A biodiversity offset accounting system

Improving the estimation of ecological equivalence within offset exchanges


Key messages:
  • Ecologically robust, user-friendly decision support tools improve the transparency of biodiversity offsetting and assist in the decision making process
  • We developed a disaggregated accounting model to balance biodiversity trades within a ‘no-net-loss’ framework
  • The model improves on other models that use aggregated metrics by describing and explicitly accounting for biodiversity elements of interest that are being exchanged

Biodiversity offsetting is a simple idea that brings with it a large and complex set of issues. The idea is that if a development causes biodiversity losses in one place, then an offset can generate equivalent gains elsewhere (Figure 1). The concept has both critics and supporters. Some say the process poses risks to biodiversity, while others believe it has potential to enhance biodiversity conservation. Making the concept operational has many challenges (and contentions) including ethical, social, technical and governance considerations (see Decision Point #91). However, despite the many unresolved issues and differences of opinion, the practice of biodiversity offsetting is becoming increasingly common in many countries around the world (see Decision Point #85). Therefore, it is critical that we develop tools and processes that resolve or reduce issues where we can (and are honest about the consequences where we cannot).

One of the technical issues associated with offsetting is the challenge in achieving ecological equivalence between biodiversity that is lost (due to the impact of development) and biodiversity which is gained (due to an offset action). Evaluating this exchange requires a ‘currency’ to describe the biodiversity of interest, and a model to balance the losses and gains.

Existing methods tend to use aggregated currencies which combine multiple measures of biodiversity into a single unit. But there is a risk in doing this. Bundling of biodiversity into a single unit can sometimes obscure (conceal) what is being traded in an offset exchange. Concealed trades can compromise biodiversity conservation because when specific elements of biodiversity are not explicitly accounted for, they are either offset implicitly (but we wouldn’t know), or lost in the exchange contributing to continuing trajectories of biodiversity decline. To reduce these risks a team of researchers and practitioners from Australia and New Zealand developed an accounting model to transparently design and evaluate biodiversity offsets (Maseyk, 2016).

Figure 1: A highly simplified illustration of the goal of no net loss of biodiversity values. Values are lost due to the impact of the development and gained through management actions to improve the area and condition of the offset site. A major challenge is making sure that the values gained in the offset are equivalent to the values lost. The Disaggregated Model individually evaluates whether gains balance losses for all elements of biodiversity of interest and makes the tradeoffs more transparent. (This diagram is in the report Guidance on Good Practice Biodiversity Offsetting in New Zealand available at http://www. doc.govt.nz/documents/our-work/biodiversity-offsets/the-guidance.pdf).

Figure 1: A highly simplified illustration of the goal of no net loss of biodiversity values. Values are lost due to the impact of the development and gained through management actions to improve the area and condition of the offset site. A major challenge is making sure that the values gained in the offset are equivalent to the values lost. The Disaggregated Model individually evaluates whether gains balance losses for all elements of biodiversity of interest and makes the tradeoffs more transparent. (This diagram is in the report Guidance on Good Practice Biodiversity Offsetting in New Zealand available at http://www.doc.govt.nz/documents/our-work/biodiversity-offsets/the-guidance.pdf).

The structural foundation of the model we developed uses a hierarchical framework that categorises biodiversity elements into three levels: type; component; and attribute (Figure 2). These three levels collectively describe the biodiversity at both the impact and offset sites.

The model uses disaggregated area-by-condition currencies to calculate the ‘net-present biodiversity value’ (NPBV) for each biodiversity attribute. The NPBV is used to evaluate whether losses at the impact site and gains at the offset site balance accounting for time and uncertainty, and thus whether no net loss has been achieved.

The model’s core outputs clearly identify ‘winners and losers’ within an exchange when no net loss is demonstrated for some biodiversity attributes but not for others. Our model also aggregates attributes to evaluate NPBV and demonstrate no net loss at the biodiversity component level.

However, because outputs are produced for each attribute as well as each component, any tradeoffs between attributes (accepting loss in some in return for gains in another) required to achieve no net loss at the component level remains explicit. This improves transparency and assists decision making as to whether the tradeoffs, and thus the offset proposal, are ecologically and socially acceptable.

Figure 2: The hierarchical framework underpinning the structural foundation of the model (with an example of biodiversity type, component and attribute at the bottom). Collectively, the levels describe ‘what we care about’ in the context of a biodiversity offset proposal. Each biodiversity type impacted by a development is entered into a separate model template and as many components and

Figure 2: The hierarchical framework underpinning the structural foundation of the model (with an example of biodiversity type, component and attribute at the bottom). Collectively, the levels describe ‘what we care about’ in the context of a biodiversity offset proposal. Each biodiversity type impacted by a development is entered into a separate model template and as many components and attributes as required to describe the biodiversity type can be entered into the model.

All currencies, will aggregate to some degree. What is critical is that the biodiversity elements of interest are individually described, measured, and evaluated. For example, if maintaining critical components of a forest habitat is the goal and canopy cover is one of those components, it may be acceptable to aggregate canopy cover of functionally similar species within a measure to represent canopy cover. However, this level of aggregation would not be appropriate if the target biota was individual tree species that contribute to canopy cover, or if a target species had a preference for a particular tree species.

The disaggregated structure of the model allows for the elements of biodiversity of primary interest to be individually described and measured. Further, while allowing for aggregation to occur across attributes within the same component, the model structure restricts aggregation across biodiversity components or biodiversity types preventing aggregation above the biodiversity of interest. This level of disaggregation is a key improvement on other offset accounting systems.

A further advantage of the model is that it is non-prescriptive and can be used to account for a variety of biodiversity types (ecosystems, habitats, or species), and for different scales and complexities of development and impacts within any planning framework.

As it is impossible to fully account for biodiversity loss across type, space, and time, biodiversity offsetting will remain an imperfect response to compensating for the impact of development. However, we can do things better, and improving support tools can reduce some of the technical limitations experienced in biodiversity offsetting. The principal advantage of our model is that it reduces concealed trades which in turn allows for more explicit estimation of whether no net loss goals can be achieved for biodiversity of interest. And that adds up to greater transparency in the decisions we make.


The Disaggregated Model

The Disaggregated Model discussed here was developed under contract with the New Zealand Department of Conservation (DOC), and the model template and accompanying User Manual can be freely accessed from: http://www.doc.govt.nz/about-us/our-policies-and-plans/guidance-on-biodiversity-offsetting/biodiversity-offsets-accounting-system/.

The Intellectual Property Rights of the Disaggregated Model and User Manual remain in the ownership of DOC.


More info: Fleur Maseyk f.maseyk@uq.edu.au

References

Maseyk FJF, L Barea, RTT Stephens, HP Possingham, G Dutson & M Maron (2016). A disaggregated biodiversity offset accounting model to improve estimation of ecological equivalency and no net loss. Biological Conservation 204: 322- 332. http://www.sciencedirect.com/science/article/pii/S0006320716305961

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