Abstract
The scope for compensating for environmental loss or degradation with some form of balancing environmental gain (such as habitat creation) has attracted critical attention from conservationists and policy makers. However, it is increasingly apparent that concentrating on technical skills, and adopting a linear analytical framework, disguise the range of social processes at work. Engaging in environmental compensation is, almost inevitably, a process of considerable ecological, evaluative and institutional transformation. Moreover, taking increasing control of this process through detailed management may accelerate the transformation of nature into 'capital'. These arguments are developed through a case-study of Cardiff Bay, where the implementation of habitat creation compensating for the loss of inter-tidal mud flats became linked to the implementation of the European Habitats Directive, a policy lever which served to both intensify and rationalize these transformations.
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