Technical issues in the design and implementation of biodiversity offsets

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Technical issues in the design and implementation
of biodiversity offsets

• Jon Ekstrom
• IAIA, June 2007
• The Biodiversity Consultancy
• jonathan_at_thebiodiversityconsultancy.com
• www.thebiodiversityconsultancy.com

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Talk Structure

• What impacts are not offsetable?
• What to offset? Scope of impacts, intrinsic vs
  service values.
• Designing offsets a) intrinsic values
  b) Use values
• Where to offset? - near or far.
• When to offset? now or later.
• Who to offset? self, third-party or bio-bank?
• Implementing offsets offset management plans,
  financing, ME.

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1. What impacts are not offsetable?

• Major impacts on critical biodiversity values.
  ...But what are these critical values?
• Irreplaceable values such as
• Extinction or total loss of a species or
  habitat.
• Loss or irreparable damage to some culturally
  important sites.
• These are likely to be no-go areas like
  works of art

Caerulean Flycatcher
Tano Sacred Grove, Ghana
Works of Art
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• A note on showing no net loss or net gain
• Create new habitat / habitat for species.
• Restore or improve habitat.
• Prevent habitat loss and degradation averted
  risk. (cf avoided deforestation).

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Possible non-offsetable thresholds

• Component-based biodiversity
• Species extinction.
• Habitat extinction.
• Change in IUCN threat status (e.g. Vu En)
• Major irreversible impacts on
• Critically Endangered (Cr) species.
• Culturally critical sites
• Critical ecological processes.
• Etc.
• Some authorities setting their own e.g. Western
  Cape impacts of very high significance
• Site-based biodiversity
• Unique sites e.g. World Heritage Sites, Alliance
  for Zero Extinction sites.

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2. What to offset?
2a What is loss and what is gain? 2b Scope
of the impacts direct, third-party (secondary,
tertiary etc) 2c intrinsic / existence values
of biodiversity service and livelihood
values of biodiversity
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• 2a. What is loss and what is gain?
• Loss - Usually irreversible (human timescales,
  hence not
• mitigated) loss or degradation of biodiversity.
  E.g.
• deforestation.
• Real Gain?
• Creation of new habitat
• Improvement of existing habitat in poor
  condition.
• Prevention of further loss.
• Additionality - The gain must be additional to
  business as usual. E.g. Putting a fence around
  unthreatened habitat is not an offset.

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2b Primary vs third party impacts

• Primary impacts direct physical footprint
  (mine, roads etc)
• Third-party impacts
• Access to new land / opening up of forest etc.
• Honeypot effect unplanned migration /
  settlement growth
• Cumulative effects
• Invasive species
• Product stewardship
• Note Best practice Offset both primary and
  third party impacts. Prediction is difficult to
  get right, as in EIA.

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2b The third party footprint is very large
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2c. intrinsic and use values

• Intrinsic or existence values
• rare charismatic species, rare habitats
• Use values
• food, fuel, fibre
• (livelihoods - provisioning)
• water, climate, soil
• (regulating services)
• aesthetics, religion
• (cultural values)

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3. Designing offsets for intrinsic valuesFirst -
Decide on the most appropriate form of offset

• Like for like. First choice.
• Trading up to a higher priority habitat - if
  better conservation outcome.

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3. Designing offsets Second Identify and
measure biodiversity values

• Stage 1 Identify and prioritise biodiversity
  values.
• Stage 2 Decide how to measure loss and gain of
  values.
• Note this is a first principles approach based
  on generic biodiversity values. Individual (e.g.
  Provincial govt) approaches might be much simpler
  e.g. Offset must be same or better habitat, and
  of same or greater area than the impact site

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The challenge the y-axis of biodiversity value
does not exist
Impacts after offset
ve
Zero Impact
- ve
Biodiversity cannot be measured in a single
dimension like this ha of habitat?
Impacts After Avoidance
Unmitigated Impacts
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Stage 1 Identify and prioritise values

• Identify values at impact site the biodiversity
  values matrix.
• Determine value enablers e.g. Wetland dependent
  on groundwater flow.
• Prioritise this list of values and enablers (to
  decide which are essential in the offset)

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1.1 The Biodiversity Values Matrix
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1.2 Determine value enablers

• Conduct simple ecological dependency analysis for
  each value (or each major value).
• For example
• Gecko cannot survive without Palm sp. for egg
  laying.
• Wetland needs regular unpolluted groundwater flow.

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1.3 Prioritise the values and enablers
We want a table like this...
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How to prioritise?

• Often, many more values are identified than can
  be realistically incorporated into an offset.
• Need to prioritise to make simple, reduce
  transaction costs etc.
• Values can be prioritised by two factors
• Their significance (e.g. IUCN Critically
  Endangered vs Vulnerable).
• The size (magnitude / intensity / frequency /
  duration etc) of the impact predicted.
• Can do this formally or informally....

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For example....
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Stage 2 How to measure loss and gain of
biodiversity?

