Enduring vs permanent land-use change

A more adaptable solution to nutrient-neutral development?

Many parts of England’s most highly prized and protected water environments are damaged by nitrogen and phosphorus, nutrients released in excess of nature’s needs despite well-managed farming and billions of pounds of investment in sewage works. Some plans for new housing development cannot be legally approved unless developers and planning authorities can demonstrate that they have plans to mitigate the extra nutrients that inevitably arise from this growth. The situation is an issue across several counties in England, but it has received most prominent coverage in relation to constraints around approvals for housing development in South Hampshire. It is in this area that Natural England has most clearly stated its regulatory position to protect against risks to one of the UK’s most important wildlife sites, the Solent.

One potential way of reducing the impacts of extra nutrients is to secure land-use change so that the inputs from elsewhere are reduced, a process known as offsetting. These offsets must last for the duration of new development and often simplistically involve taking land out of agricultural production on a permanent basis. In a time of increasing focus on domestic food security, this does not feel like a sustainable solution. So, can South Hampshire’s local planning authorities instead rely on short-term land-use changes as mitigation measures to meet the requirements for nitrogen-neutral housing development in the Solent?

At first glance, based on these extracts from Natural England’s March 2020 guidance on Nitrogen neutral development in the Solent, it would appear not:

"To ensure it is effective mitigation, any scheme for neutralising nitrogen must be certain at the time of appropriate assessment so that no reasonable scientific doubt remains as to the effects of the development on the international sites. This will need consideration of the delivery of mitigation, its enforceability and the need for securing the adopted measures for the duration of the development’s effects, generally 80-125 years.

Mitigation land should be appropriately secured to ensure that at the time of appropriate assessment it is certain that the benefits will be delivered in the long term. Natural England advises that this can be achieved through an appropriate change of ownership to a local planning authority or non-government organisation."

But there is some light at the end of the tunnel, as the guidance does continue to say:

"However, it is recognised that there may be other legal mechanisms available to the competent authority to ensure deliverability and enforceability of a mitigation proposal. These can be considered on a case by case basis."

The options for permanent land-use change are likely to be very slim in Southern England, where the opportunity to be designated for housing vastly inflates land prices, so we need to look for these other mechanisms. Without an alternative to solutions that rely on permanent land-use change, fruitless searches will delay both the right to develop and the opportunity to develop a wider range of environmental benefits which are available right now. I would argue that for nitrogen offsetting, as opposed to habitat creation, instead of looking solely for permanent land-use change, the more sustainable solution is to look for enduring land-use changes.

Enduring land-use change would involve a commitment to continually maintain or renew a bank of land-use change that met the offsetting requirement, with the potential for the exact location of the change to vary across the catchment. Because changes would not need to be permanent, then they would be more readily negotiated with land managers, a much larger group of land managers would be interested and the skills of land managers as custodians of the land would be enhanced.

There are additional benefits to this approach. The land-use change could be scattered, to allow landscape permeability – a key need for nature to adapt to climate change – rather than putting all eggs in a limited number of land-use changes which may not survive in hotter, drier conditions likely to be faced in 2100. The amount of land-use change would be responsive to future need, to allow for reductions in actual population or technology developments such as community-level water management systems, enabling land for domestic food security to be more readily maintained. And by allowing constant renegotiation of the required land-use change, additional buyers of environmental goods – whether that be for flood risk reduction, biodiversity or air quality regulation –could bring more money to the table so that more land managers would be willing to consider the viability of farming natural capital as well as food.

Of course, the big issue here is how to demonstrate that this conveyor belt of change would be sufficiently certain in the long-term. I have a two-part potential solution. First, require developers to create an investment fund backed by some form of insurance against the possibility of funding/delivery shortfalls ie create financial provision. Second, ensure that a suitable organisation with long-term credentials exists to take on the responsibility of ensuring continual purchase with these funds.

Financial provision is an option familiar in UK environmental law, as a mechanism for ensuring safe management of closed landfills which were at risk of abandonment after they ceased to actively take in waste to generate revenues. Developers could deposit funds equal to the estimated long-term costs of measures, with the prospect of re-valuation contributions/refunds and the requirement to take out an insurance product to ensure against the risk of ceasing to be a commercially viable entity in the future. Alongside this, the amount of offset required to be purchased could be increased to create an excess pool of offsets which act as a buffer in the event of any temporary failures. This approach has been used in other situations, including for temporary carbon credits. The level of buffer can be set according to a discount rate set by the risk of non-delivery in the future. To some extent, this approach is already built-in to the Natural England position as it requires nitrogen offsetting targets to be inflated by 20% above modelled need.

The second aspect of certainty is the requirement for a reliable organisation to negotiate with landowners to ensure delivery in the long-term. This is already alluded to in the Natural England guidance, which implies that ownership of any land changed for offsetting must be vested in a suitable body, such as a local authority or non-governmental organisation. There is no reason advanced as to why the latter would represent a suitable owner, but it would be reasonable to assume that a suitable body would be one that had a legal structure focused on long-term management and public good. A special purpose company could be formed to have such powers – as proposed in the context of the West of England Nature Partnership’s National Capital Trust, highlighted in Defra’s 25-Year Environment Plan. Equally, water companies in England– which have been construed as being a public authority and carry out public duties in several legal contexts - could meet the criteria. Regulatory mechanisms, such as Ofwat licence conditions, could control the nature of such a role.

The two parts of the solution would need some investment to develop a workable pilot, but that would seem worthwhile given the benefits from an enduring solution and because of their applicability in a range of other scenarios. Although it now seems a long-time ago, the Government’s budget in March created two pots of money that could realistically be used to carry out this development, the £10m Natural Capital Impact Fund and the £640m Nature for Climate Fund. And if the prospect of a water company taking on a quasi-catchment system regulator role is not too outlandish, then Ofwat’s Innovation Fund might also provide some resource to carry out the work.

Clearly, responding to and recovering from the issues created by the Covid-19 crisis must be the immediate focus for government, the farming sector and wider society. But if we want to emerge as a more resilient society in the future, some thinking on flexible and adaptable land-use solutions to deal with the housing and environmental crises will surely be pertinent.