Biodiversity offsetting – learning from success and failure

The inclusion of biodiversity offsetting in national government frameworks, international lender standards and internal company policies has been rapidly gaining momentum over the last decade.

Used as a means to ensure that developers compensate for unavoidable ecological damage, biodiversity offsets (‘offsets’) are no longer restricted to developed nations. Colombia, Liberia, Mozambique and Mongolia, among others, are all in the process of developing offsetting policies.

What is biodiversity offsetting?

This film is also available in French, Indonesian, Portuguese and Spanish versions.

The emergence of offsets as a mechanism for compensating for the impacts of development can present both risk and opportunity from a biodiversity conservation and social perspective.

There is an ever-growing body of work looking at methods, metrics, and limits to offsets, but what about the practical challenges of implementing offset policy on the ground? Can the countries that are considering using offsets learn from the success and failure of established offsetting schemes? And are these lessons applicable to other countries and regions thinking of developing their own policies?

1 - No go area. Credit- Danny Burgess_FFI

For the past year, the Business and Biodiversity programme at Fauna & Flora International (FFI) has – with support from the Arcus Foundation – been investigating these tricky questions, and exploring how successful offsetting has been in addressing the impacts of development on biodiversity so far.

For answers, we have looked to the longest-established offset schemes in Australia and the USA and also to South Africa, which is drawing important lessons from the development and practical application of its offset policy.

Key dilemmas, challenges and tensions

In July 2015, FFI hosted a Biodiversity Offsets Learning Event to share our findings to date, and to learn about the opportunities and challenges in implementing offset policy in different geographies.

The event was attended by participants from 22 countries*, who work across a variety of sectors, from national governments, mining and energy companies and industry bodies to environmental consultancies, financial lenders, NGOs and academic experts.

2 - challenges. Credit- Danny Burgess_FFI

Also at the event was talented sketch artist, Danny Burgess, who illustrated the discussions as they were happening.

The result was a collection of insightful, entertaining and occasionally poignant illustrations that captured, amongst other things, the following five key dilemmas, challenges and tensions that were discussed by participants at the event…

1. Biodiversity offsetting must be embedded in the mitigation hierarchy. It should only be used as a last resort after the avoidance, minimisation and restoration of impacts. Unfortunately, we encountered numerous examples where developers and governments relied too heavily on offsetting without fully considering how impacts to biodiversity could be avoided or reduced using the hierarchy.

3 - last resort. Credit- Danny Burgess_FFI

2. We need to monitor and report on the success (or failure) of offset implementation to ensure accountability. All too often compliance monitoring and enforcement is weak or absent, and this is contributing to offset failure. The results of monitoring should be made publically available to improve transparency and assessment of offset implementation.

4 - metrics talk. Credit- Danny Burgess_FFI

3. Biodiversity offsets are not just about the biodiversity. The design and implementation of successful offsets need to consider socioeconomic context and impacts. The removal of biodiversity and ecosystem services from one area and the protection of similar goods and services elsewhere have real implications for local people. Honest and transparent communication, collaboration and effective coordination are needed among all stakeholders to ensure no stakeholder is forgotten.

5 - communities. Credit- Danny Burgess_FFI

4. Even robust policies face challenges. There are existing offsetting schemes that are generally considered to be robust but (as the recent Australian Senate inquiry illustrated) even these face challenges and have room for improvement.

Recommendations from the inquiry were lengthy, but included: the need to ensure that all offsets are additional to existing policy and laws; the need for greater emphasis on avoidance and mitigation; a requirement for additional compliance monitoring; the need to write the mitigation hierarchy and offsetting into legal frameworks rather than just non-statutory policy and separate guidance is required for marine offsets.

6 - EPBC. Credit- Danny Burgess_FFI

5. We need to consider the bigger picture. The below picture may be an exaggeration of a real world example, but it clearly depicts the issue: all too often, offsets are designed in a project vacuum and don’t connect with the broader landscape to reach their full potential.

7 - the wider context. Credit- Danny Burgess_FFI

Sharing lessons across sectors

Offsetting is still in its infancy, and whilst we have found lots of cases where offsets have not achieved their intended biodiversity benefits, lessons are clearly being learnt in many cases. At FFI, we too are learning and we need to keep learning (as much from failures as from successes) so that we can help ensure companies continue to improve the design and implementation of offsetting schemes.

Our research did uncover some promising cases that showed that, when used properly, biodiversity offsetting can benefit biodiversity. These examples are few but they show that offsetting can work.

The learning event brought together an incredibly diverse range of participants from different sectors and countries – allowing everyone to learn from our collective experiences. Some participants were able to share direct experience of implementing offsets, while others were able to take lessons learned at the event back to their respective industries and countries.

This collaborative effort is helping to build up a community of practice among FFI staff and partners to take the offset discussions forward and tackle the very complex dilemmas and challenges they pose for the conservation community.

Finally, all technical outputs from the learning event and research into offset implementation will be made available on the FFI website in due course. So please keep an eye out for them.

* The workshop participants were from: Australia, Belize, Brazil, Finland, France, Georgia, Guinea, Indonesia, Italy, Kyrgyzstan, Liberia, Namibia, Nicaragua, Philippines, Singapore, South Sudan, Spain, Switzerland, Tajikistan, Uganda, the United States and the United Kingdom.