The legal and institutional dimensions of biodiversity offsetting — a workshop report by Megan Evans

This is a guest post by Megan Evans, a PhD researcher based at the  Fen­ner School of Envi­ron­ment and Soci­ety, at the Aus­tralian National Uni­ver­sity in Can­berra, Australia.

This com­ment has pre­vi­ously been pub­lished on Megan’s Blog. It is the expres­sion of the author’s 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 Megan’s rea­son­ing), please leave a reply below!

Over two days in Jan­u­ary 2015, fif­teen aca­d­e­mics and pro­fes­sion­als from law, eco­nom­ics, busi­ness, ecol­ogy and pol­icy came together to dis­cuss bio­di­ver­sity off­set­ting – but with a multi-disciplinary twist.  Held at the Fen­ner School of Envi­ron­ment and Soci­ety at the Aus­tralian National Uni­ver­sity, and organ­ised by Megan Evans, Stu­art Whit­ten, Andrew Mac­in­tosh and Mar­tine Maron, the over­all goal of the work­shop was to look at bio­di­ver­sity off­set­ting from a range of dif­fer­ent per­spec­tives, and to try and under­stand how such poli­cies can effec­tively deliver pos­i­tive envi­ron­men­tal out­comes.

Bio­di­ver­sity off­set­ting is a highly top­i­cal and increas­ingly pop­u­lar approach used to com­pen­sate for impacts on species and ecosys­tems as a result of devel­op­ment, and is the sub­ject of a large and grow­ing body of sci­en­tific research.  There has been sub­stan­tial work in devel­op­ing off­set met­rics which can accu­rately mea­sure bio­di­ver­sity losses and gains over time, as well as dis­cus­sion around the eco­log­i­cal lim­its of off­set­ting.  How­ever, there has been com­par­a­tively less atten­tion paid to how the pol­icy sys­tem as a whole influ­ences the pos­si­ble envi­ron­men­tal out­comes from bio­di­ver­sity offsetting.

For instance, what are the roles and respon­si­bil­i­ties of key organ­i­sa­tions involved in off­set­ting, how do these organ­i­sa­tions inter­act, and do they have suf­fi­cient capac­ity and ‘fit for pur­pose’ infor­ma­tion to imple­ment and over­see off­set pol­icy? What insti­tu­tional set­tings are in place to gov­ern the off­set­ting process? What legal mech­a­nisms are used to trans­fer and enforce off­set oblig­a­tions between dif­fer­ent par­tic­i­pants? Are there appro­pri­ately aligned incen­tives to stim­u­late mar­ket par­tic­i­pa­tion and to facil­i­tate mon­i­tor­ing and compliance?

By con­sid­er­ing these insti­tu­tional and organ­i­sa­tional dimen­sions of bio­di­ver­sity off­set mar­kets, in addi­tion to key cri­te­ria for the effec­tive imple­men­ta­tion of envi­ron­men­tal pol­icy, work­shop par­tic­i­pants were able to iden­tify a range of issues aris­ing from the off­set imple­men­ta­tion process which may be imped­ing pos­i­tive out­comes for biodiversity.

Good design doesn’t auto­mat­i­cally trans­late to good on-ground outcomes

Although it was recog­nised and agreed that the recently updated Aus­tralian envi­ron­men­tal off­sets pol­icy guide had intro­duced sci­en­tific rigor and improved trans­parency in the cal­cu­la­tion of off­set require­ments, this has not nec­es­sar­ily lead to improve­ments in other aspects of pol­icy imple­men­ta­tion. For exam­ple, it was pointed out that trans­lat­ing the off­set require­ments cal­cu­lated at the design phase into on-ground imple­men­ta­tion is still a rather com­plex process.

A bet­ter under­stand­ing by policy-makers of the chal­lenges that on-ground off­set providers can face (such as avail­abil­ity of native seed stock), and the unique insights these prac­ti­tion­ers can bring to the table (such as knowl­edge of new man­age­ment and restora­tion tech­niques), could help to ensure that the bio­di­ver­sity out­comes that are promised by off­set pro­pos­als are actu­ally achieved on the ground.

Pol­icy uncer­tainty leads to busi­ness uncer­tainty, which leads to uncer­tain bio­di­ver­sity outcomes

Bio­di­ver­sity off­set­ting is a rapidly evolv­ing pol­icy space, which means that gov­ern­ment poli­cies have been through a num­ber of changes in a rel­a­tively short space of time. For exam­ple, the Queens­land Gov­ern­ment intro­duced on aver­age, one new off­set pol­icy per year over the 2000’s. Although the intro­duc­tion of new poli­cies may often be moti­vated by a need to pro­vide more guid­ance or to bet­ter address the prob­lem at hand, the down­side is that it con­tin­u­ally shifts the goal-posts for busi­nesses who need to com­ply with such poli­cies when devel­op­ing envi­ron­men­tal impact state­ments and sub­mit­ting devel­op­ment applications.

Secur­ing an off­set site which can pro­vide ade­quate com­pen­sa­tion for the impacts of a devel­op­ment is a long, com­plex and expen­sive process, requir­ing nego­ti­a­tion with many par­ties includ­ing land­hold­ers, banks, bro­kers, Fed­eral, State and local gov­ern­ments and third-party off­set providers. If a pol­icy is changed or re-interpreted dur­ing this process, invest­ments of what can some­times be mil­lions of dol­lars tied to an off­set project may be at risk. This uncer­tainty can have a very real impact on what out­comes can be deliv­ered by an off­set policy.

