↗↗






↗↗ ↗↗↗-

↗↗↗↗


282



↘↘ ↘↘↘

Financial costs (one-off) ↘↘ ↘↘↘

Financial costs (recurrent) ↘↘ ↘↘↘

Opportunity costs (uncompensated) ↘-↗ ↘-↗




Number / quality of jobs generated No baseline estimated on jobs ↗↗ ↗↗↗


Access to nature variable, and affected by overall loss of biodiversity, but range of

efforts to increase access underway across the EU. Insufficiency for certain

communities.

↗↗ ↗↗↗


Loss of biodiversity and significant erosion of ESS widespread across the EU will

persist for future generations - raising equity concerns.

↗↗ ↗↗↗




Clarity


↗↗↗↗ ↗↗↗↗

Measurability ↗↗↗ ↗↗↗

Practicability / Feasibility ↗↗↗ ↗↗↗

Enforceability - -

Coherence with SD and other policies ↗↗↗ ↗↗↗


283







4: Subsidiari

ty

A: B&H directives

B: Wider policies & tools

A: Evidence

based policy

making

B: Guidance

for implement

ation


x x X X

Of 2: EU Framework with encouragement for offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem services

X X x


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15 SYNTHESIS OF IMPACTS ON THE NO NET LOSS OBJECTIVE

The assessment of the selected measures to address the NNL objective looked at 18 policy options in relation to 10 instruments. This section presents a summary of the assessment –looking at the merits of each individual instrument and option on its own (section 15.1) and in the context of the links and interconnections between the instruments, their complementarity and wider relevance to EU policy (section 15.2). Section 15.3 presents a short overarching summary.

15.1 Summary assessment of the individual NNL Measures and Instruments

The policy options and instruments were assessed against 16 environmental, social, economic and governance criteria as well as their potential contribution to the overarching objective of NNL (for details on the criteria, see chapter 15). Table 15.1 presents a qualitative summary of the assessment of all the options and instruments across the criteria. Despite some uncertainties, it can be reliably predicted that all of the instruments and policy options that were assessed have the potential to provide benefits for biodiversity and ecosystem services, and thereby contribute towards meeting the NNL objective. However, there is a considerable range of potential benefits, ranging from minor to substantial. The study has revealed that the potential range and magnitude of impacts from the NNL policy options will depend on their detailed design, the level of their implementation and their combined synergies. In particular there is considerable uncertainty over the potential take up of voluntary measures. To be effective and efficient, many options will also require a considerable investment in additional capacity and knowledge (e.g. in environmental authorities) and this may not materialise in circumstances where funding is limited. Furthermore, data gaps (such as on the economic value of ecosystem services), constrained the assessment of all the measures to some degree.

The largest benefits are expected from measures linked to legal instruments such as the Birds and Habitats Directive options (BHD 1 & 2), and EIA and the combined ELD measures and offsetting measures. The spatial planning and the biodiversity proofing options can be very effective in terms of avoiding and reducing biodiversity impacts, promoting policy coherence and supporting offsetting where needed to ensure NNL of biodiversity. The main caveats related to these options arise from their voluntary nature and the uncertainty of their uptake.

Some of the policy options are particularly important at supporting the NNL mitigation hierarchy (i.e. deterrence and avoidance, before restoration and offsetting), including BHD 1, EIA 3, FP 2. The two offsetting options, Of 1 &2 would also be expected to avoid and reduce impacts through their deterrence effects, provided that the Of 1 framework is designed and implemented according to the mitigation hierarchy and other best practice principles (see chapter 14 for related discussion).

While the NNL policy options would offer significant incremental improvements, the overall baseline trend of EU biodiversity and ecosystem service loss would not, however, be halted by the combined measures. In order to fully achieve the NNL objective, further post-2020 measures will need to be considered and a wide range of other EU and national policies would need to be fully implemented. Particular effort will be required to improve the coherence between biodiversity and other policies, via better integration of biodiversity


285

issues in policies, funding and implementation. In addition, changes to business and citizen decisions would be needed for the overarching NNL objective to be met.

Such measures would help to avoid and reduce impacts, but residual impacts would still be inevitable. Other measures not considered here, such as restoration of degraded land under Target 2 of the biodiversity strategy and proactive investments in Green Infrastructure have the potential to provide pockets of net positive gain (i.e. local success in meeting NNL) and thereby contribute to the overall NNL objective by compensating to some extent for losses elsewhere. However, mandatory offsetting with a wider scope than considered in this study (i.e. including coverage of agriculture, forestry and marine impacts) would be required to achieve the NNL objective, and the headline target of halting biodiversity loss by 2020.

On administrative and financial costs, the measures would lead to a range of different types and scale of costs, from the arguably relatively minor (e.g. millions of Euro across the EU as a whole) – expected for the ELD, CAP, spatial planning, MBI and biodiversity proofing tools - to quite substantial costs (hundreds of millions of EUR) – expected for Birds and Habitats (especially the one-off costs of compensation) and forest policy options - and, in the case of offsetting for EU funded projects, potentially leading to expenditure in the order of billions of Euros if implemented thoroughly. The cost-effectiveness of those options would then depend on the implementation choices for the instrument. Furthermore, the costs are not simply “costs”, as the measures will lead to both the above-mentioned biodiversity benefits, and also the benefits from the maintenance of flow of ecosystem services from the avoided loss of natural capital. These have been estimated to potentially range from minor contributions, to very substantial contributions (from Birds and Habitats options as well as the offsetting measures and the combined ELD package). For policy options (individually and in combination under each instrument), except under forest policy, the economic value of their benefits is expected to be of the same order of magnitude or greater than their estimated potential recurring costs.

As regards opportunity costs, the assessment concludes that these additional costs are expected to be minor or small for most of the measures looked at, with the exception of the combined Birds and Habitats Directive options, where they are expected to be significant. But in many cases private opportunity costs from restrictions on land management could be compensated for from public funds, such as the Natura 2000 measures (from Natura 2000 sites) and/or agri-environments under RDPs. The offsetting measures would create opportunity costs for some, but also opportunities for others as it would develop a market for restoration.

As regards social impacts, the assessment looked at the number and quality of jobs generated or supported, access to nature with associated health and quality of life benefits, and equity issues. This provided a generally positive evaluation as the measures would be expected to improve the level of access to nature, and the amount of biodiversity left for future generations (though this would still decline overall). There would naturally be significant variations across countries, regions and cities, depending on the pressures on nature, the NNL measures assessed here and own measures, some catalysed by EU policy and funding. The instrument assessment, building on the literature on green jobs and case examples, indicates generally positive expectations for job creation across the measures, though with one particular exception, notably regarding the ELD related measures, as


286

strengthening liability measures would probably constrain short-term jobs. There are arguments that over the long-term ELD measures could support jobs, but there is no evidence to substantiate this.

On the governance assessment, this looked at a mix of criteria: the clarity of the measure, its measurability, practicability and feasibility, enforceability and coherence with sustainable development and other policies. Overall the set of policy options were considered to lead to substantial improvements across the criteria, though with variations across options and instruments as seen in Table 15-1.

While all the instruments have their merits and would contribute to the NNL objectives, the level of added value of the instruments and measures varies considerably, and there are some that are arguably more of a priority than others. Table 15-2 presents a first synthesis as to whether the instruments should be considered for prioritised support. The table focuses on two particular criteria:

The measure’s contribution to the NNL objectives (i.e. halting biodiversity and ecosystem services losses, while at the same time supporting the mitigation hierarchy).

The overall net benefits (or costs) of the measure, amalgamating the range of social, economic and environmental costs and benefits noted above.

Given the complexity of the issues considered in Table 15-1 (e.g. the varying levels of certainty in the assessment of each criterion, their importance and independence) the overall assessments made in Table 15.2 are not simply based on score aggregations. Instead, whilst they take into account the scores, they are based on more nuanced judgements by the project team that also consider the overall weight of evidence and its meaning in relation to each policy measure. Table 15-3 further explains the key reasons for the measures being seen as priority instruments to support NNL.


287

Table 15-1: Summary of Evaluation of Instruments and measures against the criteria

Business as Usual EIASpatial

Planning

Biodiversity

Proofing

BHD1 BHD2 Comb-ined ELD 1 ELD 2 ELD 3Comb-

inedEIA3 SEA1 SEA2

Comb-

inedSP1 BP1 CAP 1 CAP 6

Comb-

inedFP1 FP2

Comb-

inedMBI 1 MBI 2 Comb-ined Of1 Of1 & Of2

Addressing the problem/challenge -

biodiversity & ESS loss (i .e. wrt BD in EU)

and contributing to NNL / net positive

gain

Significant biodiversity and

ecosystem service loss ongoing - i.e.

Net Loss

↗↗↗ ↗↗↗ ↗↗↗ ↗ ↗ ↗↗ ↗↗↗ ↗↗ ↗ ↗↗ ↗↗ ↗ ↗ ↗ ↗↗ ↗↗ ↗ ↗-↗↗ ↗-↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗↗ ↗↗↗

Overall still overall loss of BD and ecosystem services

despite the fact that each of the various measures

contribute incremental gains. Overall still Net Loss of

biodiversity.


not fully implemented↗↗↗ ↗ ↗↗↗ ↗ ↗ ↗↗ ↗↗ ↗↗↗ ↗ ↗↗↗ ↗↗↗ ↗ ↗↗ ↗ ↗ ↗↗ ↗↗ ↗↗↗ ↗↗↗ ↗ ↗ ↗ ↗↗↗ ↗↗↗ ↗↗↗

Improving practice to support the commitment to the

NNL hierarchy principle.

Biodiversity & habitats (direct and

indirect)

Widespread and significant

Biodiversity loss↗↗↗ ↗↗↗ ↗↗↗ ↗ ↗ ↗↗ ↗↗↗ ↗↗ ↗ ↗↗ ↗↗ ↗ ↗ ↗ ↗ ↗↗ ↗ ↗-↗↗ ↗-↗↗ ↗ ↗ ↗↗ ↗↗ ↗↗↗ ↗↗↗ Some ongoing loss would remain, but less

Economic Benefits from ecosystem

services

Significant erosion of ESS widespread

across the EU↗↗ ↗↗↗ ↗↗↗ ↗↗ ↗↗ ↗↗ ↗↗↗ ↗↗ ↗ ↗↗ ↗↗ ↗↗ ↗ ↗ ↗-↗↗ ↗-↗↗ ↗ ? ? ↗↗ ↗↗ ↗↗↗ ↗↗

↗↗↗-

↗↗↗↗↗↗↗↗

Some ongoing loss of ESS, but less overall, with

increased ESS provision for some areas

Administrative costs (at EU and MS level)

(downward arrows means increased

burden)

↘↘ ↘↘↘ ↘↘↘ ↘ ↘ ↘ ↘ ↘↘ ↘ ↘↘ ↘↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘↘ ↘↘ ↘ ↘ ↘ ↘↘ ↘↘↘ ↘↘↘

Financial costs (one-off) ↘↘↘ ↘↘↘↘ ↘↘↘ ↘ ↘ ↘ ↘ ↘↘ ↘ ↘↘ ↘↘ ↘ ↘ ↘ ↘ ↘ ↘↘ ↘↘ ↘↘ ↘↘ ↘↘ ↘↘ ↘↘ ↘↘↘ ↘↘↘↘

Financial costs (recurrent) ↘↘ ↘↘↘ ↘↘↘ ↘ ↘↘ ↘↘ ↘↘ ↘↘ ↘ ↘↘ ↘↘ ↘ ↘ ↘ ↘↘ ↘↘ ↘↘↘ ↘↘↘ ↘↘↘ ↘ ↘ ↘ ↘↘ ↘↘↘ ↘↘↘

Opportunity costs (uncompensated) ↘↘ ↘ ↘↘↘ ↘ ↘ ↘ ↘ ↘↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘ ↘↘ ↘↘ ↘ ↘ ↘ ↘-↗ ↘-↗ ↘↘

Number / quality of jobs generated No baseline estimated on jobs ↗↗ ↗↗↗ ↗↗↗ ↘ ↘ ↘ ↘ ↘? ↗ ↗↗ ↗↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗ - - - ↗↗ ↗↗↗ ↗↗↗ No baseline estimated on jobs

Access to nature and Health benefits /

quality of life

Access to nature variable, and

affected by overall loss of

biodiversity, but range of efforts

to increase access underway

across the EU. Insufficiency for

certain communities.

↗↗ ↗↗↗ ↗↗↗ ↗ ↗ ↗↗ ↗↗↗ ↗↗ ↗ ↗↗ ↗↗ ↗↗ ↗ ↗ ↗ ↗ ↘ ↘↗

(2020)↗ (2020)

↗ (2020)

↗↗ (2030)↗↗ ↗↗↗ ↗↗↗

Improved access but still some losses for

certain communities

Equity and future generations (builds on

BD and ESS availability, health etc.)

Loss of biodiversity and significant

erosion of ESS widespread across the

EU will persist for future generations

- raising equity concerns.

↗↗↗ ↗↗↗ ↗↗↗ ↗ ↗ ↗↗ ↗↗↗ ↗↗ ↗ ↗↗ ↗↗ ↗↗ ↗ ↗ ↗ ↗ ↗ ↗-↗↗ ↗-↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗↗ ↗↗↗

While improved relative to baseline, still

ongoing loss for future generations as

package does not halt biodiversity loss

overall

Clarity ↗↗↗↗ ↗↗ ↗↗↗↗ ↗↗ ↗ ↗ ↗↗↗ ↗↗ ↗↗ ↗↗↗ ↗↗↗ ↗↗ ↗↗↗ ↗↗ ↗↗↗ ↗↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗↗↗ ↗↗↗↗ ↗↗↗↗

Measurability ↗↗↗ ↗↗ ↗↗↗ ↗↗ - - ↗↗ ↗ ↗ ↗ ↗ ↗ ↗ ↗↗↗ ↗↗ ↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗ ↗ ↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗

Practicability / Feasibility ↗↗ ↗↗ ↗↗ ↗↗↗ ↗↗ ↗↗ ↗↗↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗ ↗↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗ ↗↗↗ ↗↗↗ ↗↗↗↗

Enforceability ↗↗↗ ↗↗ ↗↗↗ ↗↗ ↗ - ↗↗↗ ↗ ↗↗ ↗↗ ↗↗ ↗↗ - ↗↗↗ ↗↗↗ ↗↗↗ - - - ↗↗ ↗↗↗ ↗↗↗ - - ↗↗

Coherence with SD and other policies ↗↗ ↗↗↗ ↗↗↗ ↗↗ ↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗↗ ↗↗↗↗ ↗↗↗ ↗↗↗↗ ↗↗↗ ↗↗↗ ↗↗↗↗


Incremental benefit


Impact criteria

Birds and Habitats measures




Social (Magnitude key as Environmental above) arrows indicate a detrimental change. Estimated magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change

ELD

Incremental benefit

No baseline estimated on

governance


Overall impact of the full set of measures

No baseline estimated on the

Economic and financial costs


No baseline estimated on the Economic and financial

costs


Governance (Magnitude key as Environmental above) Upwards arrows indicate a beneficial change with respect to current conditions. Downward arrows indicate a detrimental change. Est. magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change

Offsetting

Incremental benefit incremental benefitIncremental benefit

CAP

Incremental benefit

Estimated magnitude of change, ↗↗↗↗↗ = Completely meet the objective, ↗↗↗↗ = close to completely meeting the objective, ↗↗↗ = Moderate but substantial contribution, ↗↗= Small contribution, ↗ = Minor contribution (key/criteria to be defined issue by issue in the context of the assessment).


Forest Policy Options

Incremental benefit

Incremental

benefitsRelative to the Baseline: study context (BaU)

Estimated magnitude of change, ↗↗↗↗↗ = Very highly significant change, ↗↗↗↗ = High change, ↗↗↗ = Moderate but substantial change, ↗↗= Small change, ↗ = Minor change (key/criteria to be defined issue by issue in the context of the assessment)

SEA


288

Table 15-2 Summary Assessment across the instruments: NNL contributions, overall net benefits and overarching judgement

EIASpatial

Planning

Biodiversity

proofing

BHD1 BHD2 BHD1+2 ELD 1 ELD 2 ELD 3 Combined EIA3 SEA1 SEA2Combine

dSP1 BP1 CAP 1 CAP 6

Combine

dFP1 FP2 Combined MBI 1 MBI 2 Comb-ined Of1 Of1 & Of2

*** *** *** ** ** ** *** *** * ** ** * * * * * * * / ** * / ** ** ** ** ** ** / ***

*** / **** *** / **** *** / **** ** ** ** ** *** ? ? ? * * * ? ? * ? ? ** ** ** ** ** / ***

*** *** *** ** ** ** *** *** * ** ** * / ** * * ** ** * ** ** ** ** ** *** ***

--- Negative contribution to NNL --- Overall net costs --- Not recommended

Neutral Neutral Not a priority

* * * Low priority for inclusion in a suitable policy package to make progress to NNL

** ** ** Moderate priority for inclusion in a suitable policy package to make progress to NNL

*** *** ***

**** ****

***** *****

SEA CAP Forest Policy Options

Essential / high priority for inclusion in a suitable policy package to make progress to NNL

Contribution to NNL objective Overall judgement - prioritiesOverall net benefits

Minor contribution to NNL

Small contribution to NNL

High contribution to NNL

Moderate contribution to NNL

Very highly significant contribution to NNL

Minor net benefits across the criteria

Small net benefits across the criteria

Moderate net benefits across the criteria

High net benefits across the criteria

Very high net benefits across the criteria

Birds and Habitats measures ELD Market Based Instruments

Overall judgement: priorities

Overall net benefits

Contribution to NNL objective

Offsetting


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Table 15-3112Overall Judgement of added value of the NNL Measures

Key * Low priority for inclusion in a suitable policy package to make progress to NNL

--- Not recommended ** Moderate priority for inclusion in a suitable policy package to make progress to NNL

Not a priority *** Essential / high priority for inclusion in a suitable policy package to make progress to NNL

Measure Priority Reasoning - Key message Links to other instruments

Birds and Habitats measures

BHD 1 *** Would strengthen application of Articles 6(3) and 6(4) of HD, with potential for significant benefits at

moderate cost

Important links with EIA and SEA processes. Includes offsetting/

compensation measures for N2K sites.

