0.1 Com­mu­ni­cat­ing best prac­tice in mit­i­ga­tion through a pol­icy on bio­di­ver­sity offsets

This sec­tion sum­ma­rizes the key ele­ments of off­set­ting best prac­tice upon which the Tech­ni­cal Study Group believes there is suf­fi­cient agree­ment for IUCN to rec­om­mend them to its Mem­bers through an off­set pol­icy:
• Bio­di­ver­sity off­sets have the poten­tial to pro­vide net gains in bio­di­ver­sity in the right con­text, but this has rarely yet been realised in prac­tice (Sec­tion 2).
• The high-level prin­ci­ples of off­set­ting best prac­tice are rea­son­ably well agreed (Sec­tion 2).
• The prin­ci­pal rea­son that off­sets fail to achieve No Net Loss or Net Gain appears to be lack of clear pol­icy require­ments that offer unam­bigu­ous guid­ance to devel­op­ers and off­set providers, lim­ited capac­ity for imple­men­ta­tion of mit­i­ga­tion, inad­e­quate mon­i­tor­ing and enforce­ment, and – par­tic­u­larly – insuf­fi­cient polit­i­cal will to require and enforce best prac­tice in off­set­ting (Sec­tion 2).
• Off­sets should be applied within the con­text of the mit­i­ga­tion hier­ar­chy (Sec­tion 3).
• Off­sets should be planned within a dynamic land­scape con­text, tak­ing into account cumu­la­tive impact sce­nar­ios (Sec­tion 3).
• Off­set sys­tems should aim to achieve at least No Net Loss and prefer­ably a Net Gain for all bio­di­ver­sity, through address­ing – as a min­i­mum – sig­nif­i­cant resid­ual direct and indi­rect impacts (Sec­tions 4 and 5).
• In prac­tice, it is nec­es­sary to focus spe­cific off­set­ting mea­sures and mea­sure­ment of losses and gains on good sur­ro­gates of broader bio­di­ver­sity and on bio­di­ver­sity of the high­est con­ser­va­tion con­cern (e.g. rare and restricted bio­di­ver­sity) (Sec­tion 4).
• Some – per­haps many – impacts are so sig­nif­i­cant that they may not be accept­able to soci­ety (in which case projects will not be per­mit­ted) or can­not be off­set, owing to the high risk of fail­ure (Sec­tion 4).
• For impacts with a low sig­nif­i­cance in terms of bio­di­ver­sity con­ser­va­tion, a sim­pli­fied approach will be prefer­able in order to avoid trans­ac­tion costs that are high rel­a­tive to the costs of mit­i­ga­tion mea­sures, includ­ing off­sets (Sec­tion 4).
• Soci­etal val­ues con­cern­ing bio­di­ver­sity should be cap­tured within off­set goals (Sec­tion 5).
• Off­set met­rics should sep­a­rately include both sur­ro­gacy mea­sures (often habitat-based) and mea­sures for high con­ser­va­tion pri­or­ity bio­di­ver­sity that is poorly rep­re­sented by those sur­ro­gates (Sec­tion 6).
• Off­set met­rics should strike a bal­ance between lim­it­ing sub­sti­tu­tion and estab­lish­ing a cur­rency that is fun­gi­ble enough to facil­i­tate exchange (Sec­tion 6).
• Con­ser­va­tion out­comes from bio­di­ver­sity off­sets should be ‘addi­tional’ (Sec­tion 7).
• It is prefer­able to secure off­set out­comes prior to impacts in order to address tem­po­ral loss and reduce the risk of off­set fail­ure (Sec­tion 8).
• The con­ser­va­tion out­comes of off­sets should endure at least as long as the impacts are felt (Sec­tion 8).
• Pub­lic sec­tor devel­op­ments should abide by the same off­set require­ments as pri­vate sec­tor devel­op­ments (Sec­tion 9).
• It is desir­able to allow a level of choice with a vari­ety of options for how off­sets can be imple­mented, but there should be equally exact­ing stan­dards for all forms of off­set imple­men­ta­tion (Sec­tion 10).
• Short­com­ings in mon­i­tor­ing, eval­u­a­tion and enforce­ment account for a sig­nif­i­cant pro­por­tion of the cases where mit­i­ga­tion mea­sures, includ­ing off­sets, have failed to deliver their goals (Sec­tion 11).

