A summary of funding opportunities described below are those that are established and available at the time of drafting this Biodiversity Action Programme. It is acknowledged that funding opportunities are likely to change over the next 12 months once biodiversity net gain (BNG) comes into force and a General Election is held.

Biodiversity Credits

Fortunately, Warwick District is already in a strong position on generating funding through nature markets having proactively worked with Warwickshire County Council (WCC) to be  a national leader in biodiversity offsetting (and more latterly biodiversity net gain (BNG)) through the planning system. On a county level, the BNG market has generated over £4million in Warwickshire & Coventry since 2015, averaging over £650k a year.

Once credits have been received, in the form of a financial contribution, they are ‘committed’ (offsets commenced) or ‘allocated’ (offsets negotiation) to a County-managed offset scheme secured through legal agreements. This provides the assurance that landowner/tenant meet their agreement for the provision of biodiversity units. Offset schemes are currently funded either by ‘annual’ or ‘one-off’ payments. This early engagement into natural capital investment has unlocked the realisation that some markets are limited, and this market alone will not support delivery of this Biodiversity Action Programme through to 2050.

Natural Environment Investment Readiness Fund

Building on this market establishment knowledge, Warwickshire County Council (WCC) and local authority partners including Warwick District Council (WDC), have been seeking to establish carbon and other ecosystem services markets to enable ‘Warwickshire Standard’ (high standard and high integrity) carbon credits and other ecosystem services credits to be sold locally and nationally. These will be generated within the mandatory system of Warwickshire’s Local Authority consenting regimes.

In March 2022, the Natural Environment Investment Readiness Fund (NEIRF) supported the research and production of the ‘Warwickshire Carbon and Environmental Markets’ report. NEIRF is a pioneering fund designed by the Environment Agency, in partnership with Defra and Natural England, to help deliver on commitments in the Government’s 25 Year Environment Plan to drive private investment in nature and tackle climate change, the importance of which was highlighted by the Dasgupta Review (2021). The Fund will accelerate private investment in nature alongside the best practice derived from ongoing projects being delivered as a result of NEIRF. Funding will enable organisations (for example environmental organisations, local authorities, businesses, and other public and private sector organisations)  to acquire specialist advice, engage investors and build capacity to develop their project to a stage where it is investment-ready and has developed suitable revenue streams.

The Warwickshire Carbon and Environmental Markets report sought to build and broaden the scope of the Warwickshire biodiversity net gain (BNG) market, to bring in wider ecosystem benefits including carbon and catchment services. The primary focus was to identify how to expand the BNG market to woodland carbon and blend public funding for tree planting with carbon credits.

Nationally, other NEIF projects have included:

• The Wildlife Trusts’ Habitat Banking Investment Model (Berkshire, Buckinghamshire and Oxfordshire Wildlife Trust) developing a new habitat banking investment model to deliver BNG at scale focusing on three sites for carbon storage, improved flood resilience and visitor well-being. The aim is to monetise potential for revenue generation through biodiversity credits.
• Greater Manchester Environment Fund: Scaling up Natural Capital Investment  to restore peatland by modelling revenues from the sale of carbon and biodiversity credits through woodland creation/improved biodiversity.

The Warwickshire Local Authority Natural Capital Investment Strategy (NCIS)

The majority of biodiversity net gain (BNG) offset sites in Warwickshire are funded by annual payments made from Warwickshire County Council (WCC) to the landowner. In these situations, there is an opportunity to ‘invest’ the committed funding secured for future years’ payments. This investment in BNG, or other ecosystem services markets (for example carbon sequestration, air quality or flood risk mitigation), could facilitate the development of these markets, fund vital environmental initiatives, give communities better access to nature and generate additional income.

The NCIS would also be a significant funding stream and contributor to the delivery of the Local Nature Recovery Strategy (LNRS) that Defra is asking WCC to prepare as a Responsible Authority with support from Supporting Authorities including Warwick District Council.

Warwickshire Local Authority Natural Capital Investment Strategy will be a top-level strategy to determine, and manage, how the Warwickshire Local Authorities will utilise the nature- based compensation monies, and other income streams, generated through the planning system or other voluntary environmental markets including funding the actions of this Biodiversity Action Programme. It will also give a ‘strategic direction of travel’ for achieving and implementing investment in Warwickshire’s natural capital assets.

Off-site BNG

The off-site biodiversity market offers an opportunity for Warwick District Council (WDC) to gain additional income and help contribute towards the aims of the Biodiversity Action Programme. This could be through being a broker, or through selling to the off-site biodiversity market. This would be in addition to work being done on a County level described above.

As a broker, the Council would be able to connect developers to off-site unit providers. The Council could also identify target sites that would benefit from biodiversity enhancement and sell biodiversity units from enhancements on this land (or via a habitat bank in collaboration with other landowners) into the off-site market. We would need to make sure we don’t direct buyers towards our units in preference to other suppliers. The Council could also provide guidance for landowners, to encourage habitat creation in line with the Local Nature Recovery Strategy (LNRS).

Stacking

Nature markets provide a way for land managers to receive payment for making improvements that benefit nature. If we use our land to undertake environmental projects, we may be able to sell these services as credits or units to different buyers.

Stacking is when multiple credits or units from different nature markets are sold separately from the same or different activities on a piece of land (for example biodiversity units through biodiversity net gain (BNG) and off-site nutrient units).

Defra are currently developing guidelines on stacking including where BNG can be used on a site alongside other funding streams. Warwick District Council will continue to work with our partners including Warwickshire County Council to identify the best way to use our land on   the nature market including consideration of carbon, nutrient, and biodiversity off-set credits, where stacking is permissible.

Other Funding Streams

Depending on the specific project details arising from this Biodiversity Action Programme, other funding streams will be reviewed. This will include but not be limited to:

• Public Grants (e.g. NEIRF, Defra, Heritage Lottery Fund)
• Partnerships (e.g. funding streams available to County Council, Town and Parish Councils)
• Corporate Social Responsibility Environmental Payments
• Section 106 payments
• Charitable organisations