BHD 2 *** Potential to greatly enhance coherence and resilience of ecological networks, providing large benefits at

relatively high cost

SP plays important role in defining and implementing ecological networks.

SEA & EIA important for implementation. CAP & forestry

measures contribute to management of ecological networks.

BHD 1+2 *** Would increase overall robustness, coherence and resilience of Natura 2000 network, helping to prevent

gradual erosion of the very substantial benefits network delivers

ELD

ELD 1 **

Inconsistencies in implementation, and under implementation, evidence on net benefits of cases and benefits of deterrence, potential synergies with other instruments (e.g. EIA), plus low cost of measures,

suggest guidance and information would be a useful policy measure.

Necessary part of harmonising biodiversity metrics across instruments

ELD 2 ** Evidence of under implementation, net benefits of cases and benefits of deterrence, plus low cost of

measures, suggest lowering damage threshold would have net benefits. Synergy with extension of polluter

pays principle through MBIs

ELD 3 ** Evidence of under implementation, net benefits of cases and benefits of deterrence, plus low cost of

measures, suggest extending to cover nationally protected biodiversity would have net benefits.

Links to national biodiversity protections - means differences in rules across EU, but in ways that

reflect country biodiversity status.

112


290


Combined *** Inconsistencies in implementation and under implementation, evidence on net benefits of cases and benefits of deterrence, plus low cost of measures, suggest policy package would have net benefits.

EIA

EIA 3 *** Significantly increases application of EIA and would have significant cost, while contributing substantially to

reducing rate of conversion of semi-natural grasslands and woodlands Significant links to CAP, forestry, SEA

and BHD2


SEA

SEA 1 * Costs are moderate and relate to guidance and capacity building; could have significant benefits in integrating NNL principles into SEA but benefits cannot be measured - overall a case can be made for this measure, but evidence too limited to be conclusive.

Links especially to spatial planning, BHD and EIA

SEA 2 ** Costs greater than SEA 1 & relate to increased number & rigour of SEAs & associated screening processes.

Could have substantial benefits in integrating NNL principles into SEA but benefits cannot be measured Links especially to spatial planning,

BHD and EIA

Combined **


Spatial Planning

SP 1 * / ** Spatial planning is a key influence on future biodiversity and ecosystem services levels, but is a member

state competence so potential for EU-level guidance to influence outcomes without additional incentives is limited or at best uncertain.

If EIA and/or SEA measures not adopted, then potential relative importance from this measure

increase.

Biodiversity Proofing

BP 1 * If fully implemented, the proposed biodiversity proofing actions (stakeholder awareness, incorporation of project selection criteria and monitoring of project impacts) could have moderate benefits with low direct

costs, but as a voluntary measure, its impacts are likely to be minor in the period to 2020.

Closely links to EIA and SEA as well as to CAP 1 and CAP 6

CAP

CAP 1 * Will build on existing initiatives and networks, but within existing budgets, so all impacts likely to be small Important to link to CAP 6

CAP 6 ** Targets important ecosystems and associated species, but scope and impacts constrained by set RDP

priorities and budgets

Combined ** Small impacts as a result of constraints on new actions


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Forest Policy Options

FP 1 *

The monitoring and reporting under this measure would make biodiversity impacts more apparent, thereby encouraging Member States, the forestry sector and forest owners to take some steps to conserve

biodiversity and ecosystem services and to offset residual impacts. However, as it is voluntary it would seem unlikely to have substantial impacts by itself.

FP 2

FP 2 **

Although FP 2 is also a voluntary measure, the public introduction of NNL targets into the EU Forest Strategy and national forest policies and plans, could raise public expectations sufficiently to encourage

widespread adoption. This combined with transparent monitoring and reporting of appropriate biodiversity indicators and metrics might therefore lead significant positive biodiversity impacts, and

increases in associated ecosystem services. But given the uncertainty of uptake it is not possible to reliably quantify these potential impacts.

FP 1

Combined **


MBI 1 ** Market instruments are a key influence on future biodiversity and ecosystem services levels, and progress

can be made extending well-evidenced good practice. But is mainly a member state competence so potential for EU-level guidance to influence outcomes is limited at present.

MBI 2 ** Markets for sustainably produced goods are expanding (e.g. MSC fish) and there is potential to extend

these labels to reflect biodiversity impacts.

Links to developing markets for products with net biodiversity benefits

under other instruments (e.g. PES in MBI 1, businesses with NPI though

offsets).

Combined **

Market instruments are a key influence on future biodiversity and ecosystem services levels, and progress can be made extending well-evidenced good practice, including by introducing NNL label within expanding

markets for sustainably labelled produce. But is mainly a member state competence so potential for EU-level guidance/coordination to influence outcomes is limited at present.

Coordination can help to level playing field wrt to biodiversity incentives

(linking to offsets, ELD etc) in markets.

Offsetting

Of 1

***

Offsetting is required to achieve NNL as some residual impacts are inevitable. Of 1 provides a standardised voluntary framework for offsetting that would increase understanding, standards and awareness that

would trigger additional offsetting by some authorities and some businesses (e.g. to meet public expectations) but it would also increase offsetting costs, which would be a disincentive for some offsetting;

so overall levels might fall but effectiveness would increase.

Links to Spatial planning, SEA, EIA & BP 1

Of 1 & Of 2 ***

Voluntary extension by Member States of offsetting under the Of 1 framework to all EU funded

development projects would result in a substantial increase in effective offsetting. Links to Spatial planning, SEA, EIA & BP

1


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Priority attention:

It is clear that the birds and habitats measures (BHD 1 and 2) merit priority attention as these would increase the overall robustness, coherence and resilience of the Natura 2000 network, helping to prevent gradual erosion of the very substantial benefits that the Natura 2000 network delivers and delivering benefits for biodiversity beyond the network by improving connectivity.

While no individual Environmental Liability Directive (ELD) option was regarded as a priority on its own, the combination of the three ELD measures was considered a high priority given the interactions between the measures. It is important to keep in mind however that the scope of the ELD is limited to operators' liability for accidents causing significant biodiversity damage.

The Environmental Impact Assessment (EIA) measure has the potentially to significantly increase the application of EIA and, while it would entail significant costs, it could contribute substantially to reducing the rate of conversion of semi-natural grasslands and woodlands and hence should be considered as an essential measure. There are also important links to CAP, forestry, SEA and BHD 2 measures.

The offsetting options that focus on offsetting for EU funded projects and guidance, on the other hand, are overall considered high priority, indeed essential if NNL is to be realised as the other instruments will not be able to fully avoid or reduce impacts to acceptable levels, so residual impacts will remain. The EU could through these measures help lead by example, leverage wider expenditure through own funding and underline the commitment to NNL through action on the ground.

Moderate priority:

Strategic Environmental Assessment (SEA) options could have substantial benefits in integrating NNL principles into SEA, as they help to avoid impacts early in the development process, thereby strongly supporting the mitigation hierarchy principle. This is likely to provide significant economic benefits as developers are better able to consider alternative sites at this stage, thereby potentially avoiding biodiversity conflicts that may be costly to solve or that may delay or block the development. However, as SEA impacts are dependent on many factors, it has not been possible to quantify the measures’ benefits in this study. Therefore, although the assessment suggests that the SEA measures would be worthwhile, given the uncertainty of the benefits, it is not clear if they should be a priority measures. There are important links to spatial planning and the birds and habitats measures.

The spatial planning measure would help to ensure that development decisions are able to avoid biodiversity conflicts early in the development planning phase. However, because of the EU’s lack of competency over spatial planning, the proposed measure in the present study is limited to EU-level guidance. Therefore, whilst spatial planning measures could in principle contribute greatly towards the NNL objective, the proposed measures would only be expected to lead to a limited biodiversity benefits unless there are clear incentives for take up of such measures by the Member States' authorities. If the above SEA and EIA measures are not adopted then the relative importance of spatial planning guidance, would


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become more significant, as there would probably be a greater need to use spatial planning tools where SEA and EIA are weaker.

Biodiversity proofing, if fully implemented, could have moderate benefits through its proposed proofing actions (NNL approach implemented for EU funds, demonstration value and stakeholder awareness, incorporation of project selection criteria and monitoring of project impacts) and have low direct costs. However, it is currently considered as a voluntary measure, and hence impacts are likely to be minor (especially up to 2020 as many programmes that are funded under the current MFF are already underway). The assessment therefore would suggest at first sight that it be a low priority for inclusion in the current NNL policy package, though it would be useful to include as it would support the overall EU added value (when proofing funding) and have synergies with the EIA and SEA measures. However, taking a longer term view (beyond 2020), proofing has a very important potential impact and already having it integrated on a voluntary basis now can create a useful basis for more substantial and effective proofing later, when there is greater potential effect on new policies, the new MFF and implementation.

The Common Agricultural Policy (CAP) measures, while overall beneficial and to be supported as a “moderate priority”, are not considered as essential or high priority. This is because they are both primarily awareness raising measures, and may have limited influence at this stage in the RDP planning cycle, as priorities and budgets have been fixed, which is likely to limit the scale of their benefits. As a result, of this, and the elimination of other CAP measures under Task 1 (due to the CAP 2014-2020 reform now being completed) there appears to be very limited scope for addressing NNL in agricultural habitats. However, as the state of biodiversity in agricultural habitats is of particular concern then it would appear necessary to give a high priority to identifying additional NNL measures in the next reform of the CAP.

Similarly the forestry measures considered here are unlikely to have major impacts as the EU has limited competency over forest policy and therefore the proposed measures are voluntary and have limited scope. While there are potentially significant benefits from improved transparency via monitoring and reporting, and the possibility that public expectations may facilitate the uptake of NNL targets in national forestry strategies, they would need considerable political support to be implemented sufficiently to lead to large benefits. They therefore remain a “moderate priority”.

Market based instrument (MBI) measures have the potential to improve market signals that can influence future biodiversity and ecosystem service levels. However, they are generally under Member State competence and hence for EU action arguably only a moderate priority, and not an essential EU priority despite the EU and the Member States’ commitment to addressing incentives harmful to biodiversity as part of its commitment to the CBD Aichi targets.


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Overall therefore, the assessment suggests that all the policy options merit support, but four in particular should be seen as particularly high priority or essential – the birds and habitats measures (BHD 1 and 2), the combination of measures under the ELD, the EIA measure and the offsetting measures that focus on EU funding and guidance.

15.2 Summary Assessment: Links and wider contributions of the NNL Measures

The above summary focused on the individual measures and priorities. This sections looks at how the whole set together address the NNL objectives and how the measures contribute to the NNL hierarchy (15.2.1), at how the NNL measures and instrument can both work together in the project and planning cycle and address different points and hence offer complementarity (0), and how they address wider EU policy objectives of better implementation, better regulation, EU added value and subsidiarity (15.2.3). This additional synthesis goes beyond instrument specific reflections and considers what mix of instruments is worth supporting to achieve NNL objectives in a wider EU policy context.

15.2.1 NNL instrument mix and contribution to NNL and the NNL hierarchy

The full set of NNL instruments and associated policy options would, as noted above, lead to significant reductions in net loss, however they would not achieve the overall objective of NNL for the EU as a whole. There could be specific areas where NNL may be achievable, most obviously and importantly if the BHD measures were fully implemented (complementing other existing measures under the directives). NNL might also be achieved if the offsetting measures for residual impacts from EU funded built developments were fully implemented; but as they are voluntary measures then this would seem unlikely. The remaining policy options would reduce residual impacts from other developments, as well as forestry, agriculture and fisheries, but make limited progress towards achieving NNL.

As discussed in the NNL Policy Options Study, avoidance and reduction measures (such as SEA, EIA etc.) cannot eliminate impacts, and therefore there will inevitably be residual impacts. In such a situation NNL can only be achieved through compensation for the residual impacts. This is addressed through the offsetting measures in this study, and to some extent in the BHD measures and the ELD measures. However, the offsetting measures are restricted to a voluntary EU framework for all impacts, and voluntary adoption of offsetting of EU funded projects, this leaves a considerable offsetting gap. More ambitious mandatory offsetting measures at the EU level were proposed in the NNL Policy Options Study that would, if fully and effectively implemented, achieve the NNL ambition to a realistic degree. However, as discussed in Chapter 3, the Task 1 analysis concluded that it would be unrealistic to include them in this study, largely because it would take time for the offsetting framework considered here (Of 1) to become sufficiently established, with adequate expert institutional support, to effectively coordinate and regulate the scale of offsetting that would occur under a mandatory regime. It is nevertheless important to note the growing body of national offsetting legal frameworks (Conway et al, 2013), which could contribute to the NNL objective, and which could be enhanced by a voluntary EU framework.

As regards the NNL mitigation hierarchy itself - at first sight, many of the policy measures considered would seem to focus on particular parts of the hierarchy. For example, many consider offsetting to be a downstream action, with rehabilitation and restoration measures


295

and requirements a bit more upstream, and SEA/EIA, planning tools and some MBIs to work more upstream still, leading to avoidance or minimisation of impacts. It is increasingly becoming evident that a range of instruments could also have impacts higher up the hierarchy because the costs of offsetting residual impacts are often very great and this creates a strong incentive to avoid and minimise impacts – hence offsetting can have an impact deterrence effect Figure 15-1. It is difficult to identify and quantify this impact (as highlighted in associated discussions in the instrument chapters), but it is important to underline that it exists and likely to be quite significant. For example, if and where offset requirements are in place, developers prefer to not use offsets (particularly where carefully designed to be reliable, and hence costly) if and where they can find less expensive upstream solutions. This underlines that there are often wider added-values of a well-designed instrument than their strict formal function would suggest. It also underlines that the interconnections of instruments merits particular attention when exploring whether to select a subset of the instruments or the whole set.

Figure 15-1 The potential contribution of the instruments to no net loss in relation to the mitigation hierarchy


296

15.2.2 NNL instruments contributions to the policy and project implementation cycles

The instruments and policy options target different parts of the policy and implementation cycles. So while the above set of NNL instrument seems at first sight to be an extensive list that raises question of overlaps, when looking at where the instruments are applied along the implementation cycle, and the spatial complementarity of the instruments, most concerns of overlapping instruments are addressed. There are a range of drivers of biodiversity loss in the EU that occur at different stages in the policy and project cycle. Figure 15-2 below shows the distribution of the policy options considered in this study across this cycle and the complementarity of measures. To illustrate this, the figure starts from the regional development planning process (the central row of green boxes), and considers its links to protected habitats and species policies, and to land use practice (e.g. agriculture and forestry). Figure 15-2 Complementarity of NNL policy instruments over the planning and project cycle

Source: own representation

The diagram shows the main places where instruments are designed to be applied, although it should be noted that they can also have some influence across multiple stages of the cycle. This is the case when instruments create incentives that are passed up decision chains/ supply chains (as noted in the mitigation hierarchy figure above), and is dependent on the flows and quality of information linking decisions. It is particularly relevant to the ELD, which includes clauses to avoid risks to the environment.


297

Some instruments can also be applied at more than one point, for example the tax base used for MBIs can sometimes give a choice between deploying instruments at a strategic scale (e.g. tax on the volume of agri-chemicals purchased) or at an operational scale (e.g. incentives or compensation to preserve particular landscape features (that can be seen as public goods) under CAP. The instruments also have different functions, and it is possible to group them on this basis – some are more strategic level instruments, others on land use and general environment, and yet others are specific measures focused on the protection of species and habitats. Strategic level instruments - a variety of instruments apply to distinct drivers of biodiversity loss at a strategic planning stage:

• Biodiversity proofing applies to public expenditure that could have unintended adverse consequences for biodiversity.

• Good practice in spatial planning applies to land use planning and zoning processes. • Some MBIs encourage or discourage activities at this stage. • The use of SEA applies to particular plans or goals. Along with spatial planning it

provides an opportunity to link to protected habitat and species requirements, for example, through helping deliver connectivity and habitat networks under the Birds and Habitats Directives.

General environment and land use policies

• EIA can be applied to developments and some land and sea use changes (e.g. due to sectors such as agriculture, forestry and aquaculture) that have the potential to affect a wide range of habitats and species (i.e. beyond those covered by the Birds and Habitats Directives) and ecosystem services, MBI 2 (a NNL product label) is potentially a significant impacts on the production practices in these sectors.

• CAP payments are incentives that can have a major influence on land use, both when land use options are being considered, and during their implementation.

• Biodiversity offsets mainly apply to planned land use developments that damage biodiversity that is not protected at an EU or national level.

Protected Habitats and Species

• SEA and EIA also consider protected habitats and species, and can inform appropriate assessments carried out under the Birds and Habitats Directives.

• Compensation measures (i.e. offsets) are required for residual impacts on species and habitats covered by the Birds and Habitats Directives that are the designation features of Natura 2000 sites.

• The ELD tackles unintended damage to protected habitats and species from incidents.

While there is complementarity of instrument and synergies, are there any duplications?

• An example of potential duplication of policy instruments influence arguably could arise with MBI 1 potentially providing fiscal incentives that duplicate the purpose of regulation through EIA. However, such duplication is most likely under sector-specific applications (e.g. EIA 3 and MBI 1 for agriculture) and also would only be a


298

partial overlap (as there would be a role for EIA even if an MBI were in place) and therefore can be managed at national sector levels (to ensure optimal instrument design to support coherence).

• Potential conflicts between instruments due to conflicting incentives can also be reduced through measures that coordinate and harmonise the processes they use (e.g. the metrics for ELD, BHD and offsets policies).

The overall conclusion is that the instruments and policy options are complementary, applying to different drivers of biodiversity loss, at different parts of the policy and project implementation cycles. In addition, the measures focus on different sector issues, land use decisions that spread across geographic scales – some instruments focus in particular on zones designated as Natura 2000 sites, others affect wider Green Infrastructure of different types – including agricultural land, forestry, rivers, urban parks, coastal areas.

