This is an opinion post by Marianne Darbi, researcher at Leibniz Institute of Ecological Urban and Regional Development (Germany) and founder of the Biodiversity Offsets Blog. This comment is the expression of my own thoughts and experiences and as such is acknowledged as a fruitful contribution to the discussion on biodiversity offsets. If you want to react or clarify your own position (underpin or disprove my reasoning), please leave a reply below!
Recently, I have been asked the following question from one of my new contacts:
Do you think we are some way off being able to provide a commercial platform for biodiversity offsets?
This question and the way it was framed made be think and wrap up some of my experiences and thoughts on biodiversity offsets, so far.
Spoiler alert: In conclusion, I am doubtful whether biodiversity offsets will (or can!) successfully be delivered via a commercial platform, i.e. a market based approach in the near future. Read below, why I think so.
Biodiversity offsets aren’t the same everywhere
Coming back to the question, biodiversity offsets are now a global phenomenon and thus, I’d say, it depends very much on the location and context. Looking at the US, the answer is definitely no. There, offsets are already delivered via commercial offset providers to a large extent. For several years, it seems like Australia is on its way, but I am still doubtful about a real business scenario…
For Germany or the UK or Europe more generally, I don’t see this coming — at least not now and not in a real business dimension!
Besides, it would be necessary to qualify what a “commercial platform” means and what would be the consequences, i.e. whether this would be beneficial (and for whom).
German experiences teaches market mechanisms are just one tool to deliver offsets, not so much a business model on their own
In Germany we do have compensation pools and banking and also “compensation agencies” that provide biodiversity offsets or biodiversity credits to developers, but these are run by a multitude of different actors and there is not a significant market in terms of size and homogeneity (this is what I concluded from a study I did in 2009 — there hasn’t changed much since then, note also that impact mitigation is mandatory since 1976).
I have wondered why market based instruments don’t play a bigger role in this for a long time and thought that it would be the next step even for our mature German system that this grows broader. But I am not so sure about this anymore. Let me tell you why: Market mechanisms are just one tool to provide compensation and they have been used to overcome implementation deficits and increase efficacy and efficiency of biodiversity offsets under the German impact mitigation regulation (IMR). But they are a means not a goal.
The focus is very much on natural compensation and the best outcomes for nature and landscape and not so much on business models and thinking. This is also backed by the terminology, i.e. the term “habitat BANK” isn’t used in German IMR, instead the term “compensation pool” (Flächenpool) is employed.
Seen all the current critique (and also poor outcomes in some cases) that is maybe an approach to consider seriously.
The UK’s in the pilot stage and already faces a lot of “bad publicity”
And for the UK, it seems to be still in the pilot stage and also some political mistakes and a lot of propaganda have more or less labeled biodiversity offsets a “license to trash” (I can’t hear this anymore!) or “greenwashing”.
Sure, the Environment Bank is a commercial provider that is pioneering, but it’s still not sure where this leads to in the future — at least not for me…
Now, those are just two of the more prominent European examples — not to forget the French examples which have more of a “banking” touch, but not yet the dimension of a market and the recent enthusiasm to introduce conservation banks in Spain (see here and here).
Biodiversity offsets are not a business
In total, I admit, I can’t deny my geographic (Germany) and disciplinary (landscape and environmental planner) origins and would somehow sum up that while there may be a business case for biodiversity offsets, biodiversity offsets are not a business!