Wildlife Decline Continues at an Alarming Pace… and Markets Are Making It Worse

The accelerating loss of wildlife is not being halted by market–oriented conservation schemes such as Biodiversity Net Gain (BNG) and carbon offset markets. Though these policy tools are promoted as innovative means to finance restoration and conservation, emerging evidence suggests they are deeply inefficient, misaligned, and susceptible to capture by powerful actors. But as we explore the solutions to all these failures, there is a much simpler way: transfer taxes to land. This would concentrate development, reward high-quality housing, make wildlife conservation far cheaper, and finally put a true cost on the destruction of habitats and species.



What the Evidence Shows

1. Biodiversity Net Gain (BNG) in England: Gaps, Shortfalls, and Loopholes

BNG was introduced in England in 2024 to require developers to deliver at least a 10% net gain in biodiversity when harming habitats via building or infrastructure projects. But several analyses show serious under-delivery.

  • Shortfall of habitat creation: In the first year, expectations for habitat created via BNG were far from met. Wildlife and Countryside Link found that just 680 hectares of off-site habitat had been set aside (by local authorities) compared to government estimates of around 5,428 ha/year. When including ecology companies, this rises to ~1,220 ha, but even then that represents a shortfall of around 78–86% relative to what was pledged. The Planner+1

  • On-site gains almost negligible: The same sources show only ≈ 93 ha of on-site gains recorded — tiny compared to what was estimated. The Planner+1

  • Loopholes and exemptions proliferating: Many planning applications are exempted via “de minimis” rules or because they are small sites. A study showed 86% of approved planning applications in a certain period claimed exemptions; proposals to further exempt small sites could increase that to 97% of applications. The Guardian+1

  • Capacity & expertise shortages: Councils often lack in-house ecologists; many ecologists feel overstretched. Local authorities cite delays, resource constraints, and low capacity to enforce or monitor BNG compliance. Housing Today+2Environment Analyst+2

  • Enforcement weak: In many cases, the promised “enhancements” are not delivered in full. A survey by Wild Justice (42 housing estates, 291 hectares) found only about half the nature-friendly features (trees, hedges, bird boxes, etc.) originally promised were implemented. The Guardian

2. Deficiencies in Carbon Offset & Permit Markets: Rent Capture, Perverse Incentives

While not always identical to BNG, carbon credit/permit markets show similar patterns of inefficiency, perverse incentives, and rent-seeking.

  • Firm behaviour in Clean Development Mechanism (CDM): A recent NBER working paper studied Chinese firms in the CDM. It found that after starting an offset project, firms often increase emissions — either because of selection of high-growth firms into offset projects (so they were going to grow/emissions anyway) or because offsets enabled growth. The net effect is that the “climate surplus” from offsets is sometimes vastly outweighed by additional emissions. NBER

  • Rent-seeking in carbon markets: Studies such as “Administration-Led Carbon Markets and China’s Green Transition: Efficiency, Fairness and Rent-Seeking” show that markets directed by governments can be captured by firms or other actors with influence, skewing outcomes. Tandfonline

  • Permit markets & distortions: Research on cap-and-trade systems (e.g. EU ETS) finds that large incumbents with political and market power can capture surplus rents from permit allocation and influence market rules to their advantage. SpringerLink+1

3. Critical Comparative Studies: Offsets & Net Gain Do Poorly for People & Nature

  • One Earth (2024): “Biodiversity offsets perform poorly for both people and nature, but better approaches are available” — This comparative study shows that offset schemes (which are quite like BNG in effect) often fail to deliver actual biodiversity gains in ecologically meaningful places. Offsets tend to be located where they’re cheapest or most convenient, not where they’d do the most good. The study suggests much better outcomes are possible if offsets are targeted ecologically and socioeconomically (i.e. considering existing biodiversity, connectivity, nature deprivation). ScienceDirect

Why These Mechanisms Tend to Fail (or Subvert Their Aims)

Putting these empirical observations together with economic/political logic reveals why such schemes often benefit “rent-seekers” and fail wildlife.

  1. Regulatory uplift becomes a form of land value speculation
    When regulation (e.g. BNG rules) increases the value of certain land (those with habitat banks, or the ability to sell biodiversity units), those who already own or can access land benefit most. They can capture the value (payments from developers needing credits), while the cost (of habitat provision or long-term maintenance) is borne elsewhere.

  2. Loopholes and exemptions favour those with legal, technical, or financial power
    Small developers, or projects with limited oversight, can exploit de minimis exemptions. Powerful developers can influence policy or its implementation. Communities or smaller actors lack both legal capacity and ecological expertise to challenge or monitor.

