An Introduction to Biodiversity Offsets

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An Introduction to Biodiversity Offsets
Assheton CarterConservation International

• The Role of Biodiversity Offsets in Conservation
  an Open Discussion
• Friday September 29, 2006
• Pretoria, South Africa

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An Overview of Offsets and BBOP

• Biodiversity Offsets 101
• What, Why and How
• Policy context
• Issues we need to address
• Business and Biodiversity Offsets Programme

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What are biodiversity offsets?
Conservation actions intended to compensate for
the residual, unavoidable harm to biodiversity
caused by development projects, so as to ensure
no net loss of biodiversity. Before developers
contemplate offsets, they should have first
sought to avoid and minimise harm to
biodiversity. ten Kate, K.., Bishop, J., and
Bayon, R. (2004). Biodiversity offsets Views,
experience, and the business case. IUCN and
Insight Investment.
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Biodiversity offsets and impact mitigation
Biodiversity impact
Negative impact
Positive Impact
Reduce impact to near zero
Avoid Minimize Replace Offset
Contribute
The mitigation hierarchy
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Biodiversity offsets and impact mitigation
Avoid
ACCEPTABLE IMPACT
Minimize
Rescue
Decision maker
Restore
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Biodiversity offsets and impact mitigation
Avoid
Minimize
Rescue
Decision maker
OFFSET
Restore
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A brief review of biodiversity offsets commitments

• Legislation and Regulation
• First formalised in 1970s USA system of wetland
  mitigation.
• Now legislation in USA, Canada, Europe (25),
  Brazil, Switzerland, Australia
• Policy under discussion in New Zealand, Uganda
  and Mexico.
• The Financial Sector
• Multilaterals IFC, IDB
• Equator Banks
• Fund managers

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A brief review of biodiversity offsets commitments
Groups of companies ? EBI BP, Chevron
Texaco, Shell, Statoil, CI, FFI, Smithsonian,
IUCN, TNC No net loss of biodiversity at
project site. Should be minimum standard. ?
ICMM 15 leading mining companies an option for
addressing impacts White Paper Corporate
policies ? Principles no harm no net
loss positive contribution net benefit
enhance biodiversity ?
BP Lord Browne, CEO We can have a real,
measurable and positive
impact on the biodiversity of the world. (April
2000) ? Rio Tinto net positive effect
- committed to accomplishing this through
offsets. Company activities ? on-site
EIA, mitigation, rehabilitation, restoration in
concession contracts, host
government production supply agreements ?
off-site some specific biodiversity
conservation activities
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Global policy context for offsets

• To achieve, by 2010, a significant reduction of
  the current rate of biodiversity loss at the
  global, regional and national level
• - CBD Conference of Parties, 2002
• Halve, between 1990 and 2015, the proportion of
  people whose income is less than 1 a day (Goal
  1, Target 1)
• - UN Millennium Development Goals
• We resolve to protect our natural resource
  base in support of development
• - 2005 World Summit Outcome

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Why should business offset the harm it causes
to biodiversity ?

• Legal requirements
• Law that mandates offset (e.g. US, EU, Brazil,
  Australia)
• Law that facilitates offset (e.g. EIA,
  planning law,
• 
  concession agreements)
• The business case
• for voluntary biodiversity offsets

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The business case for biodiversity offsets

• Access to land and resources Significant
  coincidence between development conservation
  interests.
• Maintaining license to operate Address concern
  for biodiversity loss
• Increased regulatory goodwill Good
  relationships with regulators can lead to faster
  permitting. Preferred partner status.
• Social license to operate Better relationships
  with local communities, government regulators,
  environmental groups, employees.
• Flexibility location/scale of rehabilitation.
• Efficiency often more cost-effective than
  on-site rehabilitation.
• Reputation benefits e.g. easier access to capital
  and labour
• Influence emerging regulation and policy. First
  mover advantage.

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BBOP
The conservation case

• More and better conservation
• Balancing development and conservation. More
  conservation efforts than status quo.
• Mainstreaming biodiversity into business
  government planning
• Additional finance.
• Focus conservation efforts on priorities, in
  context of landscape/regional planning.

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BBOP
The conservation case

• Focus conservation efforts on priorities, in
  context of landscape/regional planning.
• Trade small compromised sites for larger areas
  with better prospects.
• Greater connectivity of areas.
• Potential for pooled resource and development of
  conservation based markets e.g. wetland banking.

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The Atlantic Forest Central Corridor

• Basic data
• 3 million hectares total
• Only 100K ha protected by the Government
• Strong presence of eucalyptus forests for
  cellulose
• 1/3 of the forest companies land are natural
  areas, but highly fragmented

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Veracel Private Reserve ( 6k ha)
Pau Brasil National Park ( 15k ha)
Monte Pascoal National Park ( 35K ha)
Descobrimento National Park ( 30K ha)
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Veracel Private Reserve
Pau Brasil National Park
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Veracel Private Reserve
40,000 50,000 ha Ecological Corridor
Pau Brasil National Park
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Offset livelihood component

• Address underlying causes of loss of biodiversity
  at offset sites
• Meet biodiversity-related livelihood needs of
  local communities (e.g food, energy)
• Link offsets to achieving priority development
  outcomes.