15.2.3 Wider contributions to EU objectives: EU added value, better implementation, better regulation and subsidiarity.

Whilst, the set of policy options considered in the evaluation have been assessed in their

own right, they are connected, either through direct synergies or complementarity along a

policy / implementation cycle, and across the NNL hierarchy. There are therefore also

merits in looking at how the mix of instruments would work together and contribute to

wider EU objectives. To address this, the analysis considered how each instrument and

option could potentially contribute across the following four high priority policy threads (as

discussed in chapter 5 and depicted in Figure 15-3, on:

• Better implementation (1); • The added value and cost-effectiveness of the EU budget (2); • Better regulation and governance (3); and • Engaging diversity and Member States initiatives under the subsidiarity theme (4)


299

Figure 15-3 Clustering NNL measures around main themes

Source: own representation

Given the specific focus of this study, the better implementation issues are considered from two perspectives – the better implementation of the Birds and Habitats Directives themselves (which is the subject of a nature legislation Fitness Check at the time of writing), and better implementation and regulation links to use of wider policy tools and instruments. Similarly for the better regulation and governance issue, this is explored from two angles – through improved monitoring and information (i.e. improved evidence based policy making and also the MAES type initiatives), and wider guidance and governance measures that improve the knowledge base for action.

As the analysis of the instruments and measures has developed, it has become increasingly clear that each could make contributions across a range of these wider themes with differing degrees of importance. The EU-added value can for example be improved by making use of SEAs and EIAs linked to Cohesion Policy as well as the use of wider biodiversity proofing tools – as they would encourage more projects that lead to win-wins (synergies between local economic development and natural capital), and help avoid or minimise unacceptable trade-offs in project selection and implementation. This would, if integrated in monitoring and evaluation requirements, feed through in future programme evaluations (i.e. at the Operational Programme level, or with respect to Cohesion Policy overall) and hence create a useful additional evidence base for future programming.


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The objectives of better implementation (e.g. as noted under the 7EAP) would be supported by guidance and other measures linked to EIA, ELD, SEA and of course the Birds and Habitats directives themselves as the new measure would help meet the objectives in these already mature, but not fully implemented policy areas. Table 15-4 presents a summary assessment of the contributions of each of the NNL instruments and measures, building on the details in the instrument chapters 5 to 14.

The better implementation of the Birds and Habitats Directives would be supported directly by the two BHD measures and also substantially supported by the biodiversity proofing measure (as this can help reduce negative external pressures) as well as helped through the strengthening of ELD measures, CAP and forestry policy measures.

As regards better implementation of wider policies and tools, the ELD, EIA and SEA options would each offer major support for better implementation in those areas already committed to by the EU and the Member States. The CAP measures would also support better implementation as well as the forestry measures and the offsetting framework. Biodiversity proofing also has the potential to support improved implementation of objectives more widely given the synergies between nature and other policy areas (e.g. Cohesion Policy, marine policies, agriculture, climate, water and health policies).

The added value and cost-effectiveness of the EU budget would be substantially enhanced by the CAP and offsetting policy options in particular, as well as through the use of MBIs and biodiversity proofing. The level of improvement would depend on how the measures are implemented - for proofing this is an issue for EU level engagement as well as through the different governance levels of EU funds and their implementation. For Offsetting this relates to the programming, project selection, implementation, monitoring and enforcement steps, again across governance levels. For MBIs this would support both the proofing and the offsetting initiatives via visibility for a NNL label. The existence of improved ELD as well as the BHD measures would also support improved EU added value.

Evidence-based policy making would be significantly supported by the forestry measures as well as SEA. The ELD and Of 1 policy options would also be expected to contribute, as both provide information over time of impacts, responsibilities and solutions that can be factored into policy deliberations and programme prioritisation and implementation (e.g. Cohesion Policy) in the future. These measures would complement existing measures to support evidence provision such as the MAES process and future measures, such as making use of satellite imagery that could help inform areas of NNL and net positive gain across the EU, from the perspective of a range of biodiversity and ecosystem service criteria113. The data gathered from the forest monitoring measure and for SEA could feed into Natura Capital Accounting (NCA) initiatives thereby supporting NCA objectives in the Biodiversity Strategy and 7EAP (see Box 15-1). Moreover, the development of NCA tools and information could help support many of the policy measures considered here, and improve the assessment of their costs and benefits.

113

See next footnote for discussion on NNL, spatial scale and the “specificity” of NNL – i.e. for biodiversity and (which) ecosystem services.


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Box 15-1. The potential for Natural Capital Accounting to support the no net loss objective

Indicators and data that show the value of the biodiversity and ecosystem services from studies such national Ecosystem Assessments and the MAES initiative can to some extent, be used to monitor the changes to that value of over time. This kind of reporting moves attention to the capacity of the environment to produce ecosystem services and interdependencies with the users of these services. Capacity for production is what economists refer to as capital, and hence work has developed in recent years on Natural Capital Accounting (NCA).

The natural capital concept is used flexibly by different users. NCA can refer to accounting exercises analogous to national accounts (e.g. for protected habitats), but also by business, such as Natural Capital Protocol, Environmental Profit & Loss accounts, Corporate Natural Capital Accounting, and Natural Capital asset checks / risk registers. However, it can also have a broader meaning of ‘taking account of’ – involving different methods that measure natural capital impacts and/or dependencies, using different types of data, to inform decision-making. This is seen as helpful to governments and business in adopting language (around) capital, that is more familiar than the academically-originated science-based ‘ecosystem-services’ dialogue.

Different NCA approaches can be justified based on the different contexts, types of decisions, and the characteristics of the natural capital assets they depend on. Monetary values provide a common unit of measurement that aid accounting processes, but are not necessary for natural capital accounting. This is particularly the case for biodiversity, which is typically one of the hardest aspects of natural capital to identify satisfactory monetary values for. Many of the values of ecosystem functions to which biodiversity is integral may be reflected in the values of the services those functions contribute to, but this is easier for some services for others, in particular being challenging for cultural services and non-use values. Further challenges include establishing systems that translate habitats and species information into data that fits accounting structures and decision-making timescales.

Nevertheless, NCA has a role to play in delivering NNL of biodiversity, for example by helping to capture the benefits of protecting natural capital assets, such as through habitat protection measures, by illustrating the range of values they support for society. NCA is thus indirectly relevant to all the policy measures discussed, and could have more direct relevance in several areas, such as designing MBIs, or measuring the effect of sector policies such as in forestry or agriculture on the state of productive natural assets. However, such uses are dependent on the wider understanding and acceptance of NCA approaches, which remain in a state of rapid development, such as through the global Natural Capital Protocol initiative

114, and the Knowledge

Innovation Project115

, which aims to design and implement an integrated accounting system for ecosystems and their services in the EU.

As regards guidance and governance to develop a knowledge base for action, this would be supported by a wide set of the NNL instruments and policy options – CAP, ELD, EIA, SEA, MBI, SP and offsets. This reflects the nature of many of the instrument and measure design (e.g. as some are guidance tools). Guidance also helps with better implementation and encourages better EU added value if duly followed, as discussed already.

Finally, as regards engaging diversity and Member States initiatives under the subsidiarity theme, the proposed offsetting framework would deliberately leave much to Member State discretion (e.g. on metrics and the offset delivery mechanism), and would focus on setting out principles and key standards. Furthermore the spatial planning tools, ELD 2 and

114

http://www.naturalcapitalcoalition.org/natural-capital-protocol.html 115

http://unstats.un.org/unsd/envaccounting/ceea/meetings/tenth_meeting/BK10d.pdf

http://www.naturalcapitalcoalition.org/natural-capital-protocol.html

http://unstats.un.org/unsd/envaccounting/ceea/meetings/tenth_meeting/BK10d.pdf


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CAP 6 measures are designed to allow flexibility to Member State circumstances and respond to subsidiarity concerns.

As summarised in Table 15-4, the mix of instruments being considered to support the NNL objective also offer substantial support for the wider EU objectives for improved implementation, better regulation, better EU added value (from policies and funds) and a sensitivity to subsidiarity issues and diversity of Member States contexts, practices and needs.


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Table 15-4 The NNL instruments and policy options in relation to the high-level policy priority clusters




4: Subsidiarity


A: B&H directives

B: Wider policies &

tools


making

B: Guidance for implementation

BHD 1: Improved and wider Appropriate Assessments and compensatory measures for unavoidable impacts

X x X


X X x


x X x x X x


x X x x

ELD 3: Extension of coverage of the Directive to include nationally threatened species x x x x X EIA 3: Improve implementation of the EIAs through awareness raising and enforcement, especially for agriculture

X X

SEA 1: Improved implementation of SEA through capacity building and guidance X X X SEA 2: Improvements to the SEA Directive, including improved screening criteria X X SP 2: Promotion of best practice spatial planning by Member States x X CAP 1: Raise awareness amongst land managers about the importance of maintaining semi-natural habitats, with a particular focus on HNV farmland x x x

x


x X X X

FP 1: Encourage Member States to cooperate on a voluntary basis to develop a rigorous standardised accountable forest monitoring and evaluation system

x x X x

FP 2: Develop targets that contribute to NNL of biodiversity and ecosystems and promote their integration into relevant sustainable forest management strategies, programmes, plans, criteria, indicators, and monitoring and certification schemes.

x X x X

BP 1: Encourage Member States to ensure that the implementation of all EU funded projects, especially those related to regional policy, transport and energy, fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures.

x X X X X

MBI 1: EU guidance on the potential role of Market Based Instruments to deliver NNL X MBI 2: Development of an EU ‘No Net Loss’ Label X X x Of 1: EU Offsetting framework and implementation plan to promote agreed types of offsetting according to defined standards

x x X X

Of 2: EU Framework to promote offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem services

X X x


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15.3 Conclusions, interpretation and next steps

15.3.1 What does the evidence say on the measures and the mix?

The NNL policy options focus on complementary areas and they are often mutually supportive - having a mix can support the effectiveness and efficiency of the instruments. While there are some instruments that on their own are a higher priority than others, there are good arguments for the full set of measure to be supported. There is one area where instruments were seen to potentially create an overlap (and then only partially), but given their complementarity, this is not seen as an issue that would erode efficiency significantly, or reduce the need for either measure.

The level of the benefits also would depend on the level of commitment to the use of the tools, the timing of their application and their implementation. This is a multi-level governance responsibility across levels from EU to Member States, programmes, regions, cities and business.

Each of the NNL policy options offers the potential for contributions to NNL and merits attention given the overall significant benefits. The objective to achieve NNL of biodiversity and ecosystem services by 2020, as included in the EU biodiversity strategy, is very ambitious. As indicated in the Policy Options Study and as confirmed in the present contract, to achieve the NNL objective will need additional measures beyond those currently being considered and more time (many habitats and species are resilient and capable of strong recovery given the right conditions, but it takes time). Part of the additional measures would be Member State own actions, business actions and citizen actions. Others would be the full implementation of existing EU policies, strategies and measures, in the biodiversity field (notably the Birds and Habitats Directives, the target to restore 15% of degraded land under the Target 2 of the biodiversity strategy, and implementation of the Green Infrastructure Strategy), wider acquis Communautaire and making due use of EU funding to ensure better EU added value that take synergies of NNL objectives into account.

Actions beyond 2020 are required to achieve NNL and should be planned for. While the time frame for the present investigation was the 2020 deadline established in the EU Biodiversity Strategy this has meant that a number of measures that could not be accommodated within this time frame were not taken into account. If the objective of NNL of biodiversity and ecosystem services is to be achieved, it will require further consideration of potential post-2020 measures116. In particular, it would require mandatory offsetting for 116 This study has focused on NNL at the EU level. The achievement of NNL is also a question as to what spatial

scale is being looked at - i.e. site, local areas, region, country, EU - and activity - i.e. project, plan, policy or programme. It is likely that there could be examples of successful NNL at site and local area level, for certain projects and some regional applications of programmes if duly designed and implemented. In addition NNL achievement depends on what NNL “specificity” is - i.e. defining NNL for biodiversity and NNL for ecosystem services separately (i.e. two bundles), or whether to be more specific and have NNL aspirations or targets for specific services (or bundle) in the latter cases, and ecosystems, habitats or species in the former case. This has implications for what trade-offs are deemed (indeed defined as) acceptable within NNL - i.e. across spatial scales, services, and across biodiversity, and indeed across EU funds, programmes and policies. This will require careful attention when looking at rules for offsetting for EU’s own funded projects, evaluation criteria, and monitoring and measurement under programmes and funds. See also discussion on this issue within the NNL Policy Options Study.


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all significant residual impacts. The voluntary offsetting measures (Of 1 and Of 2) explored in the present contract could provide the foundation for developing such mandatory approaches and for that reason they should be initiated as soon as possible. Similarly, the voluntary biodiversity proofing proposed here, could form a basis for more rigorous proofing of policies, funding and implementation after 2020. Post-2020 policy developments would also need to include more ambitious measures for forestry and agriculture (as part of the CAP reform), as the measures considered here are largely voluntary and have limited scope. Preparatory work on such measures should start well before 2020. These would probably need to focus on impact avoidance and reduction measures, but some form of offsetting measures (possibly at a policy level) would also be required to achieve NNL.

15.3.2 Overview of knowledge gaps and needs

The level of case information across the instruments varies and while it has been possible to develop a sufficiently clear picture as to which instruments and measures offer the highest added value for NNL, the wider environment, society and the economy, it is difficult to say with precision what the overall net benefits would be. This would depend on a wide range of factors, including on Member State implementation, the design of the measures themselves, and the interaction of these measures with each other and with other measures and policies in place.

For several instruments an illustrative assessment of EU-wide costs and benefits has been attempted to help scope out the scale of implications for the EU as a whole – these aim at testing whether instruments are fit-for-purpose by high level illustrative assessment. In each case the methods adopted, assumptions used, and data built on, have been noted so that there is a clear data trail and efforts made to show the present results in the context of the data availability and hence robustness. While there is always scope for more data, case examples, and quantification, the assessment conclusions are likely to remain as stated above, though of course, with some potential for nuance in light of further insights gleaned.


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ANNEXES

ANNEX 1: ELD

1.1 ANALYSIS METHODS, DATA SOURCES AND RESULTS IN DETAIL

Method and data sources

Currently, based on a compilation of Member State ELD reports117, there have been approximately 200 - 550 ELD cases per year from 2007 – 2014.

Cost element1: Costs to developers and costs to the regulators

• Indicators to look at: Number of ELD cases reported and cost per case as included within Member State reports to the Commission.

• Method to use: Likely magnitude of change in the overall number of ELD cases within the EU28, coupled with likely magnitude of changes in costs across the EU28118.

There is little information regarding the specific costs to operators of preventative, remediation and monitoring measures incurred through implementation of the ELD for specific countries and for the EU as a whole. This is due to the fact that in general, there is no obligation to operators to provide information to the regulator about costs in respect of damage. Costs may also vary drastically depending on the severity of the ELD incident and the measures required for prevention and/or remediation. Due to these factors, deriving an estimate of the average costs incurred by operators per incident or habitat type is difficult. Although information is sparse, Member State data presented within a draft European Commission document includes costs of remediation.

Table A1.1 presents these cost estimates. As shown, the average costs range from €350,000 to €1.3 million per case depending on which Member State’s data are included, and around €41,000 per case for all cases with reported costs less than €1 million. It should be noted that estimates are only based on information regarding around 10% of all cases, and the vast majority of cost information was supplied by Hungary, thus explaining the sensitivity of estimates to the inclusion (or exclusion) of its data. If these costs are applied to the average number of confirmed damage or threat cases each year as presented in Table A1.2 (181), costs are estimated to be €64 million - 229 million per year.

117

http://ec.europa.eu/environment/legal/liability 118

It is recognised that average remediation costs differ greatly between Member States, however a discussion of average costs per case can provide useful illustrative figures for impacts of policy options addressed within this analysis.

http://ec.europa.eu/environment/legal/liability


322

Table A1.1-1: Summary of Member State costs of remediation between 2007-2014 (€ 2014 prices)

Total costs

of remedial

action (€)

No. of

cases with

indication

of costs

Average costs (€) per

case

All reported cases 179,533,079 142 1,264,317

All reported cases excluding Kolontár/Hungary,

Moerdijk/Netherlands 49,533,079 140 353,807

All cases below €1 million 5,821,238 137 41,490

Source: http://ec.europa.eu/environment/legal/liability

Further, in all options, but more so for ELD 2 and ELD 3, it is likely that businesses may choose to take some anticipatory action in response to a perception that they will be responsible for an increased scope of damage. This action may result in increased costs in the short-term to businesses that take action (and a likely reduction to the risk of causing damage and consequent costs in the longer term). Within this analysis, and following rationale from Defra and WAG (2008), the benefits of taking anticipatory measures are expected to be at least as great as the costs.

• Evidence to build on: impact assessments and reviews of the ELD’s current operation

• Method to use: total number incidents/area damaged under current regime, and number likely under extended regime, taking account of deterrent effect.

Cost element2: Costs of financial safeguards

• The impacts of requirements for financial safeguards have implications for many sectors that pose a risk to the environment, but the costs of this can be mitigated by efficient design and by sharing of risk across sectors. Sources identify the difficulty in supplying insurance for ELD incidents due to the lack of cases and corresponding information regarding the cost of these cases, as well as a lack of demand (ACE Group, 2011; BIO Intelligence and Stevens & Bolton, 2013). Consequently, there is not sufficient information to assess the cost of ELD insurance and financial security measures to EU operators.

Possible approaches to quantifying benefits: biodiversity and ecosystem services

Qualitative assessment of social impacts was completed based on the information provided within previous studies regarding the implementation of the ELD, including impact assessments, Member State reports to the Commission and other documents included within the reference list to these annexes. A large proportion of the costs identified in this assessment will in turn be revenue for the environmental industry. There is unlikely to be a net gain to the economy associated with increased revenue streams to the environmental industry based on an increase in ELD cases, as they would displace expenditure elsewhere in the economy. These expenditures are transfer payments from one sector to another (Defra



323

and WAG, 2008). If there are external benefits in terms of technological development, then these could be considered as economic benefits of the Directive but to the extent that this effect exists it is not quantified in this assessment.