  3. Temporal and spatial mismatch
    A habitat destroyed now may take many decades, or may never, to be matched by “gains” elsewhere. Offsets typically assume equivalence ("habitat units") that ignore unique soil, microclimate, local species, connectivity, ecological history. Thus “replacement” habitats may not reproduce the ecological functions or species richness lost. The case of Middlewick Ranges, Essex, is illustrative: rare acid grassland and nightingales destroyed; plan to replace via sulphur amendments, but ecologists say this may never replicate the unique, undisturbed habitat. The Guardian

  4. Weak monitoring, enforcement, and accountability
    Promised habitat gains often remain on paper. Ecological assessments, especially when conducted by parties with incentives to favor development, may overestimate restoration potential. Local authorities often lack the staff or expertise to monitor and enforce long-term promises. The Guardian+2BBC+2

  5. Commodification and prioritisation distortions
    Once habitats are turned into “units” or “credits,” ecological complexity tends to be flattened. Rare or irreplaceable ecosystems may be treated as fungible. The metric becomes about credits rather than species, ecological interaction, connectivity, or public ecological value.

  6. Perverse incentives and “greenwashing”
    Developers may prefer to pay for off-site/third-party credits (or wait out enforcement) rather than plan carefully to avoid habitat loss. Carbon offset projects may provide incentives to inflate baseline deforestation, or to claim protections that would have happened anyway (“additionality” problems). In the CDM example above, firms may grow their emissions (even as they sell offsets) because offsets give them financial space or legitimacy. NBER

Practical Examples of Failure or Near Failure

  • Middlewick Ranges, Essex: A 76-hectare area of acid grassland rich in rare species was slated for development. The proposed BNG mitigation involves converting other land via “sulphur addition” to approximate acid grassland. Ecologists warn this is unproven, and that unique features (soil, long undisturbed ecology) may not be replicable. This case is seen as setting a dangerous precedent if passed. The Guardian

  • Housing developments vs nature-friendly promises: The Wild Justice / University of Sheffield survey (42 estates, ~291 ha) found that developers delivered only about half of the nature-friendly features they had committed to (hedgerows, bird & bat boxes, trees). The Guardian

  • Exemptions reducing coverage: Analysis shows that a vast majority of small developers or small sites are using or planning to use exemptions. If small-site exemptions are widened, as some proposals suggest, nearly all planning applications could escape BNG obligations. That would strip much of the policy away. The Guardian+1

Why These Failures Are Systemic & Likely Doomed to Continue

Putting together the empirical and theoretical, we can see that many of these flaws are baked in unless there is very strong oversight, regulation design, and political will.

  • Power asymmetries: Landowners, developers, and those with political connections will be able to shape rules, exploit loopholes, and capture rents.

  • Information/monitoring constraints: Ecological restoration is slow, complex, and context-dependent. Measuring it, enforcing it, and maintaining long-term stewardship are expensive and technically challenging. These are areas where cost pressures will always push for shortcuts.

  • Temporal discounting: Market actors prefer short-term gains; biodiversity often delivers over long time spans. The longer time horizons open up risk (legal, ecological, financial) that many actors don’t want to carry.

  • Spatial externalities: When biodiversity is fragmented, small offset patches may be isolated; connectivity between habitats is critical, but markets generally ignore that or undervalue it.

  • Regulatory capture & policy drift: Over time, policy tends to be watered down (e.g. via exemptions, lower ambitions, reduced enforcement), especially under pressure for housing, infrastructure, and growth.

Are There Better Alternatives or Ways to Fix It?

It’s not that all market instruments are useless.  If we cannot transfer policy to land taxation to naturally drive green development and protect biodiversity, then we have to implement complex and bureaucratic solutions like these: 

  1. Stronger, binding siting/location rules: Offsets & habitat banks should be required to locate where ecological benefit is highest — in depleted, fragmented, or priority areas — rather than wherever land is cheapest.

  2. Higher biodiversity gain targets: More ambitious than 10%, especially in critical areas, to account for uncertainty in restoration success, ecological uniqueness, connectivity, etc.

  3. Limits / red-lines: Certain habitats should be declared “irreplaceable” and exempt from offsetting or development. Once destroyed (or significantly degraded), they cannot be replaced by “new” habitat attempts.

  4. Robust monitoring and enforcement with long-term obligations: Including legal conservation easements, long-term stewardships, financial guarantees to ensure aftercare and maintenance of restored habitats for decades.

  5. Public oversight & participatory processes: Local communities, ecologists, conservation NGOs need strong roles in the assessment, approval, and monitoring of offset/BNG schemes.

  6. Alternative funding models: Public financing of nature recovery, direct conservation protected areas, payments for ecosystem services tied to actual outcomes, tax/policy incentives rather than tradeable credits whenever possible.

  7. Transparency in metrics and accounting: Baseline setting, additionality, leakage, permanence – all need to be clearly measured and tracked. Independent auditing of ecological claims.

Conclusion: Wildlife is Losing

Despite the appearance of good intentions, the current regime of biodiversity credits, habitat banks, offset markets, and net-gain promises is not stopping biodiversity loss. In many cases, these mechanisms seem to entrench speculative behaviour, channel public money into private landowners or intermediaries, and commodify ecosystems in ways that undermine or distort conservation aims. Unless design and enforcement radically improve, wildlife will remain the “public ecological good” that nobody correctly protects or charges people properly for destroying it. — while a minority reaps financial gains.

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