Peo­ple, cul­ture and rela­tion­ships are cru­cial parts of the process

Although the main con­cern about bio­di­ver­sity off­set­ting is of course the species and ecosys­tems being impacted and com­pen­sated for, ulti­mately it is the indi­vid­u­als and organ­i­sa­tions who imple­ment the pol­icy that can influ­ence its effec­tive­ness. For exam­ple, if infor­ma­tion about what the off­set require­ments are, what legal mech­a­nisms are needed to secure the off­set, or what actions are required for reg­u­la­tory com­pli­ance are not ade­quately com­mu­ni­cated among all par­tic­i­pants, this can result in off­sets that pro­vide less endur­ing and effec­tive out­comes for bio­di­ver­sity.  Recog­nis­ing that the moti­va­tions and objec­tives of indi­vid­u­als and organ­i­sa­tions involved in off­set­ting will often dif­fer, is cru­cial. Iden­ti­fy­ing where there may be oppor­tu­ni­ties to bet­ter align pol­icy processes in a way that is mutu­ally ben­e­fi­cial could help to improve out­comes for bio­di­ver­sity through off­set­ting in the long term.

More changes are on the hori­zon, though not nec­es­sar­ily for the better

Bio­di­ver­sity off­set­ting is cer­tainly an active pol­icy space in Aus­tralia. In addi­tion to the recent Sen­ate inquiry, there have been new poli­cies intro­duced in Queens­land and New South Wales dur­ing 2014. Con­cerns have been raised about the relax­ation of key pol­icy prin­ci­ples in these new poli­cies, such as the ‘like-for-like’ prin­ci­ple (ensur­ing an off­set is the same species or ecosys­tem type as the one impacted), per­mit­ting mine reha­bil­i­ta­tion (which is already required under the NSW Min­ing Act) to be counted as an off­set, and allow­ing up to 100% of an off­set to be ‘indi­rect’ (which is really a change in the def­i­n­i­tion of the term ‘off­set’).  Although these changes have likely been dri­ven by pol­i­tics rather than sci­ence, this is sim­ply a real­ity in the mak­ing of pub­lic pol­icy – which results from an inter­ac­tion between dif­fer­ent val­ues, inter­ests and resources. The role which researchers can take in this process is to do pro­vide the best pos­si­ble sci­ence, while remain­ing cog­nisant of this broader con­tes­ta­tion of ideas.

This work­shop was gen­er­ously sup­ported by the CSIRO and the ARC Cen­tre of Excel­lence for Envi­ron­men­tal Decisions.



The legal and institutional dimensions of biodiversity offsetting — a workshop report by Megan Evans — 3 Comments

  1. Very use­ful note on the work­shop which res­onates with the devel­op­ing UK sys­tem. We still have too much igno­rance of the ben­e­fits of the sys­tem here because com­men­ta­tors have not read all the doc­u­men­ta­tion and still think it is a licence to trash. In fact it is the reverse. In the UK the issue is more about cap­tur­ing the impacts on rel­a­tively low lev­els of bio­di­ver­sity from gen­eral, but nonethe­less, large scale devel­op­ment cur­rently hap­pen­ing (eg 1 mil­lion houses cur­rently in the plan­ning sys­tem that will cre­ate sub­stan­tial cumu­la­tive impacts in the wider coun­try­side yet almost no com­pen­sa­tion is cur­rently being secured). Had off­set­ting been adopted for these it would have pro­vided more invest­ment annu­ally into the nat­ural envi­ron­ment than we cur­rently pro­vide through all our agri-environment schemes (which are any­way, short-term off­set fund­ing mech­a­nisms given to farm­ers for the envi­ron­men­tal impacts cre­ated by farm­ing). The gov­ern­ment, despite being advised and rec­om­mended to adopt a manda­tory approach through the plan­ning sys­tem, is cur­rently only inter­ested in a vol­un­tary approach which makes it dif­fi­cult to build a mar­ket. One county in the UK has adopted a manda­tory approach and it is the only area where off­set­ting is scal­ing up. It will, over a rel­a­tively short time period, pro­vide a mas­sive boost to wildlife habi­tat in that part of the coun­try and also fund­ing for plan­ning author­ity ecol­o­gists to under­take the met­ric cal­cu­la­tions of all devel­op­ments in the future. As we get this approach to work, the model is highly likely to scale-up across the coun­try, enabling a trans­par­ent mech­a­nism by which plan­ning author­i­ties can deliver their legal bio­di­ver­sity duties.

  2. Very inter­est­ing note on your work­shop! I was par­tic­u­larly inter­ested to note your remarks about the com­plex­ity and chal­lenges of actu­ally secur­ing and man­ag­ing appro­pri­ate site for bio­di­ver­sity off­set­ting. The need for multi-stakeholder work to ensure sites are prop­erly devel­oped and man­aged is cru­cial to their suc­cess. Unfor­tu­nately, I’ve found that in the UK there there is often too lit­tle under­stand­ing or trust amongst many of the stake­hold­ers that need to be involved — hence the unhelp­ful knee-jerk reac­tion of some envi­ron­men­tal­ist that bio­di­ver­sity off­set­ting is “a licence to trash”. Per­haps it would help if the devel­op­ment and pub­li­ca­tion of more work was facil­i­tated that high­lights the mul­ti­dis­ci­pli­nary and multi-stakeholder nature of the issues involved.

    • Love your analy­sis of the sit­u­a­tion in the UK, Der­rick! It is frus­trat­ing that so much energy is spent debat­ing and cam­paign­ing against each other when the best out­come can always be achieved if there is under­stand­ing and coop­er­a­tion among stakeholders…

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>