All of the options have been assessed as being unlikely to affect competition or international competitiveness. Although there is a potential for increased opportunities in environmental and insurance sectors, the options are not likely to cause a net gain to the economy. All options will provide additional benefits to health and local environment from reduced damage and environmental enhancement.

Governance aspects

All ELD options have been assessed as being particularly practical as they involved adaptations to existing legislation, particularly, option ELD1 which does not modify the Directive per se. All of the options are assumed to have a similar enforceability and measurability as the original Directive, with concerns over the ability for regulators to prove the source of pollution as well as its occurrence above and beyond the threshold defined. An additional concern is the difficulty in defining the baseline conditions within the vast amount of habitat types across the EU.

Overall there are advantages to all three options being led by the EC in order to avoid free riding/ competitive behaviour by Member States, and thereby maintain the single market. There is potential to apply subsidiarity in relation to coverage of nationally designated habitats and species, where different ecological communities, and pressures on them, across the Member States will result in differences in the biodiversity covered under ELD3.

Possible approaches to assessing social aspects: jobs, equity, quality of life

• Indicators to look at: Employment directly attributable to environmental assessment

• Evidence to build on: Member State cost-benefit analysis of EIA Directive (e.g.. BIO, 2006; Oosterhuis, 2007) Method to use: estimation of effort required on EIA and proposed responses, and effects on employment (FTE).


324

Table A1.1-2: Summary of Member State ELD activity, 2007-2013

Member State

Confirmed Damage Cases

119

Confirmed Threat Cases

Total of Confirmed

Cases

Pending Cases

120

Dismissed Cases

121

In Total Type of incidents (if known)

Austria 0 no info 0 3 1 4

Belgium 1 0 1 0 0 1

Bulgaria 0 4 4 1 0 4

2 damage to protected species and natural habitats

4 damage to water

3 damage to soils

Cyprus 1 no info 1 0 1 2

Czech Republic

0 0 0 0 15 15

Denmark 0 0 0 0 0 0

Estonia 2 2 4 4 8 16

Finland 2 no info 2 0 0 2 1 damage to soil

1 damage to water

France 0 0 0 0 no info 0

Germany 60 no info 60 0 (estimation) no info 60

Greece 38 13 51 1 no info 52

Hungary 563 no info 563 10 (estimation) no info 573

Ireland 0 0 0 4 6 10

119

"Confirmed" case means – as distinct from "pending" – that the case even though remediation may still be ongoing is being handled under the national ELD law. 120

"Pending" is not tantamount to "open" (which amount together with "completed" to the total of "confirmed" cases), but means (pursuant to the Member State reports) that the case may became a "confirmed" ELD case, but is not (yet). Therefore it is at present included in the total number of ELD cases but not in the total number of "confirmed" ELD cases. Regarding the numbers under "pending", no distinction was made between environmental damage and imminent threat. 121

"Dismissed" means that the procedure started under national ELD law but was later dismissed e.g. because of absence of verified significance or Annex III activity.


325

Member State


119


Total of Confirmed

Cases

Pending Cases

120

Dismissed Cases

121


Italy 17 up to 133 17(-150) approx. 1000 approx. 850 Approx. 2,000

5 involved damage to only one natural resource (one case of damage to land; two cases of damage to water; two cases of damage to the atmosphere)

12 damaged several natural resources (five cases of damage to land and water; six cases of damage to protected natural resources and services; one case of damage to the atmosphere, land and water)

Latvia 13 no info 13 0 3 16

7 damage to protected species and habitats

4 damage to water

5 damage to soil

Lithuania 4 no info 4 0 no info 4 all land damage, one also includes

underground water damage

Luxembourg 0 0 0 0 no info 0

Malta 0 no info 0 1 1 2

The Netherlands

0 no info 0 0 0 0

Poland 506

(maximum) no info

122 506 8 (minimum) no clear info

514 Most are damage to land, followed by biodiversity

Portugal 2 6 8 0 no info 8

Romania 3 1 4 0 no info 4

Slovenia 0 no info 0 0 no info 0

Slovakia 0 no info 0 0 no info 0

122

Poland clarified by written comment of August 2015 that they did not provide information on cases of imminent threat as such information was not obligatory according to Annex VI ELD. Poland has information on cases of imminent threat.


326

Member State


119


Total of Confirmed

Cases

Pending Cases

120

Dismissed Cases

121


Spain 11 no info 11 1 no info 12

1 damage to land

10 damage to water

1 damage to land, water and coastline and bays

Sweden 4 0 4 1 0 5

UK 12 7 19 0 several cases 19

In total 1233 166 1266

(1416123

) (41

124) 1041

Minimum (35

125) 885

(1324) 3324

Average per country

46 6 47 (52) (2) 39 (1) 33 (49) 123 -

Average per year

126

176 24 181 (202) (6) 149 (5) 126 (189) 475 -

Source: http://ec.europa.eu/environment/legal/liability

123

Including the maximum of 133 imminent threat cases of Italy 124

Without Italy 125

Without Greece and Italy 126

Assumes the seven year time period from ELD implementation in 2007 to 2014.



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ANNEX 1.2 EXAMPLE OF POTENTIAL COSTS OF AN ELD INCIDENT

The Environmental Liability Law recommends the use of two types of approaches: equivalency analysis approach (first choice) and “value” approach (more conventional but also more controversial environmental valuation methods). The latter approach must only be used by default, when the use of equivalency analysis methods is not possible because of (for example) a lack of information (such as the condition of the environment before damage, etc.).

An analysis of the cost of compensation was conducted by the French Ministry of Environment on a past accident: a truck discharging chemicals into a river in the Pyrenees. On June 5th, a road accident led to a spill of 17,000 litres potassium hydroxide into the Gave d’Aspe (River Aspe), destroying all aquatic life on a 4km stretch, and leading to a prohibition of fishing for 3 to 5 years. Different compensation options were considered, and these result in very different costs (p 83 and 84 - MEDDE, 2012).

Table A1.2-1. Cost analysis of the damage on the Gave d’Aspe, using different approaches

€

Equivalency Analysis (HEA) approach in situ

Equivalency Analysis (HEA) approach ex situ

Value-value approach

Cost-value approach

Cost of primary remedial measures

29,463 29,463 29,463 29,463

Cost of restoration project

37,800 74,620 12,800 6,063

Cost of monitoring of the restoration project

30,000 17,220 8,760

Total costs 97,263 121,303 51,023 35,526

- Equivalency Analysis (HEA) approach - in situ

Cost of primary remedial measures: these costs are the same for all four approaches. They are based on the actions undertaken immediately after the occurrence of the incident. These costs include:

- Removal of dead fish = 6 persons for 2 days; - Treatment costs of the dead fish = costs calculated using the number of fish per

hectare, the average weight of each fish, and biomass per hectare; - Cleaning of the Gave d’Aspe which corresponds to a loss of operating costs for

EDF (EDF increased the quantity of water going through the polluted river by releasing water from its dams located upstream). The cost of the leaching process is based on the price of MWh not sold (as not produced) at €110 per MWh in June 2007 for 120MWh not produced;


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- Monitoring cost of the primary remedial measures - visual monitoring, electrofishing, and analysis conducted on benthic invertebrates during the 3 years following the incident.

Cost of restoration project: restoration of 12.6km of riverbanks = 120 euros per work day for 315 days (the restoration costs of a similar project in a similar context were used to estimate this cost).

Cost of monitoring of the restoration project: The restoration project has to be monitored in order to assess the efficiency of the restoration project (in this case, over 10 years). Cost estimated at 3000 euros per year.

- Equivalency Analysis (HEA) approach - ex situ

Cost of primary remedial measures: see above.

Cost of restoration project: over 10 years; restoration project implemented on 11.48 hectares. The cost of the project includes:

- The establishment of grass strips (500 €/ha), - The opportunity costs of this land use change, calculated based on operating of

losses (600 €/ ha /an). Cost of monitoring of the restoration project: cost estimated at 150 € per hectare per year.

- Value-value approach

In this approach, the welfare losses experienced by the population affected by the damage must be equal to the welfare gains from the restoration project.


Cost of restoration project: 1.6km of riverbank has to be restored. The cost of restoration of 1 km of riverbank was estimated at €8,000.

Cost of monitoring of the restoration project: cost estimated at 360 euros for the first year, then 600 euros the following years. The duration of the project is 15 years.

- Cost-value approach

In this approach, the welfare loss is converted into euros and corresponds to the cost of the restoration project.


Cost of restoration project: cost based on the loss of welfare associated with the loss of fishing trips. The cost of restoration project is equivalent to the discounted value of the lost fishing trips over 3 years. The data used to estimate this cost include the number of fishing trips that would have taken place if the pollution had not occurred, the (partial) cost of a fishing trip (estimated from the cost of a fishing licence valid for 1 day), and discount rate.


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In addition, the costs of the evaluation of damages, and identification of remedial measures (which amount to €160,000) have to be added to the restoration costs. It is not known if these costs are typical or if they represent an unusual example given the extra attention provided to this case as reflected in this evidence. This figure should not be compared to the monetary figures for compensating the damage because these do not represent a full assessment of the value of damage under this case: figures that are cost-based to do reflect welfare, and the valuation of fishing trips is partial, reflecting license costs but not travel costs for those fishing.


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ANNEX 2: DESCRIPTION OF MBIs AND THEIR LINKS TO POLICY INSTRUMENTS

Table A2.1. Links between instruments and MBI’s

Instrument Policy Option Link to MBI

BHD

BHD 1. More appropriate assessments and compensatory measures

MARKET FRICTION: This would improve information on environmental impacts, possible compensatory measures and metrics (to be used in offsetting) to both polluters and benefactors, thereby improving the adjustment of market operation to compensate for environmental externalities.

BHD 2. Enhanced implementation of Articles to maintain bird populations and coherence of the Natura 2000 network

PRICE BASED: Use agri-environment and other similar incentive payments to target measures that will improve habitat connectivity

ELD

ELD 1. Enhanced implementation through awareness raising, improved guidance and enforcement

MARKET FRICTION: This would improve information on ELD to both polluters and benefactors thereby improving the adjustment of market operation to compensate for environmental externalities.

ELD 2. Guidance on the damage significance threshold and equivalency methods to reflect NNL biodiversity objectives

ELD 3. Extension of coverage of the Directive to include nationally protected biodiversity

QUANTITY/PRICE BASED: This would expand the remit of ELD (e.g. its compensation or financial security requirements) to include all other national biodiversity protections (in half of the EU27 states this happens already).

EIA

EIA 1. Ensure key EIA reform proposals made by the Commission are adopted

MARKET FRICTION: This would improve information on which to make use of existing instruments established under other EU initiatives, as stronger links from measured impacts to compensation.

EIA 2. Wider future reforms of the EIA Directive

MARKET FRICTION: This would improve information and expand the remit of ELD/ offsets (compensation) to include deforestation of large areas and offshore hydrocarbon production as well as additional types of development.


QUANTITY BASED: This would expand the remit of offsetting (compensation) to include additional agricultural and forestry areas

SEA

SEA 1. Improved implementation of SEA through capacity building and guidance

MARKET FRICTION: This could improve information on land suitable for compensation, as well as land already protected for biodiversity.

SEA 2. Improvements to the SEA Directive, through improved screening criteria

MARKET FRICTION: This could improve information on role of areas in safeguarding biodiversity, and functional roles of land outside Natura 2000 sites in maintaining the coherence of the network, extension of SEA to policies may improve NNL integration into planning policy.

SP SP 2. Promotion of best practice by Member States

MARKET FRICTION: This would improve information on target areas for offsetting or agri-environment schemes


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CAP

CAP 1. Raise awareness amongst land managers about the importance of maintaining semi-natural habitats, with a particular focus on High Nature Value (HNV) farmland

PRICE BASED: This would lead to changes in MS funding (through RDP) through encouraging MS to provide funds to secure the viability of HNV farming and ensure that any loss of such habitats is prevented or offset elsewhere (e.g. by placing a proportion of the direct payment that the farmer would have received to a habitat bank or trust administered conservation credit scheme – unlikely to be feasible before 2020)

CAP 5. Encourage Member States to apply the Pillar 1 greening requirement for permanent grassland in a way that protects valuable semi-natural grasslands

CAP 6. Encourage Member States to implement the EAFRD agri-environment-climate and forest-environment-climate measures (and other measures) in ways that deliver greater contributions towards NNL.

PRICE BASED: This would lead to changes in MS funding (through EAFRD) through EU good practice guidance. Subsidiarity of EAFRD means potential improvement with regard to operation of payments (the rates and advice/support with funding).

CAP 7. Include ‘preservation of semi-natural habitats, including semi-natural grassland, peatlands, wetlands [others]’ in the cross-compliance framework as a GAEC standard as an alternative to CAP Option 4.

PRICE BASED: This would lead to changes in cross-compliance requirements and therefore conditions to receiving MS funds under CAP. Expanding the cross-compliance framework to include a GAEC standard that makes specific mention of the protection of semi-natural habitats

All CAP Options. MARKET FRICTION: CAP supports identification and mapping of biodiversity within farmland (e.g. HNV farmland) which improves efficiency of targeting funds to achieve environmental objectives in general, and NNL.

FP

FP 1. Develop a rigorous standardised accountable forest monitoring and evaluation system

MARKET FRICTION: This would improve information in relation to monitoring and evaluating condition of forests as well as planning its management - this may facilitate the application of MBI’s (e.g. offsets) in relation to forestry.

FP 2. Include targets that contribute to NNL of biodiversity and ecosystems within Sustainable Forest Management in the new EU Forest Strategy and Action Plan

BP

BP 1. Ensure all EU funds, especially those related to regional policy, transport and energy fully integrate requirements relating to biodiversity and ecosystem services and are subject to biodiversity proofing procedures

PRICE BASED: This would increase investment in biodiversity and Green Infrastructure by increasing the share of expenditure allocated to biodiversity under the European Regional Development Fund (ERDF) and Cohesion Fund. MARKET FRICTION: This would use the European Social Fund (ESF) to support awareness raising and capacity building of both managing authorities and beneficiaries.

Of

Of 1. EU Offsetting framework and implementation plan to promote agreed types of offsetting according to defined standards

MARKET FRICTION: This would encourage the wider use of offsetting by MS through defining an EU-wide framework according to defined standards and principles

Of 2. EU Framework to promote offsetting of residual impacts of EU funded development projects on scarce biodiversity and priority ecosystem

QUANTITY BASED: This would make offsets a requirement for all EU funded projects that have a significant impact on scarce biodiversity and ecosystem services


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services. (Linking with ELD and BP)

MBI

MBI 1. EU Guidance on the potential role of Market Based Instruments to deliver No Net Loss

PRICE-BASED, MARKET-BASED & MARKET FRICTION: This would encourage the wider use of market-based instruments by MS.

MBI 2. Development of an EU ‘No Net Loss’ Label

MARKET FRICTION: This would improve consumer information and enable producers to place premiums on NNL products

In order to provide an initial assessment of the potential impacts of guidance on MBIs, this assessment will cover (i) where progress on MBIs is possible (ii) where there is good practice (cases to learn from) (iii) what are good principles of using MBIs to achieve NNL for the MBI’s identified in Table 13-2.

MBI 1: EU Guidance on the potential role of Market Based Instruments to deliver No Net Loss

Environmental taxes

Potential for progress

Specific opportunities exist for guidance on:

Where taxes / charges could prove useful, for example doing more on: o cost recovery for water under the WFD as it will lead to more efficient use of

water and hence keeps more water for the ecosystem so this could be a useful instrument to support aquatic / wetland biodiversity;.

o litter fees and product charging (e.g. plastic bags) as this can help reduce the likelihood of marine litter and hence avoid pressures on the marine environment;

o forest stumpage fees and requirements to plant another tree to replace one cut down;

o land use / land use change taxes which could in principle help to reduce land take from urban sprawl;

o waste disposal taxes as this reduces incentive to emit/dump waste with widespread negative impacts on biodiversity; and

o agricultural taxes on pesticides and fertilisers with the intention of reducing their use and subsequent pressure on the condition of the water environment.

Where can tax incentives help encourage NNL - lessons from practice e.g. agricultural taxes, land use / land use change tax, fisheries and marine tax and freshwater taxes in the EU.

How taxes on activities involving pollution or resource use could generate revenues that could be hypothecated to fund restoration and enhancement measures and hence deliver no-net-loss. Structures for hypothecation have been successfully developed in


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Member States through independent bodies that oversee disbursement (e.g. Entrust127 for the UK Landfill Tax Credit Scheme). Possible examples might include a tax on:

o peat or mineral extraction, with some or all of the proceeds used to fund site restoration;

o logging with some or all revenues used to fund forest creation/restoration; o fertiliser use, with the funds raised used to restore grasslands and/or other

farmland habitats; o pesticide use, used to finance action to enhance biodiversity in agricultural

landscapes; o landfill of waste, used to restore habitats on or adjacent to former landfill sites

and/or to fund investments in waste minimisation and recycling; and o development, used to fund habitat restoration or re-creation schemes that offset

the impact of development on biodiversity.

A raising of the bar of protection for biodiversity across the EU single market by outlining the case for minimum standards of environmental quality across Member States for MBI’s e.g. pollution taxation;

Sharing of experience/knowledge across EU Member States with a number of countries having set up commissions or committees on (green) fiscal reform including Belgium, France and Portugal (IEEP, 2014).

The design, implementation and co-ordination of charges for damaging activities e.g. forest loss and plastic bags (cause of marine litter).