0.2 Using knowl­edge prod­ucts to inform offsetting

The flag­ship knowl­edge prod­ucts mobi­lized through IUCN (2014) have sig­nif­i­cant poten­tial to inform: the man­ner in which the mit­i­ga­tion hier­ar­chy is applied (Sec­tion 2); the scope of off­set poli­cies (Sec­tion 4); the met­rics and the exchange rules (e.g. ‘like for like or bet­ter’ (Sec­tion 6); the off­set­ting activ­i­ties that could be con­sid­ered as addi­tional (Sec­tion 7) and the site selec­tion of bio­di­ver­sity off­sets. For exam­ple, pri­or­i­ties for mea­sure­ment dur­ing off­set­ting may be con­sid­ered to be par­tic­u­larly vul­ner­a­ble species or ecosys­tems (in respec­tive Red Lists) or par­tic­u­larly irre­place­able sites (Key Bio­di­ver­sity Areas). The value of knowl­edge prod­ucts in inform­ing off­set­ting and other devel­op­ment deci­sions is not dis­cussed in depth here since it has been elab­o­rated recently by IUCN (2014). IUCN could also dis­sem­i­nate, among its Mem­bers, knowl­edge prod­ucts rel­e­vant to off­set­ting that have not been directly mobi­lized by ini­tia­tives, such as the Busi­ness and Bio­di­ver­sity Off­sets Pro­gramme (BBOP).

0.3 Con­ven­ing IUCN Mem­bers and other stake­hold­ers glob­ally to give guid­ance on com­plex issues

Guid­ance is par­tic­u­larly nec­es­sary on:
• Whether there should be infor­ma­tion on the man­ner in which each of the steps within the mit­i­ga­tion hier­ar­chy should be applied and, if so, what that infor­ma­tion should be (Sec­tion 3);
• Whether and how to apply a risk-based approach to the mit­i­ga­tion hier­ar­chy (Sec­tion 3);
• How to design off­sets within dynamic land­scapes that are likely to change dur­ing off­set dura­tion (e.g. owing to change in other threat­en­ing processes, such as pop­u­la­tion growth or cli­mate change) (Sec­tion 3);
• Where to place off­sets in rela­tion to impacts, in vary­ing con­texts, includ­ing when and how to use com­pos­ite off­sets (in more than one loca­tion), to address all the bio­di­ver­sity com­po­nents impacted by an indi­vid­ual project, or aggre­gated off­sets to clus­ter together off­sets for a num­ber of dif­fer­ent projects (Sec­tion 4);
• The appro­pri­ate level of ambi­tion for off­set poli­cies (e.g. No Net Loss vs. Net Gain: Sec­tion 5);
• Con­sis­tency of use and inter­pre­ta­tion of terms such as No Net Loss and Net Gain (Sec­tion 5);
• Resolv­ing any con­flicts between soci­etal val­ues and ‘intrin­sic val­ues’ (Sec­tion 5);
• Estab­lish­ing exchange rules in order to sup­port con­ser­va­tion pri­or­i­ties, while also ensur­ing that the off­set sys­tem runs smoothly (Sec­tion 6);
• How to deter­mine the addi­tion­al­ity of activ­i­ties within exist­ing pro­tected areas, and avert­ing risks in juris­dic­tions where gov­ern­ment pol­icy or invest­ment should already pre­vent such risks (Sec­tion 7);
• Whether, and if so how, it is pos­si­ble to demon­strate addi­tion­al­ity (Sec­tion 7);
• Best prac­tice in deter­min­ing the base­line risk of loss for averted risk off­sets and in quan­ti­fy­ing secu­rity gains (Sec­tion 7);
• Tack­ling leak­age in off­set design and imple­men­ta­tion (Sec­tion 7);
• When off­set gains should be made, par­tic­u­larly in the many cases where it is only prac­ti­cal to achieve gains after the rel­e­vant impacts (Sec­tion 8);
• The appro­pri­ate dura­tion of off­sets and how to demon­strate secure long-term off­set out­comes (or ful­fil off­set objec­tives when ini­tial activ­i­ties have failed) in coun­tries where the land and the prop­erty laws do not cater for long-term secu­rity of land-use (Sec­tion 8);
• The stan­dards needed for imple­men­ta­tion (e.g. devel­op­ment and deliv­ery of con­ser­va­tion cred­its) (Sec­tion 10);
• How gov­ern­ments can develop roadmaps for estab­lish­ing off­set sys­tems and market-based approaches to off­set imple­men­ta­tion (Sec­tion 10); and
• Estab­lish­ing effec­tive mon­i­tor­ing, eval­u­a­tion and enforce­ment sys­tems (Sec­tion 11).