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Issues to address (1)

• Social equity how to ensure equitable
  distribution of costs and benefits of offsets,
  while respecting the rights and concerns of local
  and indigenous communities?
• Currency can offsets provide comparable
  biodiversity and livelihood benefits as the
  original ecosystem? How to measure impact and
  determine a suitable offset?
• Responsibility how far does responsibility for
  environmental impact extend? Should developers
  offset the indirect impacts of their projects
  (e.g. labour migration)?

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Issues to address (2)

• Additionality how to ensure that offsets
  deliver new and additional biodiversity benefits,
  and that biodiversity loss is not simply
  displaced (leakage)?
• Sustainability how to ensure that biodiversity
  offsets are secured in perpetuity or at least for
  the duration of the impact?
• Timing should offsets be in place prior to any
  environmental impact? How can this be achieved?
• Peformance standards need credible metrics and
  governance for biodiversity offsets, including
  effective mechanisms for stakeholder
  participation and oversight

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Summary Opportunities Risks

• Opportunities
• Conservation
• more better conservation, mainstreaming
  mechanism, gives value to biodiversity
• Business
• economically efficient means to secure license to
  operate reputation influence policy market
  mechanism not regulation
• Policy-makers
• involve private sector in achieving 2010 target
  use market mechanism
• Local communities
• means to minimise impact on livelihoods and
  secure additional benefits

• Challenges
• No substitute for no go areas
• Failure to deliver
• Controversy
• Credible standards

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The Business Biodiversity Offsets Program
Ensuring no net loss of biodiversity in
development projects through prioritised in
situ conservation and livelihood outcomes
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Vision for the Program

• All future major development projects
• (in the private and public sectors alike),
• and certainly those which will have a
  significant impact on biodiversity,
• should ensure that they bring about no net
  loss
• (and preferably a net gain) in biodiversity.

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Objectives and Structure
? PILOT PROJECTS Portfolio of pilot
projects worldwide demonstrating no net loss
of biodiversity and livelihood benefits ?
TOOLKIT How to toolkit on offset design
and implementation ? POLICY Influence
policy on offsets to meet conservation and
business objectives.
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Advisory Committee

• The National Ecology Institute, Mexico
• The National Environmental Management Authority,
  Uganda
• The Nature Conservancy
• The Royal Botanic Gardens, Kew
• The South African National Biodiversity Institute
• The United Nations Development Program (Footprint
  Neutral Initiative)
• The US Fish and Wildlife Service
• Wageningen University, Netherlands
• The World Conservation Society
• RioTinto

• Birdlife International
• Cambridge Centre for Conservation Policy
• The Centre for Research-Information-Action for
  Development in Africa
• Conservation International
• Department of Sustainability Environment,
  Victoria, Australia
• Fauna and Flora International
• Forest Trends
• Insight Investment
• IUCN, The World Conservation Union
• The Biodiversity Neutral Initiative
• The London Zoological Society
• The Ministry of Ecology and Sustainable
  Development, France
• IDB
• Dynatec Amatovy
• BOTSOC

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Learning Network

• ABN-Amro
• Earthcall
• Goldman Sachs
• Int. Councl on Mining Mtls
• The World Bank
• The World Wildlife Fund
• The International Finance Corporation
• The International Petroleum Industry
  Environmental Conservation Association
• The Katoomba Group (over 200 international
  experts dedicated to advancing markets for
  ecosystem services)
• The Secretariat of the Convention on Biological
  Diversity
• The World Bank Institute
• The World Resources Institute
• The Katoomba Group
• BG Group
• Fundaçao Boticario...

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What are pilot projects?

• New developments in the field
• Objective demonstrate no net loss of
  biodiversity
• Diverse portfolio
• Business sectors
• oil gas, mining, housing, tourism
• Capex
• US7bn to ltUS500k
• Ecosystems
• tropical forest, desert, marine
• Policy and economy settings
• Regulated developed countries- USA
• Poorly regulated and enforced Ghana, Uganda,
  etc..

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Current pilot projects

• Gas to liquid project in Middle East
• Gold mine in Ghana
• Tourism lodge in Uganda
• Housing development in US NW
• Platinum mine in South Africa

• Tourism complex and road in Kenya
• Integrated mine, pipeline and port in Madagascar
• Iron ore mine in Australia or Guinea

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How ?

• Review commitment to mitigation
• Review ESHIA for completeness and baseline data
  for offset design
• Measure/quantify impact
• Identify offset options (priority conservation
  and livelihood projects)
• Screen for viability and feasibility
• Design
• Implement and monitor

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The Business Biodiversity Offsets Program
www.forest-trends.org/biodiversityoffsetprogram
Kerry ten Kate ktenkate_at_forest-trends.org Assheto
n Carter a.carter_at_celb.org Mira
Inbar minbar_at_forest-trends.org Mahlette
Betre m.betre_at_celb.org