• Keep it as simple as possible, without losing
  credibility, objectivity, transparency.
• The problem to date e.g. In wetlands
  mitigation....
• Too simple ha of duck habitat
• Or too complex HEP, WET methods etc.

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Need to considerComposition, structure and
process

• Biodiversity whether genes, populations,
  species, communities or ecosystems is
• Composition what types e.g. What species.
• Structure how is it organised e.g. Habitat
  structure, population structure.
• Process interactions (e.g. Pollination) and
  services to humanity (water, soil).

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1. Benchmarks a way to measure

• Compare the impact site to a pristine,
  unimpacted, primary site the benchmark.
• Measure difference between these using standard
  methods.
• Compare the offset site to the benchmark.
• Calculate biodiversity gains possible at offset
  site.
• e.g. by reducing biodiversity loss, or
  enhancing biodiversity through management.

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Habitat structure benchmarking table
Impact site x 34 or Impact site y
78 ... we are condensing habitat structure
into a single dimension
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Scoring gains
Here, gain is being measured by the gains in
habitat quality through management
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potential improvement gain restoration
projected gain from active management
habitat
score

potential maintenance Gain averted risk
projected loss from allowable uses Or
probability of loss from future events
0
10 yr
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• Consider applying a multiplication ratio

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• Where a net gain is required.
• Where there is a risk of offset failure (ie when
  larger offsets are more likely to be successful).
• When offset viability or population viability is
  at stake a threshold ratio.
• When endangered habitats are concerned...

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There are only 20,000 ha of habitat X left in the
country, a 11 ratio leads to 50 loss of habitat
Whereas a 21 ratio leads to a 33 loss of habitat
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Whereas a 31 ratio leads to a 25 loss of
habitat
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Measuring use and livelihood values

• No similar objective methods to how no net loss
  or net gain, because the values are subjective
  the way people value nature. Economic valuation
  of nature is quite well developed

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Cultural
Regulating
Provisioning
Major types
Aesthetic, spiritual, recreational and
educational values
Regulation of climate, floods, disease and water
purification
Food, fresh water, wood and fibre, fuel.
Including
Mainly local
Local, national and global
Local, national
Major scales of relevance

• Mainly non-material values
• PRA
• RRA

• TEV framework
• EIA
• Modelling land-use change.
• Carbon sequestration methods.

• TEV framework
• PRA
• RRA
• Economic cost-benefit ranking
• Opportunity costs of protected areas.
• Etc

Some suggested methods
Social methods
Non-social methods
Social methods
Mainly
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4. Where to offset?
4.1 Offset site selection how to choose an
appropriate site. 4.2 Should an offset always be
near to the impact site?
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4.1 Offset site selection

• What values must be present at the offset site?
• What biological options are there?
• What socio-political constraints are there?
• What economic constraints are there?

X
X
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X
X
X
X
Socio-political
X
X
Economic
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4.2 Offsets near or far?
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Local offsets are first choice

• Local stakeholders are often most affected.
• Ecosystem service values similar e.g.
  hydrological functions within watersheds.
• Biodiversity values more similar e.g. site
  endemics.
• Offset management made easier.
• Use values often need local offsets.
• Political issues e.g. tribal boundaries.

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But local offsets are not always possible

• Practical challenges
• Is a land parcel available?
• Conservation challenges
• Does a local offset offer the best conservation
  or biodiversity value?

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When might distant offsets be appropriate?

• Where better conservation outcomes can be
  achieved trading up.
• Where only intrinsic values are being offset
  rare and endangered species are just as valuable
  at any distance!
• To provide global ecosystem services e.g. carbon
  sequestration.

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5. When to offset?

• When should the offset benefits appear?
• Before any impact has occurred?
• After residual impacts are
• clearly known?
• A rule of thumb is Best Before
• ? Offset benefits are secured.
• ? Lower risk of offset failure.
• ? No net loss is incurred at any time.

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6. Who does the offset?

• DIY The proponent, integrated into their
  Environmental Management System.
• Handover to govt agency or NGO.
• Outsource
• To an entrepreneurial NGO or other agency.
• Purchased from biodiversity banks.

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7. Sustainable offsets financial,
institutional, management

• A. Financial
• Financing trust funds and bonds provide
  security.
• But ensure that private sector offset financing
  does not replace the state.
• Much to be learnt from protected areas
  management.

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• B. Legal / institutional
• Two best solutions
• Make it part of EMS, and have a legacy clause in
  case of company takeovers.
• Outsource entirely (to other agency, or
  biodiversity bank).
• Worst case scenario offset fails because not
  legally binding, or change in company staff.

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• C. Management
• Offsets need management plans and very good ME.
• They are like protected areas plus need to
  verify gains, both intrinsic and use values.

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The way ahead..We need pilot projects and
experiments

• Protected areas management has matured through
  practice, not prescription.
• We need to experiment with offsets to understand
  what works, using the excellent guidance now
  available e.g. (BBOP, Western Cape Province
  South Africa, Victoria and NSW States Australia
  etc)

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