Biodiversity Protection Under the Habitats Directive – Is Habitats Banking Our New Hope?

Although the Habitats Directive has enhanced nature conservation in Europe, it has failed to stop deterioration in its biodiversity. A significant contribution to this failure is the weak provision on compensatory measures under Article 6(4) of the directive in the event that Member States decide to authorise activities which harm protected areas. As the directive’s Natura 2000 network fails to include sufficient private land, it forms a patchwork of conservation areas which do not thrive. This article investigates the extent to which this weakness could be effectively addressed via habitats banking, a system in which developers purchase credits from private landowners to offset adverse impacts of developments on protected sites. While habitats banking does not prevent developments as such, it ensures the maintenance of a certain biodiversity level on the participating sites. A draft proposal will show how such a banking scheme could work in practice, critically bearing in mind the dangers of a fully privatised system. The article draws the conclusion that a European system of habitats banking with a sensible amount of public administration would improve the overall effectiveness of compensatory measures under the Habitats Directive.