Cases to learn from

Land use/change taxes - a limited number of countries apply charges on land use changes (e.g. Croatia, Czech Republic, Poland) and land value taxes (e.g. Denmark and Estonia) (IEEP, 2014). The potential for environmental taxation to influence environmental outcomes through land prices was reviewed by the EEA (EEA, 2009). This highlighted that taxes and tax relief are, along with urban development pressures, the main influences on land prices in Europe. Using taxation as an instrument of land use policy to shape land use patterns has been debated in at least Germany and Holland. Their discussions suggest that economic instruments such as taxes could be used as a supplement, as opposed to a replacement for, traditional land use planning instruments, and their practical application appears to face some practical constraints, such as in defining the tax base (EEA, 2009).

Fisheries taxes - taxes have been introduced which directly impact on fisheries and marine biodiversity including recreational and commercial fishing charges/permits, fishery management fees, and nature protection non-compliance fees. In some countries, revenues from these charges are used for marine protection, conservation or sustainable management of fisheries (IEEP, 2014).

127

http://www.entrust.org.uk/

http://www.entrust.org.uk/


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Marine taxes - waste fee systems in ports, NOx emissions and oil release charges on ships, fees for dumping at sea and levies on marine aggregates all have an important impact on the marine environment and biodiversity (IEEP, 2014). The UK will introduce a plastic bag charge of 5p in October 2015. Discarded plastic bags are a very visible form of littering and can cause injury to marine wildlife and in 2013 supermarkets gave out over 8 billion or 57,000 tonnes of single-use carrier bags across the UK (Defra, 2015).

Water pricing - water pricing cost recovery under the Water Framework Directive. Below-cost pricing of water provision can lead to over-use and wastage, potentially leading to falling water tables (aquifer levels) and saltwater intrusion, or increased pollution (e.g., pesticides) with impacts on biodiversity (ten Brink et al, 2014)

Agricultural taxes - a handful of countries have implemented pesticide and fertiliser taxes. Denmark and Norway have both had pesticide taxes in place since the 1980’s. Denmark’s tax was initially based on the value of pesticide sales and Norway’s on a percentage of the price. The tax bases in both countries have subsequently been changed and replaced by a differentiated tax taking account of the impact of different products on health and the environment (Tucker et al., 2014). Sweden’s tax on nitrogen fertiliser was based on a percentage of the price in 1984 but has been based on weight since 1992. Some of the tax revenues have been used to fund research and environmental improvements in the agricultural sector (Tucker et al, 2014).

Good principles

Good principles of environmental taxation that can contribute to achieving NNL include: (i) ensuring that taxes are well targeted to minimise biodiversity loss, with the tax base being closely aligned with impacts on biodiversity; (ii) avoiding perverse incentives; (iii) tax should be paid for by those responsible for the biodiversity impacts in line with polluter pays principle; (iv) tax should be set high enough to provide a clear price signal to those with greatest impacts on biodiversity to invest in the abatement of impacts and to innovate to avoid these costs; and (v) to compensate for damage to biodiversity and the environment establish independent bodies to disburse revenues from taxes should be hypothecated to environmental enhancement projects.

Environment tax credits (subsidies)



How activities that are detrimental (i.e. have negative externalities) and which

currently have taxes placed on their use, could have a tax credit placed on them for

biodiversity. Possible examples might include a tax credit on:

o Landfill taxes as in the UK for landfill operators funding environmental projects;

o Aggregates tax as in the UK for aggregates operators funding environmental projects;

o Corporation tax for firms funding environmental projects;


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How activities that are detrimental (i.e. have negative externalities) for biodiversity, but receive tax credits for other reasons (generally socio-economic), could have those tax-credits reformed in a way that maintains the socio-economic purpose but avoids encouraging detriment to biodiversity. For example, both agriculture and fisheries benefit from reduced rates of diesel taxation in many members Member States. Higher energy mechanised farming and fishing techniques are generally more damaging to biodiversity, and there are already several other ways that subsidies are paid to these sectors.

Cases to learn from

In the UK, the Landfill Communities Fund and the Aggregates Tax Sustainability Fund (the latter until 2011, after which the Fund was withdrawn) have both been used to fund projects that benefit biodiversity and ecosystems. The former is a grant scheme supporting environmental enhancements in the vicinity of landfill sites (eftec, 2010). Operators are able to reduce their tax liability by funding local environmental enhancement projects (Tucker et al, 2014). Since the introduction of the Landfill Communities Fund the total amount donated has been almost £1.2 billion (€1.49 billion) (HMRC, 2014), although this includes social as well as environmental projects (Entrust, 2013).

Good principles

Good principles of environmental tax credits (subsidies) include (i) projects for which funds are hypothecated should have a biodiversity focus even when used as compensation for more general environmental impacts as this can achieve net gains in biodiversity (Tucker et al, 2014) (ii) tax credit should be set high enough to provide a clear price signal to those with greatest impacts on biodiversity to invest in the abatement of impacts and to innovate to benefit from these cost savings (iii) good monitoring of activities to ensure the claimed biodiversity outcomes are achieved (i.e. avoid fraud) (iv) be clear on who is eligible for tax credit and avoid adverse distributional impacts (v) avoid perverse incentives where other adverse impacts occur in order that biodiversity benefits are delivered.

Payments for ecosystem services (PES)



How the Common Agricultural Policy (CAP) can be usefully reformed to reduce its negative impacts on biodiversity. Where subsidies are helpful (Pillar II) and harmful to biodiversity (Pillar I) including use of existing reform tools (e.g. ten Brink et al, 2012);

Scope to enhance effectiveness for biodiversity in the UK – for example by increasing uptake of in-field options compared to boundary options in ELS (GHK, 2012)

Co-ordinate EU wide research into improving understanding of: o what institutions, datasets and regulatory frameworks are required to bring

buyers and sellers of ecosystem services together; o gaps in scientific evidence about ecosystem services, especially given the

location-specific nature of many services and hence the need for technical


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information and evidence about causal relationships at particular sites, which can be costly to obtain (GHK, 2012);

o where PES works and where it is less effective – it can potentially be applied to a variety of ecosystems – including forests, wetlands and marine systems, either through publicly funded schemes or through negotiated arrangements involving private buyers (such as water companies) (Tucker et al, 2014);

o what barriers exist to the uptake and expansion of PES schemes and how can these best be overcome - knowledge gaps, regulatory and institutional structures, and transactions costs (GHK, 2012);

o reducing monitoring/verification costs of PES, which can be 15-30% of PES costs, and are important to getting trust in a contract, and attracting different sources of funding, including the potential for EC funding (subsidy).

How to facilitate and encourage greater private sector involvement in schemes beyond water companies, potentially linking to biodiversity offsets and habitat banking. Private sector led PES have advantages over publically funded subsidies for ecosystem services as they reduce moral hazard issues (i.e. government knows less than the land owner about whether environmental improvements are being delivered so there may be an incentive for land owners to behave inappropriately).

Cases to learn from

Pillar II of CAP involves agri-environment scheme payments (AES) to farmers in response for environmentally beneficial land management. This is the most prominent example of PES in the EU at present. Some successful schemes have been brought forward which either blend public and private funds within a PES or are a clear cut private sector user-financed PES scheme:

Vittel (bottled mineral water company), France pays local farmers to adopt less intensive farming techniques (e.g. outdoor grazing) which use less fertiliser inputs and to plant trees to improve soil conditions and promote filtration services (IIED, 2006).

Sustainable Catchment Management Project (SCaMP) in North West England, which supports an integrated approach to catchment management designed to meet biodiversity and water quality objectives and was funded using £9 million (€10.4 million) of funds from United Utilities (water company) (Defra, 2011);

South West Water (water company) funds to the Mires on the Moor project (£4 million (€4.6 million)) and ‘Thinking Upstream’ programme (£9.1 million (€10.5 million) in total up to 2015) in England (Defra, 2011);

PES pilots in the UK for which private sector PES buyers include water companies, other corporate buyers, developers, recreational visitors and local tourism business (Defra, 2014).

Good principles

Good practice principles of PES include: (i) linking values (prices) to a primary ecosystem service or bundle of services; (ii) ensuring ‘appropriate’ values on ecosystem services or appropriate mechanisms (e.g. reverse auctions) to induce buyers and sellers to enter market


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(Defra, 2014); (iii) developing appropriate scientific monitoring / evidence to provide sufficient certainty of ecosystem service provision; (iv) ensuring reform of perverse subsidies within a market (e.g. ten Brink, 2014); (v) importance of advice and training for delivery, which could involve advice from government, but also NGOs, wildlife trusts and others (GHK, 2012); (vi) multi-annual contracts helping to provide the certainty required to maintain and manage the farmed environment (GHK, 2012); (vii) scope of PES (e.g. HLS) should focus more on outcomes than following prescriptions to enhance the programme’s effectiveness.

Experience also shows that successful PES schemes usually build on existing social capital established with the ’sellers’ of ecosystem services on the ground, often as a result of the efforts of a third sector organisation such as an NGO, who are seen as an independent broker.

Bio-carbon markets


There is a great deal of opportunity in expanding bio-carbon markets as a route to getting a monetary return from conservation activities related to specific ecosystem services they provide. Specifically progress can be made on:

Expanding bio-carbon markets to cover: o EU Member States where these markets do not currently operate widely if at

all; o Demand from outside EU Member States;

Expanding bio-carbon credits to cover: o Carbon sequestration (climate regulation) provided by Member States’

ecosystems beyond peatland and woodland; o Other ecosystem services provided by Member States’ ecosystems beyond

carbon;

Expanding the coverage of existing carbon markets. For example, the potential net present value of carbon sequestration if upland peatlands in England are stored (e.g. re-wetted) is estimated by eftec et al (2014) to be approximately £560 million (€694.4 million) over 40 years (NPV, 40years). In other words, the cost of investing in peatland restoration is exceeded by the value of huge carbon savings expected. In addition, the net biodiversity benefit of this investment is estimated to be valued at around £300 million (€372 million) over 40 years (NPV, 3.5% discount rate) (eftec et al, 2014);

Developing synergies between ‘bio-carbon’ markets and the ‘industrial’ carbon market of the EU ETS;

Measuring impacts on biodiversity – this will involve the transformation of certain properties of an ecosystem into standard metrics – such as cubic meters of clean water for watershed services (United Nations University, 2011).

Cases to learn from

The Woodland Carbon Code (WCC) in the UK is the voluntary standard for woodland creation projects in the UK which generate verifiable Woodland Carbon Units


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(WCUs) that can be sold. Independent certification to the WCC standard provides assurance, clarity and consistency about the carbon savings of these sustainably managed woodlands. The amount of carbon dioxide predicted to be removed from the atmosphere by woodland planting projects registered under the WCC passed 1 million tonnes in March 2012. Credits that have validated using the WCC have been on sale since March 2014 (FC, 2015). The UK government allows UK companies to claim any support for Woodland Carbon Code projects against their annual emissions reporting – the lone case of a national government allowing voluntary offsetting claims against mandatory emissions reporting (Ecosystem Marketplace, 2014).

Also in the UK, the Peatland Code is the voluntary standard for peatland restoration projects in the UK that want to be sponsored on the basis of their climate and other benefits. It provides standards and robust science to give business supporters confidence that their financial contribution is making a measurable and verifiable difference to UK peatlands. At this stage the Pilot Phase Code is designed to facilitate business sponsorship motivated by corporate social responsibility; it is not currently intended for use in formal offset schemes, corporate carbon reporting or to be traded on international carbon markets (IUCN, 2015).

“Italy's Carbomark was launched as a pilot action aimed at creating a local voluntary carbon market. The market service started in September 2010, when local small and medium-sized enterprises had the opportunity to buy local carbon credits to offset their emissions. The market focuses on local mitigation activities in two regions in northeast Italy, does not include activities taking place in other countries and favours the trading of credits of agroforestry activities” (Ecosystem Marketplace, 2014).

The Gold Standard Foundation certifies its bio-carbon projects on the basis of wider co-benefits beyond carbon mitigation. In 2014, there were 26,000 Gold Standard annual carbon credits from 5 afforestation/reforestation projects delivering €5 million of biodiversity and €1 million of employment co-benefits (The Gold Standard Foundation, 2014).

Good principles

Good principles of bio-carbon markets include: (i) robust monitoring and verification approaches; (ii) certified metrics to ensure consistency; (iii) registry’s for tracking changes of ownership of each tonne of carbon e.g. UK Market Environmental Registry; and (iv) “group validation” of projects which allows several projects (e.g. tree-planting) to be validated together enabling cost savings through economies of scale. MBI 2: EU guidance on the potential role of Market Based Instruments to deliver No Net Loss

Where progress is needed

In order to help to stimulate the development of voluntary no-net loss certification and labelling schemes, the following is needed:


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Agree the scope of products over which the NNL label is applicable/possible and label design and marketing to raise consumer awareness;

Develop a methodology to assess, monitor and verify the impact on biodiversity of companies and their products, including impacts throughout their supply chains and agree whether the label will be for products with:

o No Net Loss of biodiversity; or o Net gain in biodiversity and if so how to identify the best performing

products i.e. those that go beyond NNL;

Agreement on metrics to assess the impact on biodiversity of companies and their products – this will involve the transformation of certain properties of an ecosystem into standard metrics – such as tonnes of carbon for climate regulation, cubic meters of clean water for watershed services (United Nations University, 2011);

Exploring the potential to incorporate the NNL standard into existing EU labelling and certification schemes that include impacts on biodiversity to avoid over burdening consumers with labels (e.g. include NNL as part of the MSC, FSC, Fairtrade standards);

Develop links to public procurement which is a customer driven means of motivating innovation (towards NNL) (Ecofys, 2014). Seven EU Member States (Austria, Denmark, Finland, Germany, Netherlands, Sweden and UK) consistently have more tenders with green criteria than other Member States (TEEB, 2011);

Gain Member State approval as EU level labelling (as opposed to Member State level) can prevent disparate national legislations on the environmental performance (i.e. achieving NNL standard) of these products from becoming obstacles to the intra-EU trade;

How EU action on NNL label can create economies of scale and therefore limit transaction costs of labelling which can be high, especially for smaller market sectors, and is exacerbated by greater numbers of labels.

Good practice (cases to learn from)

The EU Ecolabel scheme is a voluntary labelling scheme designed to help consumers identify products with the lowest environmental impact throughout their lifecycle, from the extraction of raw material through to production, use and disposal (Defra, 2013; EC, 2015a). “Companies who believe that their products can meet the demanding Ecolabel standard must have this independently assessed and verified before being allowed to carry the distinctive EU Ecolabel Flower logo” (Defra, 2013). A range of different voluntary labels related to the environmental impact of food also exist in the EU, these often focus on single environmental issues like ‘organic’. There is increasing interest in reducing the environmental impact of food across a range of environmental indicators to improve the sustainability of our food supply (see The Foresight project Global Food and Farming Futures report). The ENVIFOOD Protocol is a scientifically-reliable harmonised EU methodology for the environmental footprint of food and drink products (Food Drink Europe, 2014; European Food Sustainable Consumption and Production Round Table, 2013).


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Certification and labelling of green climate bonds exists for agriculture and forestry worth $4.2 billion. 95% of these are from sustainable paper and pulp manufacturers and sustainable forest management. A recent bond by Swedish forest products company SCA is the first labelled bond linked to certified forests, and includes a commitment to increase forest cover by 1% each year. Bonds are rarely used to raise finance in this sector – of the 1,522 companies in the global forestry & paper plantations or fishing farming sectors, only 139 have bonds outstanding. EU labels also exist in the following areas which have indirect impacts on biodiversity:

Ecodesign and Energy Labelling directives (mandatory labelling) aim to reduce the environmental impact of Energy-using Products, including the energy consumption throughout their entire life cycle (EC, 2015b);

EU tyre labelling regulation to increase safety, promote fuel-efficient and safe tyres, and decrease noise levels (HM Government, 2014). Traffic noise has negative impacts of biodiversity.

Since 1990, the number of (voluntary) “eco-labels” globally (from 246 countries/25 business sectors) has increased from 50 to over 350 in 2010 (CBD, 2012). This includes standards and labels which exist in the EU including for:

Agriculture, e.g. Fairtrade labelling which includes environmental impacts, for example it requires proof that production has not taken place on previously forested land (CBD, 2012); in 2015, DG MARE finalised a study and a public consultation on EU-wide eco-label for fisheries and aquaculture products128.

Forestry, e.g. Forest Stewardship Council trademark which sets standards for the management of forest resources and associated lands to meet the social, economic, ecological, cultural and spiritual needs of present and future generations (FSC, 2015);

Fisheries and aquaculture, e.g. Marine Stewardship Council which is the world's leading certification and eco-labelling program for sustainable seafood

There are also examples from outside the EU of labelling that is directly related to biodiversity impact. For example, in South America a “bird-friendly” natural grasslands beef certification and labelling scheme has been developed by the Southern Cone (which comprises Argentina, Chile, Paraguay, Uruguay and part of Brazil) Grassland Alliance. Exports with this certification have been made to the European market enables (BirdLife International, 2014).

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ANNEX 3: OFFSETTING AMOUNTS AND COSTS UNDER OF2

3.1: Estimation of the amount of offsetting required by habitat type under offsetting policy measure Of 2

Assumptions: Like-for-like, except arable land and permanent crops are offset with semi-natural vegetation. Ratios, risk multiplier & time multiplier based on Defra. Forest offsetting takes place through habitat creation only (taking 100 years)

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Non-irrigated arable land 191,725 0.025 0.05 SN grasslands / shrublands 0.33 166

Pasture 256,425 0.025 0.10 SN grasslands / shrublands 0.33 444

SN grasslands / shrublands 66,150 0.025 1.00 SN grasslands / shrublands 1.00 1.5 1.4 3,473 4,107

Permanent crops 27,575 0.025 0.05 SN grasslands / shrublands 0.33 24

Forest 177,150 0.025 0.90 Forest 1.00 1.0 31.2 124,359 124,359

Wetlands 750 0.025 1.00 Wetlands 1.00 1.0 1.4 26 26

Water bodies 750 0.025 1.00 Water bodies 1.00 1.0 1.2 23 23

Coastal habitats 750 0.025 1.00 Coastal habitats 1.00 1.5 2.0 56 56

TOTAL 721,275 127,937 634 128,571

Sources: Bau losses to development (Ha 2010 - 2020): Tucker et al, 2014, T3.7 & Conway et al, 2013 for wetlands, waterbodies & coastal habitat (Table 3.6, and mid-point of range taken and multiplied by 10. Proportion of EU development projects to be offset: Scenario. Proportion with scarce biodiversity: Judgement (see text). Offset ratio, risk multiplier & time multiplier: Defra (2012) Biodiversity offsetting pilots - guidance for offset providers.

