Biodiversity offsetting - how to use a sharp tool and avoid a blunt instrument

8th August 2016

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Pierre Badiuzzaman

Freddy Brookes, senior ecologist and project manager at Golder Associates, considers the use of biodiversity offsets in EIA.

You only have to google ‘biodiversity offsets’ to be bombarded with a myriad of definitions derived from a host of non-governmental agencies, private consultancies and government. Essentially, a biodiversity offset is a tool to demonstrate that a development project can be implemented in a manner that results in no net loss or a net gain of biodiversity.

The business and biodiversity offsets programme (BBOP) defines biodiversity offsets as ‘measurable conservation outcomes of actions designed to compensate for significant residual adverse biodiversity impacts arising from project development after appropriate prevention and mitigation measures have been taken.’

Biodiversity offsetting is not designed to replace the functionality of the mitigation hierarchy at the site level which tells us to avoid, minimise and rehabilitate and/or restore habitats as a priority. Offsetting should be complementary to traditional mitigation strategies within the EIA process.

So, what are the benefits and what are the risks? Potential benefits include:

• Improved clarity and conservation awareness for developers;

• Places value on nature, introducing incentives for conservation;

• Increased reliability and funding of long-term conservation projects;

• Flexibility to ‘trade up’ and create larger conservation networks;

• Diversified income streams for landowners and land managers;

• Strengthened conservation partnerships; and

• Enhanced public support for conservation and developers.

However, biodiversity offsets are considered controversial by some. Critics argue that financially graded compensation schemes are not effective conservation strategies. Moreover, it is argued, they can even be counterproductive if implemented hastily or in the absence of a proper legislative and regulatory framework.

Other risks include:

• Perverse incentives - lowering the threshold of acceptance of conservation outcomes could inadvertently give developers a ‘licence to destroy’;

• Additionality – it may be hard to show that offsets result in outcomes that wouldn’t otherwise happen such as double counting of offsets against what may already be committed in terms of habitat creation in congruence with other government or developer commitments such as section 106 agreements;

• Displacement of impact - if not chosen properly, offsets could simply displace impacts that would have happened anyway, for example, if you create a protected area to offset the impacts of a mine, those who were previously harming biodiversity in the area (such as illegal timber operations or poaching) move to another location and have the same impact there;

• Restoration difficulties - some habitats, like grasslands and heathlands, can be difficult to restore in terms of the time and technical skills required, others, such as ancient woodland, are impossible to recreate within human timescales; and

• Definition and valuation of biodiversity - unlike carbon credits, biodiversity measurements cannot easily be based on a single, quantifiable unit. Defining and quantifying biodiversity losses and gains always involves a subjective element, as at present, measuring every component of biodiversity is not achievable and knowledge of biodiversity is incomplete (for example, at the microbial and genetic level). Other crucial issues may also be overlooked, such as the effects of habitat fragmentation on dispersal, ecosystem function, and the loss of genetic diversity, as well as social views on the definition and value of biodiversity.

The UK government has sought to mitigate the risks of implementing biodiversity offsets by commissioning the Making Space for Nature (Lawton Review). This has set out a number of principles for biodiversity offsetting, and the environment department (Defra) has encompassed the findings of the Lawton review into the pilot strategy on offsetting (Defra, 2013). This study assessed six projects and aimed to evaluate the application of offsetting in the voluntary pilot areas. The project goals were steered by the Lawton review and sought to:

• Help to use resources more effectively to deliver greater benefits for biodiversity; and

• Streamline the process of agreeing compensation for biodiversity loss as required by planning policy, in a cost effective way.

One of the most salient take home messages from the Lawton review was that offsets should be ‘bigger’, ‘better’, and more ‘joined up’. If we understand the principal aspirations of offsetting then we must also address the risks of offsetting previously alluded to. The Cross Sector Biodiversity Initiative (CSBI) timeline tool, (December 2013) provides guidance on the timing of offsetting delivery in order to minimise the risks of mitigation failure. Essentially, professional judgment will always play a pivotal role in evaluating risk of mitigation failure.

The greater the level of uncertainty on an offsetting project (technical, financial, or regulatory) the sooner the project should be implemented. As such, a reactive approach and possible switch to ‘plan B’ can be taken. The IUCN draft biodiversity offsets policy (2015) goes even further for offsetting, by suggesting that on the ground offset gains should be demonstrated before construction impact occurs.

Delivering ‘bigger’, ‘better’, and more ‘joined up’ habitats for biodiversity gain is clearly a positive aspiration. Biodiversity offsetting is here to stay; and appears to have strong political backing. Bespoke ‘project by project’ offsetting strategy will be a key driver as a ‘one size fits all’ approach is likely to be a blunt instrument.


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