Cameron throws weight behind "bio-banking" scheme

Conservative Leader David Cameron has thrown his weight behind proposals for a new "bio-banking" scheme that could see firms make financial contributions towards biodiversity projects whenever they undertake new developments.

The proposals, which were originally outlined by shadow environment secretary Nick Herbert in February, are modelled on similar schemes in Australia and the US, and would see developers provide compensation for any resulting biodiversity loss by investing in conservation credits that would help fund projects to protect wildlife at another location.

Speaking at a nature reserve in Oxfordshire on Friday, Cameron said he had instructed Herbert to set up a formal review into the proposed scheme and was " confident" that "bio-banking" could prove a successful means of halting the decline in UK biodiversity.

"Instead of regulation alone, it would be better to give communities and businesses the incentives to do the right thing and pool the resources from development to create larger conservation projects that can benefit everybody," he said. "In the same way in which we are now recognising the importance of putting a price on carbon, society needs to recognise the significance of attributing a value to biodiversity."

Green groups have broadly welcomed the proposals, but expressed concern that any scheme must be structured to ensure that developers are not simply allowed to justify the destruction of important habitats by buying conservation credits.

Cameron said that some existing biodiversity regulations should remain, and that the system should not result in more bureaucracy, nor make it more difficult for businesses to invest in local conservation projects. But he added that he was "confident these details can be worked out – I want them to be worked out".

A spokeswoman for the Conservatives said that the proposals had gained significant support from the party leadership and that the review would now undertake consultation with green groups and developers to flesh out the details. "The idea comes from projects that are working really well abroad," she added. "As well as halting declines in biodiversity, conservation credits can deliver other benefits such as improved flood prevention and air quality."

Should the review prove successful, the proposals could be adopted as part of the Conservative manifesto at the next election.

Cameron's speech came just a day after shadow chancellor George Osborne called on the government to deliver ten environmental spending commitments as part of this week's budget, including plans for a £6,500 energy-efficiency handout for every home, and the accelerated rollout of a raft of low-carbon infrastructure projects.