Notes: 1. Impacts do not include those from extractive industries, but these will not be EU financed so would not be covered by this measure 2. Offset delivery times of: 5 years: water bodies; 10 years: wetlands; 20 years: coastal habitats & semi-natural grasslands; 100 years: forests (see text) 4. Time preference based on an annual discount rate of 1.035


342

Offset Option 2: Scenario B comparison

Hab

itat

typ

e

BaU

loss

es

to

de

velo

pm

en

t (H

a

20

15

- 2

02

0)

Pro

po

rtio

n o

f EU

de

velo

pm

en

t

pro

ject

s to

be

off

set

Pro

po

rtio

n w

ith

scar

ce b

iod

ive

rsit

y

Off

set

wit

h

Off

set

rati

o

Ris

k m

ult

iplie

r

Tim

e m

ult

iplie

r

Like

-fo

r-lik

e o

ffse

t

de

live

red

No

n-l

ike

-fo

r-lik

e

sem

i-n

atu

ral

vege

tati

on

de

live

red

Tota

l de

live

red





Forest 177,150 0.050 0.90 Forest 1.00 1.0 31.2 248,719 248,719




TOTAL 721,275 255,874 1,268 257,143

Sources and notes: see above


343

Offset Option 2: BaU Comparison

Hab

itat

typ

e

BaU

loss

es

to

de

velo

pm

en

t (H

a

20

15

- 2

02

0)

Pro

po

rtio

n o

f EU

de

velo

pm

en

t

pro

ject

s to

be

off

set

Pro

po

rtio

n w

ith

scar

ce b

iod

ive

rsit

y

Off

set

wit

h

Off

set

rati

o

Ris

k m

ult

iplie

r

Tim

e m

ult

iplie

r

Like

-fo

r-lik

e o

ffse

t

de

live

red

No

n-l

ike

-fo

r-lik

e

sem

i-n

atu

ral

vege

tati

on

de

live

red

Tota

l de

live

red





Forest 177,150 0.010 0.90 Forest 1.00 1.0 31.2 49,744 49,744




TOTAL 721,275 51,175 254 51,429



344

Assumptions: Like-for-like, except arable land and permanent crops are offset with semi-natural vegetation. Ratios, risk multiplier & time multiplier based on Defra. Forest offsetting takes place through 50% restoration (taking 10 years) and 50% habitat creation (taking 100 years).

Offset Option 2: Scenario A H

abit

at t

ype

BaU

loss

es

to

de

velo

pm

en

t (H

a

20

15

- 2

02

0)

Pro

po

rtio

n o

f EU

de

velo

pm

en

t

pro

ject

s to

be

off

set

Pro

po

rtio

n w

ith

scar

ce b

iod

ive

rsit

y

Off

set

wit

h

Off

set

rati

o

Ris

k m

ult

iplie

r

Tim

e m

ult

iplie

r

Like

-fo

r-lik

e o

ffse

t

de

live

red

No

n-l

ike

-fo

r-lik

e

sem

i-n

atu

ral

vege

tati

on

de

live

red

Tota

l de

live

red

Non-irrigated arable land 191,725 0.025 0.05 SN grasslands / shrublands 0.33

166

Pasture 256,425 0.025 0.10 SN grasslands / shrublands 0.33

444

SN grasslands / shrublands 66,150 0.025 1.00 SN grasslands / shrublands 1.00 1.5 1.4 3,473

4,107

Permanent crops 27,575 0.025 0.05 SN grasslands / shrublands 0.33

24

Forest 177,150 0.025 0.90 Forest 1.50 1.0 16.7 99,846

99,846

Wetlands 750 0.025 1.00 Wetlands 1.00 1.0 1.4 26

26

Water bodies 750 0.025 1.00 Water bodies 1.00 1.0 1.2 23

23

Coastal habitats 750 0.025 1.00 Coastal habitats 1.00 1.5 2.0 56

56

TOTAL 721,275

103,424 634 104,058



345

Offset Option 2: Scenario B comparison

Hab

itat

typ

e

BaU

loss

es

to

de

velo

pm

en

t (H

a

20

15

- 2

02

0)

Pro

po

rtio

n o

f EU

de

velo

pm

en

t

pro

ject

s to

be

off

set

Pro

po

rtio

n w

ith

scar

ce b

iod

ive

rsit

y

Off

set

wit

h

Off

set

rati

o

Ris

k m

ult

iplie

r

Tim

e m

ult

iplie

r

Like

-fo

r-lik

e o

ffse

t

de

live

red

No

n-l

ike

-fo

r-lik

e

sem

i-n

atu

ral

vege

tati

on

de

live

red

Tota

l de

live

red


332


889


8,214


48

Forest 177,150 0.050 0.90 Forest 1.50 1.0 16.7 199,692

199,692


53


45


113

TOTAL 721,275

206,848 1,268 208,117



346

Offset Option 2: BaU Comparison

Hab

itat

typ

e

BaU

loss

es

to

de

velo

pm

en

t (H

a

20

15

- 2

02

0)

Pro

po

rtio

n o

f EU

de

velo

pm

en

t

pro

ject

s to

be

off

set

Pro

po

rtio

n w

ith

scar

ce b

iod

ive

rsit

y

Off

set

wit

h

Off

set

rati

o

Ris

k m

ult

iplie

r

Tim

e m

ult

iplie

r

Like

-fo

r-lik

e o

ffse

t

de

live

red

No

n-l

ike

-fo

r-lik

e

sem

i-n

atu

ral

vege

tati

on

de

live

red

Tota

l de

live

red


66


178


1,643


10

Forest 177,150 0.010 0.90 Forest 1.50 1.0 16.7 39,938

39,938


11


9


23

TOTAL 721,275

41,370 254 41,623



347

3.2 Estimation of the total costs of offsetting under the BaU Scenario and offsetting policy option 2

Assumptions: Like-for-like, except arable land and permanent crops are offset with semi-natural vegetation. Ratios, risk multiplier & time multiplier based on Defra. Forest offsetting takes place through 50% restoration (taking 10 years) and 50% habitat creation (taking 100 years).

BaU offsetting – Typical costs

Habitat type

Habitat restoration / re-creation (1 off cost)

Habitat management to 2030

Sub-total practical costs to 2030

Financial costs to 2030

Transaction costs to 2030

ANNUAL TOTAL PRIVATE COSTS to 2030

TOTAL PRIVATE COSTS to 2030

Public admin costs per year

Public admin costs to 2030

Units € € € € € €/yr € €/yr €

Semi-natural grasslands and shrublands

1,971,408

6,899,927.90

8,871,336

88,713

2,661,401

968,454

11,621,450

73,928

887,134

Forest

199,692,338

215,667,724.50

415,360,062

4,153,601

124,608,019

45,343,473

544,121,681

3,461,334

41,536,006

Wetlands

52,500

50,400.00

102,900

1,029

30,870

11,233

134,799

858

10,290

Water bodies

270,000

16,200.00

286,200

2,862

85,860

31,244

374,922

2,385

28,620

Coastal habitats

22,500

54,000.00

76,500

765

22,950

8,351

100,215

638

7,650

TOTAL

202,008,745

222,688,252

424,696,998

4,246,970

127,409,099

46,362,756

556,353,067

3,539,142

42,469,700

Sources / notes:

Habitat restoration / re-creation (1-off cost): Offset area (from Annex 3.1) x typical offset restoration / creation costs from Table 14-7. Habitat management to 2030: Offset area x typical annual offset management costs from Table 14-7 for 12 years (i.e. assuming average delivery in 2018). Financial costs to 2030: sub-total practical costs x 1% (Table 14-7). Transaction costs to 2030: sub-total practical costs x 30% (Table 14-7). Public administration costs to 2030: sub-total practical costs x 1o% (Table 14-7).


348

Offset Option 2: Scenario A – Typical costs

Habitat type










Units € € € € € €/yr € €/yr €

Semi-natural grasslands and shrublands 4,928,520 17,249,819.74 22,178,340 221,783 6,653,502 2,421,135 29,053,625 184,819 2,217,834

Forest 499,230,844 539,169,311.25

1,038,400,155 10,384,002 311,520,047 113,358,684

1,360,304,203 8,653,335 103,840,016

Wetlands 131,250 126,000.00 257,250 2,573 77,175 28,083 336,998 2,144 25,725

Water bodies 675,000 40,500.00 715,500 7,155 214,650 78,109 937,305 5,963 71,550

Coastal habitats 56,250 135,000.00 191,250 1,913 57,375 20,878 250,538 1,594 19,125

TOTAL 505,021,864 556,720,631

1,061,742,495 10,617,425 318,522,748 115,906,889

1,390,882,668 8,847,854 106,174,249

Sources / notes: see above


349

Offset Option 2: Scenario B – Typical costs

Habitat type










Units € € € € € €/yr € €/yr €

Semi-natural grasslands and shrublands 9,857,040 34,499,639.48 44,356,679 443,567 13,307,004 4,842,271 58,107,250 369,639 4,435,668

Forest 998,461,688

1,078,338,622.5

0

2,076,800,310 20,768,003 623,040,093 226,717,367

2,720,608,406 17,306,669 207,680,031

Wetlands 262,500 252,000.00 514,500 5,145 154,350 56,166 673,995 4,288 51,450

Water bodies 1,350,000 81,000.00 1,431,000 14,310 429,300 156,218 1,874,610 11,925 143,100

Coastal habitats 112,500 270,000.00 382,500 3,825 114,750 41,756 501,075 3,188 38,250

TOTAL 1,010,043,727 1,113,441,262

2,123,484,989 21,234,850 637,045,497 231,813,778

2,781,765,336 17,695,708 212,348,499

Sources / notes: see above


350

3.3 Estimates of the Total Economic Value of ecosystems in Europe

Source: Van der Ploeg, S., Y. Wang, T. Gebre Weldmichael and R.S. de Groot (2010) The TEEB Valuation Database – a searchable database of 1310 estimates of monetary values of ecosystem services. Foundation for Sustainable Development, Wageningen, The Netherlands.

Biome Ecosystem Country Year Of Validation

ValueType Value Unit Currency

Standardised to EU/ha/yr

at year of validation

rate Current

(2015) value

Cultivated Croplands Spain 2004 Annual 2140 USD/ha/yr US Dollar

1,723

1,723

Grasslands Temperate natural grasslands

Spain 2004 Annual 230 USD/ha/yr US Dollar

185

185

Forests [Temperate and Boreal]

Temperate forest general

Spain 2004 Annual 3789 USD/ha/yr US Dollar

3,050

3,050

Inland Wetlands Wetlands [unspecified] Europe 2003 Annual (Range)

38598 EUR/ha/yr Euro

38,598

38,598

Inland Wetlands Swamps / marshes Europe 2003 Annual 4129 EUR/ha/yr Euro

4,129

4,129

Inland Wetlands Peat wetlands Europe 2003 Annual 214 EUR/ha/yr Euro

214

214

Inland Wetlands Wetlands [unspecified] Spain 2004 Annual 28585 USD/ha/yr US Dollar

23,010

23,010

Inland Wetlands Riparian buffer Spain 2004 Annual 8359 USD/ha/yr US Dollar

6,729

6,729

Inland Wetlands Floodplains Europe 1995 Annual 374 EUR/ha/yr Euro

374

374

Median for wetlands

5,429

Fresh water Open water [general] Spain 2004 Annual 1890 USD/ha/yr US Dollar

1,521

1,521

Coastal wetlands Tidal Marsh Europe 2003 Annual 5734 EUR/ha/yr Euro

5,734

5,734



351

Biome Ecosystem Country Year Of Validation

ValueType Value Unit Currency

Standardised to EU/ha/yr

at year of validation

rate Current

(2015) value

4,112 4,112


5,475

5,475

Coastal wetlands Salt water wetlands Spain 2004 Annual 15147 USD/ha/yr US Dollar

12,193

12,193

Median for coastal wetlands

5,605


352

ANNEX 4: EVIDENCE OF THE COSTS OF OFFSETTING IN GERMANY

Case study provided by Prof. Wolfgang Wende, Marianne Darbi and Christian Stein (Technische Universität Dresden).

Introduction to the German case study evidence

Biodiversity offsetting in Germany is part of the mitigation hierarchy under the Impact Mitigation Regulation (IMR). This mandatory system builds on the provisions in the Federal Nature Conservation Act which sets the overall framework that is further elaborated in the nature conservation laws of the federal states. The IMR applies to all areas, scales of impact and sectors (excluding agriculture, forestry and fisheries). The German approach to impact mitigation provides decades of experience with the conceptual design and practical implementation of biodiversity offsets with the goal of achieving no net loss functionally and spatially. It has therefore been selected as a case study to inform the assessment of the potential costs of biodiversity offsets.

The costs of the implementation of the German IMR are broken down into two parts:

1. Offsets costs to developers

2. Offset costs to public authorities

Offset costs to developers

The German case study has taken into account that the implementation of the IMR is under the responsibility of the federal states (“Bundesländer”, Germany consists of 16 federal states, thereof 13 territorial states and 3 city states). As a result the organization and procedures vary from one state to another (e.g. regarding valuation techniques, habitat banking and credits). This case study concentrates on the offset practice in the federal state of Hesse. This has been chosen as an example of the German system because it is rather homogenous and has a good data availability.

The state of Hesse covers an area of 21,114 square kilometres and has a population of 6.088 million129

. The administrative division is organised in three regional districts (“Regierungsbezirke”): Kassel, Giessen and Darmstadt, and twenty-one counties (“Landkreise”) (see Figure A4.1).

129

(as of October 2014), Statistische Ämter des Bundes und der Länder, http://www.statistikportal.de/Statistik-

Portal/de_zs01_he.asp accessed: June 23, 2015


353

Figure A4.1: Location of the state of Hesse (left), division into three regional districts (middle) and 21 counties (right) (Source: Wikimedia creative commons)130

The analysis builds on the compensation land cadastre (i.e. map and register of property) in Hesse that is applied on a common state-wide platform. The nature conservation authorities are committed to enter all compensation areas into the NATUREG (“Naturschutzregister”) land cadastre. For each impact the location, the size and the type of all corresponding compensation measures have to be recorded. Based on these data it is possible to summarize the total area of all compensation sites differentiated by each type of measure (e.g. afforestation, development of high nature value grasslands).

Table A4.1 presents the total area of offsets (land parcels) that have been recorded in NATUREG between 1992 and 2010 for each of the three districts and total for the state of Hesse. However, the coverage of the recording of compensation sites in NATUREG is incomplete (Battefeld 2012) – with an approximate coverage of 80% in the district of Kassel and 60% in the districts of Giessen and Darmstadt. Based on this, the Hessian Ministry of the Environment, Rural Affairs and Consumer Protection estimated the area used for offsets at an average of 1,633 ha per year (in the period from 1992 to 2010) in total in the state of Hesse. However, the trend is declining, and therefore the current annual area for offsets in the state of Hesse is thought to be approximately 1,000-1,500 ha (Battefeld 2012).

130

https://commons.wikimedia.org/wiki/File:Locator_map_Hesse_in_Germany.svg?uselang=de, https://de.wikibooks.org/wiki/Datei:Rps_hessen.png and https://de.wikibooks.org/wiki/Datei:Map_of_Hesse_with_districts_%28with_numbers%29.svg

http://www.dict.cc/englisch-deutsch/summarize.html

http://www.dict.cc/englisch-deutsch/differentiated.html

https://commons.wikimedia.org/wiki/File:Locator_map_Hesse_in_Germany.svg?uselang=de

https://de.wikibooks.org/wiki/Datei:Rps_hessen.png

https://de.wikibooks.org/wiki/Datei:Map_of_Hesse_with_districts_%28with_numbers%29.svg


354

Table A4.1: Area of offsets in the federal state of Hesse (recorded in NATUREG between 1992 and 2010 and estimated)

Area of offsets recorded in NATUREG (land parcels) (1992-2010)

District Kassel

District Gießen

District Darmstadt

Total state of Hesse

Area in ha, NATUREG 5,878 3,534 9,737 19,150

Coverage of the recording 80% 60% 60%

Estimated area based on random samples in ha

7,300 5,900 16,200 29,400

Estimated area of offsets per year in ha 406 328 900 1,633

Distribution by district 25% 20% 55% 100%

Source: Battefeld (2012)

Table A4.2 shows the proportion of five different types of compensation measures of the total offset area recorded in NATUREG (in percent and hectare), namely afforestation, planting of trees and woods, seeding of grasslands, creation and maintenance of water bodies and restoration/maintenance.

Table A4.2: Proportion of types of compensation measures in the federal state of Hesse (recorded land parcels in NATUREG between 1992 and 2010 and estimated)

Types of Compensation measures

Proportion of total Area

recorded in NATUREG

Area recorded in NATUREG in ha (1992-2010)

Total Average per year

Afforestation 13 % 2,490 137

Planting of trees and wood 27 % 5,171 286

Seeding of grasslands/ succession areas 22 % 4,213 233

Creation and maintenance of water bodies 20 % 3,830 204

Restoration/maintenance 18 % 3,447 186

Total 100 % 19,150 1,047

Source: Battefeld (2012)

Table A4.3 provides details on the specific compensation measures for each of the five types of compensation and gives a price range for their creation in Euro per hectare. This price range reflects the different costs depending on the baseline ecosystem/conditions of the site on which the offset is established. This is also dependent on what land is available for an offset.


