Natural Capital is the stock of the world all around us – earth, air and water and all the components that are linked with them: trees, minerals and peat bogs, to name but a few.

Ecosystem services are the services that Natural Capital can deliver, the sequestration of carbon by trees, the filtering of water by rocks and the flood prevention provided by flood plains.

Payments for ecosystem services are made to the ‘manager’ of the natural capital to provide the ecosystem service. Many services are currently provided without charge but as the ‘polluter pays’ principle becomes more established so does the ability for ‘offsetting’ and the development of an associated market.

Between 2012 and 2014 the Government ran six biodiversity offsetting pilot areas relating to the effect of development on the environment. The outcome concluded that formal and measurable environmental ‘compensation’ must be achieved to offset any loss as a result of a development. Biodiversity is likely to be a regular part to the ‘net environmental gain’ being strived for in the 25 Year Environment Plan.

Other examples of biodiversity offsetting include paying farmers to actively manage their landscape to mitigate flood risk or watercourse management.

Further information

Contact Savills Food & Farming

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