0.4 Con­ven­ing IUCN Mem­bers and other stake­hold­ers nation­ally to agree key national or local level issues

A num­ber of issues iden­ti­fied in this report are context-dependent and thus best resolved through stakeholder/societal engage­ment at a national or local level. Con­ven­ing stake­hold­ers in national or local level processes is impor­tant, among other rea­sons, in order to:
• Iden­tify soci­etal val­ues of bio­di­ver­sity and incor­po­rate them into off­set goals in any given con­text (Sec­tion 5);
• Iden­tify the types and pri­or­ity level of bio­di­ver­sity and impacts which should, and can fea­si­bly, be included in off­set­ting sys­tems (Sec­tion 4);
• Iden­tify higher thresh­olds for accept­able sig­nif­i­cance of impacts (Sec­tion 4);
• Iden­tify lower thresh­olds for accept­able sig­nif­i­cance of impacts, enabling a sim­pli­fied sys­tem to deliver more effi­cient con­ser­va­tion out­comes than a sophis­ti­cated off­set sys­tem (Sec­tion 4);
• Deter­mine the scope and nature of com­pen­sa­tion activ­i­ties when all a project’s impacts are not capa­ble of being off­set (Sec­tion 4);
• Assess the capac­ity needed for suc­cess­ful imple­men­ta­tion (Sec­tion 10);
• Deter­mine the stan­dards needed for imple­men­ta­tion (e.g. devel­op­ment and deliv­ery of con­ser­va­tion cred­its) (Sec­tion 10); and
• Deter­mine, based on lessons learned (Sec­tion 0.5), the most context-appropriate mech­a­nisms and stake­holder roles and respon­si­bil­i­ties for reg­u­lat­ing, admin­is­ter­ing (Sec­tion 9) and imple­ment­ing off­sets (Sec­tion 10), and mon­i­tor­ing out­comes (Sec­tion 11).

0.5 Increas­ing IUCN Mem­ber par­tic­i­pa­tion in the off­set­ting com­mu­nity of practice

At the level of indi­vid­ual projects, civil soci­ety IUCN Mem­bers could con­tribute guid­ance dur­ing the design and imple­men­ta­tion of mit­i­ga­tion mea­sures, includ­ing bio­di­ver­sity off­sets. They could pro­vide prac­ti­cal guid­ance and con­struc­tive crit­i­cism to off­set plan­ners and prac­ti­tion­ers within a safe learn­ing envi­ron­ment, in order to increase empir­i­cal evi­dence of fac­tors influ­enc­ing off­set failure/success (Sec­tion 2).
Gov­ern­men­tal IUCN Mem­bers could share expe­ri­ences and lessons learned on:
• Whether there should be infor­ma­tion on the man­ner in which each of the steps within the mit­i­ga­tion hier­ar­chy should be applied, and whether and how to apply a risk-based approach (Sec­tion 3);
• How to design off­set poli­cies that avoid or man­age con­flict with pro­vi­sions in other areas of pol­icy, such as per­verse incen­tives or pro­mo­tion of projects that bring eco­nomic gains, but have neg­a­tive social and envi­ron­men­tal impacts (Sec­tion 3);
• How to estab­lish the fun­da­men­tal func­tion and rules of the sys­tem that gov­erns off­set design and imple­men­ta­tion, such as met­rics and exchange rules includ­ing ‘trad­ing up’ (Sec­tion 6);
• How to design poli­cies that enable bio­di­ver­sity, car­bon, water and devel­op­ment activ­i­ties to be planned within the same land­scape and still ensure addi­tion­al­ity (Sec­tion 7);
• The rel­a­tive effec­tive­ness of vol­un­tary and manda­tory off­set sys­tems (Sec­tion 9);
• How to bal­ance the need for clar­ity and con­sis­tency in pol­icy at the national level with locally spe­cific con­di­tions and del­e­gated author­ity (Sec­tion 9);
• How to deal with over­lap­ping and some­times con­tra­dic­tory require­ments from dif­fer­ent juris­dic­tions (Sec­tion 9);
• How to set up off­set sys­tems that embrace mul­ti­ple dif­fer­ent roles for gov­ern­ment (Sec­tion 9);
• How to deal with poten­tial con­flict of inter­est between dif­fer­ent gov­ern­ment func­tions and ensure pro­bity (Sec­tion 9);
• The suc­cess and fail­ure of off­sets under dif­fer­ent forms of imple­men­ta­tion (Sec­tion 10); and
• The strengths and weak­nesses of dif­fer­ent approaches taken at the national lev­els (in run­ning off­sets sys­tems) and at the project level (in run­ning indi­vid­ual off­sets) to mon­i­tor­ing, eval­u­a­tion and enforce­ment (Sec­tion 11).