355

Table A4.3: Cost per hectare for types of compensation measures

Types of compensation measures

Detailed compensation measures Costs per ha for detailed compensation measures

Afforestation (i.e. continuous forest parcels)

Coppice forest €17,015 - €155,742 €17,015 - 155,742

Mixed coppices €17,015 - €155,742

Forest conversion into sustained forest €47,956

Planting of trees and wood (i.e. single trees, hedgerows, orchards)

Broad-leaf bushes on fresh on fresh ground €8,240

€8,241 - €93,094

Orchards of high-trunk fruit trees €57,380 - €93,094

Bushes on try and warm ground with brambles €11,426

Hedges and field trees and scrubs €15,848 - €16,227

Pollarded trees €14,983


Extensively used fresh meadow €7,666 - €26,138

€1,231 - €168,129

Extensively used wet meadow €23,806 - €26,138

Fresh extensively used mountain meadow €18,910 - €168,129

Hydrophilic tall herbaceous vegetation €16,970 - €21,488

Fallow land €1,231 - €3,531

Mesophilic forb stands €1,231 - €4,669


Swift flowing rivers €19,172 - €62,999

€36,398 - €172,021

Silently flowing rivers €62,666 - €102,497

Oligotrophic standing water €37,984

Mesotrophic standing water €36,398 - €172,021

Temporary standing water €190,139

Restoration of nature Desealed areas €177,716 €177,716

Source: Freistaat Thüringen (2003).

Building on the data from Table A4-3 for each of the five types of compensation measures, Table A4.4 sets out the minimum, maximum and mean costs for each of these types per hectare and per year in the state of Hesse. On this basis, the total costs of offsets per year in the state of Hesse (based on 1992-2010 data) can be estimated to be approximately €150 million Euros (€70 million to €210 million). If one assumes that the federal state of Hesse represents an average of the (16) German federal states, a simple extrapolation the scale of the Federal Republic suggests that the total annual costs of offsetting in Germany are very approximately €2.5 billion Euros (€1.1 – 3.4 billion).

Table A4.4: Approximate costs of compensation measures for Hesse

Area per

year in ha

Costs per ha in € Costs per year in Hesse in €

min max mean min max mean

Afforestation 214 17,015 155,743 86,379 3,635,840 3,363,841 18,457,309

Planting of trees and wood

446 8,241 93,094 50,667 3,676,071 41,526,574 22,601,322


363 1,231 168,129 84,680 447,407 61,099,669 30,773,538


318 36,398 172,021 104,209 11,581,043 54,733,225 33,157,134

Restoration/maintenance

290 177,716 177,716 177,716 51,556,041 51,556,041 51,556,041

Total 1,633 - - - 70,896,402 212,279,350 156,545,345

Source: own calculation, data: Battefeld 2012, Freistaat Thüringen 2003.


356

Administrative costs to public authorities

Below, this case study estimates the administrative costs based on the actual staff number working on the implementation of the IMR.

Compensation measures under the IMR need to be approved by the competent nature conservation authority, i.e. mainly the lower nature conservation authorities at the level of the counties (note that there are 295 counties – “Landkreise” – and 114 cities in Germany with a total of 422 lower nature conservation authorities). In addition a number of sectoral planning authorities are concerned with IMR implementation, most notably road planning, waterways, railway and emission control.

Thus, for the estimation of administrative costs two aspects were chosen:

a) Administrative costs related to the implementation of the IMR in the lower nature

conservation authorities, and

b) Administrative costs related to the implementation of the IMR in road planning.

a) Administrative costs related to the implementation of the IMR in the lower nature conservation authorities

The estimation of the staff number in the lower nature conservation authorities concerned with the implementation of the IMR is based on an online survey (conducted from June 11 – September 07, 2015). Contact persons were identified for each of the 422 lower conservation authorities with their name, function and email address. These contact persons were then sent a personalized email invitation with a personalized link to participate in the survey. Figure A4.2 shows the form used in the survey.

The online survey was created with the professional software package SoSci Survey131. It included four consecutive questions:

1. How many staff members of your lower nature conservation authority deal with the

implementation of the IMR?

2. How many full-time equivalents does this number correspond to? (note that some

staff members work only part time and that most occupy other tasks in addition to

the implementation of IMR)

3. a) Is this capacity of staff sufficient?

b) If not, how many full-time equivalents would be necessary? 4. How many (full-time working) days per month does your lower nature conservation

authority spend on monitoring and follow-up?

The questions were formulated as open questions, with the exception of question 3a) with the possibility to choose between three options (yes, no, n/a). In addition a field for comments and remarks was included at the end.

131

Online platform available at https://www.soscisurvey.de/index.php?page=home&l=eng

https://www.soscisurvey.de/index.php?page=home&l=eng


357

Figure A4.2: Screenshot of the online survey among lower nature conservation authorities in Germany on the capacity of staff for the implementation of the IMR


358

The survey was intentionally designed as short and simple as possible to ensure an easy and timely participation. As a result, a response rate of 34% could be reached (137 participants) as is visible in Table A4.5. What can also be seen is that depending on the size and administrative capacity as well as the development intensity of the single counties the staff number concerned with IMR implementation, in full-time equivalents (FTE) ranges from less than 1 FTE (0.3) to 14 FTE, with a mean of 2.7 FTE per nature conservation authority (question 2). For all lower nature conservation authorities (422) in Germany this corresponds to 1,140 FTE.

However, less than 25% (32 participants) considered that the actual staff capacity for the implementation of IMR is sufficient, whilst more than 75% (102 participants) stated that it is not sufficient and additional staff resources are required (question 3a). The estimated number of full-time employees ranges from 0.5 – 15 FTE, with an average of 4.0 FTE needed (question 3b) as opposed to an average of 2.7 FTE actually in place. This corresponds to an estimated need of additional staff of almost 50%.

Table A4.5: Response rate of the survey among lower nature conservation authorities in Germany on the capacity of staff for the implementation of the IMR

Question 1: Employees

Question 2: Full-time

employees

Question 3b: full-time

employees needed

Question 4: Monitoring,

days per month

N 136 137 102 130

Minimum 1 0.3 0.5 0

Maximum 17 14 15 20

Mean 4.3 2.7 4.0 2.5

On average, most of the existing capacity (around 95%) is used for planning and approval (one-off administrative costs), whereas monitoring and enforcement account for little more than 5% of the total capacity. This equates to an average of 2.5 (full-time working) days per month or 30 (full-time working) days per year for monitoring and follow-up in each of the lower nature conservation authorities. Based on 220 working days per year for a full-time employee this means monitoring and enforcement accounts for little more than 0.14 FTE on average for each lower nature conservation authority. For all lower nature conservation authorities (422) in Germany this corresponds to approximately 60 FTE, of the total 1,140 FTE.

It is interesting to note that more than 30% of the respondents (43 participants) explained in the comment field that monitoring and enforcement could not be implemented or only in a very rudimentary manner. This suggests that the actual costs for monitoring and enforcement do not cover the real demand. The reason for this is the limited capacity that the lower nature conservation authorities have to carry out their numerous tasks (and as a matter of prioritization, there is often not sufficient time for monitoring and enforcement).

The estimation of costs is based on an average salary bracket E 10 TV-L for staff members of the lower nature conservation authorities. Based on this assumption Table A4.6 indicates the gross monthly salary in Euro per month and per year for a full-time employee as well as the


359

total cost for a full-time employee per year (including employer’s contribution to social insurance). The columns represent the development steps within the salary bracket (salary increase after 0, 1, 3, 6 and 10 years).

Consequently the total administrative costs for all (422) lower conservation authorities in Germany can be estimated to be approximately €60 million (€50 million – €70 million) per year, with as little as €3 million approximately spent on monitoring and follow-up.

Table A4.6: Estimated costs for staff working with impact mitigation regulation in lower nature conservation authorities in Germany (for the average salary bracket E 10)

E 10 development steps 1 2 3 4 5

Gross salary per month €2,868 €3,182 €3,421 €3,659 €4,113

Average gross salary per year132 €36,427 €40,466 €43,690 €46,914 €53,047

Employer’s contribution to social insurance (19.275 %)

€7,021 €7,800 €8,421 €9,043 €10,225

Total cost per year for one full-time employee

€43,448 €48,266 €52,111 €55,957 €63,272

Total cost for 422 lower nature conservation authorities with averaged 2.7 full-time employees (1140)

€49,504,998 €54,994,077 €59,375,555 €63,757,034 €72,091,899

Thereof:

planning and approval (1081) €46,967,617 €52,175,353 €56,332,259 €60,489,164 €68,396,826

Monitoring and enforcement (59) €2,563,450 €2,847,683 €3,074,564 3,301,444 3,733,037

Estimated demand:

Total cost for 422 lower natural authority’s with averaged 4.0,9 full-time employees needed

€73,340,738 €81,472,707 €87,963,786 €94,454,865 €106,802,814

b) Administrative costs related to the implementation of the IMR in road planning

Road planning is usually large scale and entails major impacts on the environment. Thus, (besides nature conservation) it accounts for the largest fraction of administrative costs relative to the implementation of the IMR in sectoral planning.

The information presented in Table A4.7 builds on an inquiry to the responsible persons in the road planning authorities of the federal states (personal communication with Prof. Wende). Six out of 13 territorial states were chosen as examples. As can be seen the number of full-time employees ranges from 8 – 51 FTE in different federal states, with a mean of 19 FTE per federal state. For all road planning authorities in Germany this corresponds to approximately 250 FTE.

As far as this could be estimated by the interviewees the relationship between one-off administrative costs (i.e. planning and approval) and monitoring and enforcement costs (i.e.

132 Including bonus payments


360

implementation and follow-up) was recorded as a percentage of the working time (rounded to steps of 10%). On average around 30% of the total capacity (74 FTE) accounts for planning and approval (one-off administrative costs), whereas follow-up (mainly implementation of measures and only a small percentage monitoring) accounts for around 70 % of the total capacity (173 FTE).

Table A4.7: Staff responsible for the impact mitigation regulation in road planning in the federal states of Germany (selected examples)

Federal state Source Staff (no. of full-time employees)

Thereof % for remarks Plan-

ning Follow-up

133

North Rhine-Westphalia

Personal communication (Prof. Wende, June 11, 2015) with Michael Hilkenbach, Landesbetrieb Straßenbau NRW

51 30% (16)

70% (35)

11 departments concerned, with 1-2 staff members each for planning, around 35 staff members for implementation and follow-up

Lower Saxony

Personal communication (Prof. Wende, June 11, 2015) with Gotthard Storz, Planungsgruppe grün GmbH

12 Mostly

planning

8 staff members in the head office, 8 departments concerned with 3-4 staff members each, a approx. one third of working time spent for IMR related tasks

Bavaria

Personal communication (Prof. Wende, June 11, 2015) with Manfred Kinberger, Oberste Baubehörde im Bayerischen Staatsministerium des Innern, für Bau und Verkehr

17 n/a n/a

Around 50 staff members in total, approx. one third of working time spent for IMR related tasks

Saxony

Personal communication (Prof. Wende, June 11, 2015) with Jens Göpfert, Landesamt für Straßenbau und Verkehr Sachsen

11 20% (2)

80% (9)

2 staff members for planning, 3 staff members for implementation and follow-up, 6 outsourced workers for implementation and follow-up

Mecklenburg-West Pomerania

Personal communication (Prof. Wende, June 11, 2015) with Sven Reiter, Landesamt für Straßenbau und Verkehr Mecklenburg-Vorpommern

8 30% (2)

70% (6)

10 staff members, approx. 30-40% of working time spent for IMR related tasks, thereof 60% for planning and 40% for implementation and follow-up

133

Note that this includes mainly implementation of measures and only a small percentage for monitoring

http://dict.leo.org/ende/index_de.html#/search=North&searchLoc=0&resultOrder=basic&multiwordShowSingle=on

http://dict.leo.org/ende/index_de.html#/search=Rhine-Westphalia&searchLoc=0&resultOrder=basic&multiwordShowSingle=on

http://dict.leo.org/ende/index_de.html#/search=Rhine-Westphalia&searchLoc=0&resultOrder=basic&multiwordShowSingle=on

http://dict.leo.org/ende/index_de.html#/search=Mecklenburg-West&searchLoc=0&resultOrder=basic&multiwordShowSingle=on

http://dict.leo.org/ende/index_de.html#/search=Mecklenburg-West&searchLoc=0&resultOrder=basic&multiwordShowSingle=on

http://dict.leo.org/ende/index_de.html#/search=Pomerania&searchLoc=0&resultOrder=basic&multiwordShowSingle=on


361

Rhineland-Palatinate

Personal communication (Prof. Wende, June 11, 2015) with Helmut Schneider, Landesbetrieb Mobilität Rheinland-Pfalz

17 50% (9)

50% (8)

Around 50 staff members in total, thereof 27 for planning and 23 for implementation and follow-up, approx. one third of working time spent for IMR related tasks

Mean 19 30% 70%

Extrapolated estimate for Germany

247 74 173

For Germany we estimated on the basis of the information from the federal states above around 247 staff members in total, thereof 74 for planning and 173 for implementation and following up

Similar to the estimation of costs for staff members of the lower nature conservation authorities the estimation of costs for staff members of road planning authorities is based on an average salary bracket E 10 TV-L. Based on this assumption Table A4.8 shows the gross monthly salary in Euro per month and per year for a full-time employee as well as the total cost for a full-time employee per year (including employer’s contribution to social insurance). The columns represent the development steps within the salary bracket (salary increase after 0, 1, 3, 6 and 10 years).

Consequently the total administrative costs for the implementation of IMR of all road planning authorities in Germany can be roughly estimated around €10 million to €15 million per year.

Table A4.8: Estimated costs for staff working with impact mitigation regulation in road planning in the federal states of Germany

E 10 1 2 3 4 5

Gross salary per month €2,868 €3,182 €3,421 €3,659 €4,113

Average gross salary per year134

€38,466 €42,871 €49,204 €54,765 €61,948

Employer’s contribution to social insurance (19.275 %)

€7,414 €8,263 €9,484 €10,556 €11,941

Total cost for one full-time employee

€43,449 €48,266 €52,112 €55,957 €63,272

Total cost for 247 full-time employees

€10,731,903 €11,921,702 €12,871,664 €13,821,379 €15,628,184

Thereof:

Planning and approval (74) €3,215,226 €3,571,684 €3,856,288 €4,140,818 €4,682,128

Monitoring and Follow-up (173) €7,516,677 €8,350,018 €9,015,376 €9,680,561 €10,946,056

These IMR administrative costs of the road planning authorities of €10 million to €15 million per year add to the costs of the lower nature conservation authorities (€50 million to €70 million per year), giving a total of around €60 million to €85 million per year for the whole of Germany. This is likely to be close to the overall total for all public authorities, but it would be slightly higher because other sectors that would be involved in some offsetting decisions

134

Including bonus payments

http://dict.leo.org/ende/index_de.html#/search=Rhineland-Palatinate&searchLoc=0&resultOrder=basic&multiwordShowSingle=on

http://dict.leo.org/ende/index_de.html#/search=Rhineland-Palatinate&searchLoc=0&resultOrder=basic&multiwordShowSingle=on


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have not been included in this estimation (i.e. relating to waterways, railway and emission control).

As the total costs of offsetting in Germany are estimated above to amount to approximately €2,500 million per year, then this suggests that the main public administrative costs (i.e. for nature authorities and roads) are about 2.4% to 3.4% of the offsetting costs.

Relation of investment costs and offset costs

This case study compared the developers offsetting costs with the total costs of development. This proved to be difficult due to data limitations and no single methodology was entirely satisfactory. Four approaches were explored using information on: the development of built-up settlement area and transport space, construction activity, the costs of land used for construction, and the estimated costs of construction activities. Of these approaches, the comparison of offset costs with the total costs of building construction provided the most complete assessment and is therefore set out below.

Table A4.9 sets out the estimated costs for construction activity for Germany. Only the data from newly built non-residential and residential buildings (not modifications to existing buildings) were used for this calculation.

Table A4.9: Calculation of costs of construction activity for non-residential and residential buildings using the percentage of the total number of new buildings per federal state and the total estimated investment costs for Germany (2012)

Federal states

Non-residential buildings Residential buildings

Total number

percentage

costs Total

number

percentage

costs

Schleswig-Holstein 1,228 4.45% €1,300,879,527 7,503 3.98% €1,764,268,539

Hamburg 138 0.50% €146,190,045 5,952 3.16% €1,399,563,687

Niedersachsen 3,760 13.63% €3,983,149,041 20,641 10.96% €4,853,560,832

Bremen 127 0.46% €134,537,215 991 0.53% €233,025,473

Nordrhein-Westfalen 3,541 12.84% €3,751,151,796 35,117 18.64% €8,257,472,784

Hessen 1,247 4.52% €1,321,007,142 11,920 6.33% €2,802,889,643

Rheinland-Pfalz 1,425 5.17% €1,509,571,113 10,072 5.35% €2,368,347,691

Baden-Württemberg 3,685 13.36% €3,903,697,930 28,872 15.33% €6,789,012,564

Bayern 8,192 29.70% €8,678,180,038 41,199 21.87% €9,687,604,898

Saarland 336 1.22% €355,940,978 1,744 0.93% €410,087,209

Berlin 253 0.92% €268,015,082 4,526 2.40% €1,064,251,554

Brandenburg 682 2.47% €722,475,438 6,447 3.42% €1,515,958,853

Mecklenburg-Vorpommern

448 1.62% €474,587,971 3,976 2.11% €934,923,592

Sachsen 1,233 4.47% €1,306,176,268 4,553 2.42% €1,070,600,381

Sachsen-Anhalt 539 1.95% €570,988,652 2,433 1.29% €572,099,874

Thüringen 749 2.72% €793,451,764 2,451 1.30% €576,332,426

Total Germany 27,583 100% €29,220,000,000 188,397 100% €44,300,000,000

Source: BMVBS (2013)


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As can be seen from Table A4.10 offsets costs are 3.5% of the total costs of building construction based on the costs included in Table A4.9 for the state of Hesse and 3.3% for Germany as a whole. However, these construction costs do not include those related to ground engineering works (e.g. for roads, railways and hydraulic engineering, earthworks, landfills, canalization and flood control). According to BMVB (2013, p.16) such works account for approximately 17% of total construction activities. Adding these costs reduces offsets to 3.0% of the total construction costs in Hesse, and 2.9% for Germany overall. This offsetting cost percentage for buildings is relatively close to a study that estimated offset costs for roads to be around 5% (Technische Universität Berlin n.d.).

Table A4.10: Offset costs in Germany in relation to the total costs of construction activities for non-residential and residential buildings

Types of costs and source State of Hesse Germany

average (€ million)

range (€ million)

average (€ million)

range (€ million)

Offset costs to developers (see text above)

150 70 - 210 2,500 1,100 – 3,400

Costs of construction activity (from Table A4.9)

a) Non-residential buildings b) Residential buildings

Total construction costs

1,320 2,800 4,120

- 29,220 44,300 73,520

-

Total above ground construction and offset costs

4,270 76,020

Offsets costs as % of total above ground construction costs

3.5% 3.3%

Additional 17% ground works construction costs

700 12,498

TOTAL CONSTRUCTION AND OFFSET COSTS

4,970 86,018

OFFSETS COSTS AS % OF TOTAL CONSTRUCTION COSTS

3.0% 2.9%

References

Battefeld, KU (2012): Hintergründe zum Kompensationsflächenmanagement. Aktuelle Probleme und Entwicklungen in Hessen. NAH-Tagung, 30.01.2012, Wetzlar http://www.na-hessen.de/dokumentation/veranstaltungen/veranstaltungen-2013/index.php [12.03.2012]

BMVBS (2013): Strukturdaten zur Produktion und Beschäftigung im Baugewerbe. Berechnungen für das Jahr 2012. BMVBS-Online-Publikation, Nr. 15/2013. Freistaat Thüringen (2003) Die Eingriffsregelung in Thüringen. Kostendateien für Ersatzmassnahmen im Rahmen der naturschutzrechtlichen Eingriffsregelung [standard costs for conservation measures]. Thüringer Ministerium für Landwirtschaft, Naturschutz und Umwelt, Germany.

http://www.na-hessen.de/dokumentation/veranstaltungen/veranstaltungen-2013/index.php

http://www.na-hessen.de/dokumentation/veranstaltungen/veranstaltungen-2013/index.php


364

http://www.thueringen.de/mam/th8/tmlfun/naturschutz/naturschutzrecht/kostendateien_fur_ersatzmassnahmen_im_rahmen_der_naturschutzrechtlichen_eingriffsregelung.pdf Technische Universität Berlin (no date): Überprüfung und Weiterentwicklung von Beurteilungskriterien für Natur und Landschaft innerhalb der Umweltrisikoeinschätzung des Bundesverkehrswegeplans für die Verkehrsträger Straße und Schiene. Final report; R & D Project No. 899 82 110, funded by the German Federal Nature Conservation Agency. 152 pages

http://www.thueringen.de/mam/th8/tmlfun/naturschutz/naturschutzrecht/kostendateien_fur_ersatzmassnahmen_im_rahmen_der_naturschutzrechtlichen_eingriffsregelung.pdf

http://www.thueringen.de/mam/th8/tmlfun/naturschutz/naturschutzrecht/kostendateien_fur_ersatzmassnahmen_im_rahmen_der_naturschutzrechtlichen_eingriffsregelung.pdf


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ANNEX 5: EVIDENCE OF THE COSTS OF OFFSETTING IN FRANCE

Provided by F. Quétier, A. Malapert and A.C. Vaissière (Biotope Ltd).

Information from the PACA DREAL on the projects in the Provence – Alpes - Côte d’Azur (PACA) region, as marked with * in Table 14-11.

Note that the allocation of actions to avoidance and reduction measures are not always consistent and they are sometimes combined. Also, not all the described measures are linked to costs within this database, and therefore the total costs of measures may be underestimated for some projects. In particular, the avoidance measures are systematically not assessed. Information on real costs vs. predicted costs was available for only 3 projects (11, 19 and 24).

Project 1 – Road enlargement (a portion of about 3km)

Destruction of Symphytum bulbosum & Ophrys bertolonii subsp. bertolonii

Table A5-1. Detailed mitigation measures costs for a road enlargement example

Mitigation hierarchy step

Mitigation and offsetting measures taken Predicted cost (k€)

Reduction Preventive tagging of sensitive areas during the construction phase 3

Reduction Construction site supervision by an ecologist 218

Compensation (off site)

Purchase of a 1.5 Ha site accommodating an impacted species (Ophrys bertolonii subsp. bertolonii) and other Orchidaceae that would be ceded to the departmental council (conseil départemental)

375

Compensation (on site)

Restoration and rehabilitation of a portion of the construction site in favor of an impacted species (Symphytum bulbosum) after the completion of the construction phase

15

TOTAL 611

The sum of the detailed costs in Table A4-2 are not exactly the same than the total costs of mitigation measures in Table A4-1 but they are in the same order of magnitude so we detailed the costs for this line.

Project 5 – Road construction (a portion of 3 km of a two-lane road)

Destruction of Ophrys provincialis

Table A5-2. Detailed mitigation measures costs for a road construction example




Management plan for a 12,8 Ha compensation site during 25 years 7


Monitoring during 25 years with fifth a year and then every two years site visits.

37.5

Accompanying (off site)

Management of invasive species 6.5

TOTAL 51


366

Project 7 - Solar panel farm development (12 MWc on 35 Ha)

Destruction or habitat destruction of Malpolon monspessulanus, Psammodromus hispanicus, Anguis fragilis, Lacerta bilineata, Podarcis muralis, Coronella girondica, Sylvia undata, Lanius meridionalis, Sylvia cantillans, Carduelis carduelis, Serinus serinus, Emberiza calandra, Emberiza cirlus, Lullula arborea

Table A5-3. Detailed mitigation measures costs for the construction of a solar panel farm example



Reduction Construction site supervision by an ecologist 3

Reduction Ecological restoration of the site after completion of the operational phase (off spring)

1.5


Ecological restoration to maintain a 7ha compensation site open during 25 years: mechanical and manual removal of the trees once to twice a year; management through extensive grazing; monitoring focused on impacted species

21


Management of invasive species: selective removal of plants on about 10Ha/year; management through grazing

12.5 – 25

Accompanying (on site)

Management of invasive species: off spring selective removal of plants, no soil enrichments products, etc.

12.5

Accompanying (on and off site)

Monitoring, every 5 years during 25 years 54.96

TOTAL 105.46 –

117.96

Project 8 – Construction of a commercial activity zone

Destruction and harvest/use of Ononis mitissima & Phalaris paradoxa

Table A5-4. Detailed mitigation measures costs for the construction of a commercial activity zone example


Mitigation measure detail Predicted cost (k€)

Reduction Construction site supervision by an ecologist; monitoring during 10 years

20


Purchase of a 20 Ha site to a municipality that would be then ceded to and managed by the Coastal protection agency (Conservatoire du littoral)

775.5


Management of invasive species, control of the activity zone ornamental plants

9.6


Rescue of the 2 impacted species by harvesting and sowing seeds on an agricultural land on site; monitoring

73.7

TOTAL 878.8


367

Project 11 - Construction of a building (to recycle organic waste of 70 municipalities)

Destruction or habitat destruction/degradation of Timon lepidus, Anguis fragilis, Podarcis muralis

Table A5-5 - Detailed mitigation measures costs for the construction of a building



Real cost (k€)

Reduction Construction site supervision by an ecologist 5 5


Purchase of a 9.1 Ha site in favor of the impacted species (Timon lepidus) that would be ceded to and managed by the PACA natural areas protection agency (Conservatoire d’espaces naturels)

9 2


Management of the compensation site during 30 years

299 301


Funding of a study on the impacted species (Timon Lepidus)

45 45

TOTAL 358 353

Project 12 - Restoration of a riverbed through the sediment recharge of a minor riverbed

Transplantation of Typha minima and impacts on wetlands

Table A5-6 - Detailed mitigation measures costs for the restoration of a riverbed through the sediment recharge of a minor riverbed example




Ecological monitoring during 5 years 50


Hydromorphological monitoring 75


Avoidance of the introduction of invasive species on the construction site

5

Accompanying (off site)

Ecological creation of backwaters and wetlands at the edge of the new riverbed

30

TOTAL 160

Project 14 - Installation of buried pipelines (75 km at 1.1m of the surface)

Destruction, capture or habitat destruction/degradation of Zerynthia rumina (Linné, 1758): Prosperpine, Hyla meridionalis : Rainette méridionale, Pelophylax ridibundus : Grenouille rieuse, Lullula arborea : Alouette lulu, Sylvia undata : Fauvette pitchou, Emberiza calandra : Bruant proyer, Emberiza cirlus : Bruant zizi, Cisticola juncidis : Cisticole des joncs, Sylvia atricapilla : Fauvette à tête noire, Sylvia melanocephala : Fauvette mélanocéphale, Sylvia cantillans : Fauvette passerinette, Phylloscopus bonelli : Pouillot de Bonelli, Luscinia megarhynchos : Rossignol philomèle, Erithacus rubecula : Rougegorge familier, Saxicola torquatus (Linnaeus, 1758) : Tarier pâtre,


368

Lanius senator : Pie-grièche à tête rousse, Coracias garrulus : Rollier d'Europe, Upupa epops : Huppe fasciée, Parus caeruleus : Mésange bleue, Parus major : Mésange charbonnière, Parus cristatus : Mésange huppée, Otus scops : Petit-Duc scops, Emys orbicularis : Cistude d'Europe, Saga pedo : Magicienne dentelée, Testudo hermanni : Tortue d'Hermann, Timon lepidus (Daudin, 1802) : Lézard ocellé, Bufo calamita : Crapaud calamite, Podarcis muralis : Lézard des murailles, Sciurus vulgaris : Écureuil roux, Malpolon monspessulanus (Hermann,1804) : Couleuvre de Montpellier, Rhinechis scalaris : Couleuvre à échelons, Lacerta bilineata Daudin, 1802 : Lézard vert, Psammodromus hispanicus (Fitzinger,1826) : Psammodrome d'Edwards, Tarentola mauritanica (Linné, 1758) : Tarente de Mauritanie, Isoetes durieui Bory : Isoète de Durieu, Serapias neglecta De Not. : Sérapias négligé, Spiranthes aestivalis L.C.M. Richard. : Spiranthe d'été, Kickxia commutata (Bernh. ex Rchb.) Fritsch : Linaire grecque, Trifolium bocconei Savi : Trèfle de Boccone, Aira provincialis Jordan : Canche de Provence, Corrigiola telephiifolia Pourret subsp. telephiifolia : Corrigiole à feuilles de téléphium, Phalaris aquatica L. : Alpiste aquatique, Gladiolus dubius Guss. : Glaïeul douteux, Cleistogenes serotina : Molinie tardive, Carex olbiensis Jordan : Laîche d'Hyères, Astragalus pelecinus (L.) Barneby, 1964 : Biserrule en forme de hache; Natura 2000 species and habitat (Spiranthes aestivalis, Osmoderma eremita, Oxygastra curtisii, Euphydryas aurinia, Callimorpha quadripunctaria, Cerambyx cerdo, Lucanus cervus, Limoniscus violaceus, Barbus meridionalis, Leuciscus souffia, Emys orbicularis, Testudo hermanni, Myotis myotis, Rhinolophus ferrumequinum, Miniopterus schreibersii, Myotis bechsteinii, Myotis emarginatus, Myotis capaccinii, Myotis blythii, Rhinolophus hipposideros, Forêts-galeries à Salix alba et Populus alba, Forêts alluviales à Alnus glutinosa et Fraxinus excelsior (Alno-Padion, Alnion incanae, Salicion albae), Forêts à Olea et Ceratonia, Forêts à Quercus suber, Pinèdes méditerranéennes de pins mésogéens endémiques, Mares temporaires méditerranéennes, Pelouses mésophiles macaronésiennes, Taillis de Laurus nobilis, Eaux oligotrophes très peu minéralisées sur sols généralement sableux de l'ouest méditerranéen à Isoetes spp., Parcours substeppiques de graminées et annuelles du Thero-Brachypodietea, Prairies humides méditerranéennes à grandes herbes du Molinio-Holoschoenion), Rivières des étages planitiaire à montagnard avec végétation du Ranunculion fluitantis et du Callitricho-Batrachion, Rivières intermittentes méditerranéennes du Paspalo-Agrostidion, Pentes rocheuses siliceuses avec végétation chasmophytique, Roches siliceuses avec végétation pionnière du Sedo-Scleranthion ou du Sedo albi-Veronicion dillenii, Landes sèches européennes)


369

Table A5-7 - Detailed mitigation measures costs for an installation of buried pipelines example



Reduction Preventive tagging of sensitive areas during the construction phase

30

Reduction Restrict the area required for the construction phase 3,000

Reduction Rescue of two impacted species (Timon Lepidus and Astragalus pelecinus)

10

Reduction Measures to limit the impacts on impacted species (Bufo calamita and Rana dalmatina)

1

Reduction Ecological restoration of streams after crossing 75

Reduction

Measures to limit the impacts on impacted species: construction site supervision by an ecologist, manual removal of plants, translocation of individuals, etc. (Emys orbicularis, Testudo hermanni, Saga pedo)

203.5

Reduction Measures to prevent the increase of turbidity of the water when crossing streams (cofferdam, sediment filters, etc.)

7

Reduction Respect of the order of the soil horizons when filling back in the cuttings, addition of supporting plates and merlons when necessary

240

Reduction Reuse (or exportation out of ecologically sensitive areas) of excavated materials

65

Reduction Measures to limit erosion (plantation of appropriate plants, setting up planks and fascines, etc.)

200


Purchase of a 50 Ha compensation site that would be then ceded to and managed by the departmental council (conseil départemental)

400


Monitoring of the compensation site during 25 years 18


Management plan of the compensation site to improve its ecological quality (the costs of the management itself are not included)

418

Accompanying Funding of a study on the resiliency of the vegetation at the construction site (the 10 years following the end of the construction phase)

30

Accompanying Construction site supervision by an ecologist 40

Accompanying Funding of a study on the effect of erosion and drainage on particular wetland plants and species at the construction site (the 10 years following the end of the construction phase)

30

Accompanying Monitoring of the ecological resiliency of the fauna at the construction site (5 years for birds and invertebrates, 10 years for reptiles)

32.3

Accompanying Better integration of the pipelines that run parallel to the wetlands (cover them with excavated materials)

15

TOTAL 4,814.8


370

Project 18 - Restoration of an old building (5–10 years of construction phase)

Destruction and transplantation of Limonium pseudominutum & Pancratium maritimum

Table A5-8 - Detailed mitigation measures costs for the restoration of an old building example




Ecological restoration of a backshore including an impacted species (Limonium pseudominutum)

24


Transplantation of individuals of an impacted species (Pancratium maritimum)

25


Management of invasive species in favor of an impacted species (Pancratium maritimum)

5

TOTAL 54

Project 19 - Construction of a building

Habitat degradation, capture and rescue of Emys orbicularis & Testudo hermanni

Table A5-9 - Detailed mitigation measures costs for the Construction of a building example



Real cost (k€)

Reduction Ecological monitoring during the construction phase (additional costs due to manual vs. mechanical removal of trees)

34 54


Participation to the funding of a national restoration plan in favor of an impacted species (Testudo hermanni)

10 13


Ecological restoration of the site after completion of the operational phase during 45 years

225 225 (?)


Purchase of a 33.5 Ha compensation site (additional costs due to the fact that the originally planned compensation site measured 30 Ha) that would be ceded to and managed by the departmental council (conseil départemental)

400 470

Accompanying

Capture and rescue of impacted species individuals (Emys orbicularis) to release them back to the wild (additional costs due to the fact the turtles came back to the impacted site so the developers had to redo the operation and put fences)

50 111

Accompanying Likewise for the other impacted species (Testudo hermanni)

50 111

TOTAL 769 984


371

Project 21 – Construction of a motorway interchange

Capture of Timon lepidus and destruction of Gagea bohemica subsp. bohemica

Table A5-10 - Detailed mitigation measures costs for the construction of a motorway interchange example




Purchase of a 1.2 Ha compensation site that would be ceded to and managed by the departmental council (conseil départemental)

100 – 110


Management of the compensation site during 5 years 32

Accompanying Regulatory safeguard measure on the compensation site 2

TOTAL 134 – 144

Project 24 – Security protection of cliffs

Habitat destruction of Myotis daubentonii: Murin de Daubenton, Plecotus austriacus : Oreillard gris, Pipistrellus kuhlii : Pipistrelle de Kuhl, Pipistrellus pipistrellus : Pipistrelle commune, Hypsugo savii : Vespère de Savi, Tadarida teniotis : Molosse de Cestoni, Myotis myotis : Grand Murin, Myotis capaccinii : Murin/Vespertilion de Capaccini, Myotis blythii : Petit Murin, Corvus monedula : Choucas des tours, Bubo bubo : Grand-Duc d'Europe, Apus melba : Martinet à ventre blanc

Table A5-11. Detailed mitigation measures costs for the security protection of cliffs example



Reduction Adaptation of the construction phase planning to the life cycles of impacted species (chiropterans and birds)

30

Reduction Preventive tagging of sensitive areas during the construction phase

1.7

Reduction Adaptation of the techniques to anchor the rocks 0

Reduction Consultation of an ecologist before that any adaptation measure is being decided to stabilize the cliff

0

Reduction Construction site supervision by an ecologist 16.8

Reduction Adaptation of the techniques (tagging and use of tarpaulin) to avoid the destruction of impacted species individuals (chiropterans) during the construction phase

4.4

Reduction Adaptation of the techniques during the construction phase 130


Ecological restoration of an impacted species shelter (chiropteran of which Myotis capaccinii)

34

TOTAL 216.9

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