Credible biodiversity offsetting needs public national registers to confirm no net loss

Abstract

In the face of the ongoing biodiversity crisis, questions are arising regarding the success, or lack thereof, of biodiversity offset schemes, where biodiversity losses from human development are compensated by producing equitable gains elsewhere. The overarching goal of offsetting is to deliver no net loss (NNL) of biodiversity. Assessing whether offsetting does indeed deliver NNL is, however, challenging because of a lack of clear and reliable information about offset schemes. Here we consider barriers in tracking NNL outcomes, outline criteria of public offset registers to enable accessible and credible reporting of NNL, and show how existing registers fail to satisfy those criteria. The lack of accessibility and transparency in existing registers represents a fundamental gap between NNL targets and a valid tracking system, which challenges the impetus to enact the transformative changes needed to reverse biodiversity decline. In the face of the ongoing biodiversity crisis, questions are arising regarding the success, or lack thereof, of biodiversity offset schemes, where biodiversity losses from human development are compensated by producing equitable gains elsewhere. The overarching goal of offsetting is to deliver no net loss (NNL) of biodiversity. Assessing whether offsetting does indeed deliver NNL is, however, challenging because of a lack of clear and reliable information about offset schemes. Here we consider barriers in tracking NNL outcomes, outline criteria of public offset registers to enable accessible and credible reporting of NNL, and show how existing registers fail to satisfy those criteria. The lack of accessibility and transparency in existing registers represents a fundamental gap between NNL targets and a valid tracking system, which challenges the impetus to enact the transformative changes needed to reverse biodiversity decline. IntroductionWith nearly three-quarters of Earth’s surface altered by human activities,1IPBESGlobal Assessment Report on Biodiversity and Ecosystem Services of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (Version 1). Zenodo, 2019Google Scholar the degradation of ecosystems and natural habitats is continuing at an alarming pace, threatening human well-being.2Dasgupta P. The Economics of Biodiversity: The Dasgupta Review Updated: 18 February 2021. HM Treasury, 2021Google Scholar Despite decades of effort, we have systematically failed to achieve all targets aimed at halting biodiversity loss.3Secretariat of the Convention on Biological DiversityGlobal Biodiversity Outlook 5. Secretariat of the Convention on Biological Diversity, 2020Google Scholar Because of economic development and our increasing human footprint, without successful and effective mechanisms to counterbalance these losses, biodiversity will continue to be lost.Biodiversity offset schemes, where biodiversity losses from development are compensated by producing equitable gains elsewhere, have been promoted as one mechanism for reversing global biodiversity decline. Offsetting is the final step in the mitigation hierarchy, where negative biodiversity impacts are first avoided and minimized where possible and then mitigated with reparative actions at the impacted area; finally, any residual impacts are offset in another location.4BBOPStandard on Biodiversity Offsets. Business and Biodiversity Offsets Programme (BBOP), 2012Google Scholar,5International Union for Conservation of NatureIUCN Policy on Biodiversity Offsets. International Union for Conservation of Nature, 2016Google Scholar The overarching goal of offsetting is, by definition, to deliver no net loss (NNL) or a net gain of biodiversity.4BBOPStandard on Biodiversity Offsets. Business and Biodiversity Offsets Programme (BBOP), 2012Google Scholar, 5International Union for Conservation of NatureIUCN Policy on Biodiversity Offsets. International Union for Conservation of Nature, 2016Google Scholar, 6World Bank GroupBiodiversity Offsets: A User Guide. World Bank, 2016Crossref Google Scholar Although individual offset policies and programs may use associated terms such as “net positive impact,” “biodiversity neutral,” or “maintain or improve,” they all align with the core meaning of (at least) NNL; that is, offsets should achieve biodiversity gains equal to or greater than what was lost. In addition, biodiversity offset schemes are increasingly designed to act as incentives for developers to reduce their environmental impact by forcing larger offset requirements and, hence, costs to projects with large footprints or impacting vulnerable biodiversity. Currently, over 100 countries have biodiversity compensation policies in place or enabled,7GIBOPGlobal Inventory of Biodiversity Offset Policies (GIBOP). International Union for Conservation of Nature, The Biodiversity Consultancy, Durrel Institute of Conservation & Ecology, 2019https://portals.iucn.org/offsetpolicy/Google Scholar often operating within the environmental impact assessment (EIA) framework8Madsen B. Carroll N. Moore Brands K. State of Biodiversity Markets Report: Offsets and Compensation Programs Worldwide. Forest Trends - Ecosystem Marketplace, 2010Google Scholar,9Deutz A. Heal G.M. Niu R. Swanson E. Townshend T. Li Z. Delmar A. Meghji A. Sethi S.A. Tobin-de la Puente J. 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Safeguards for enhancing ecological compensation in Sweden.Land Use Pol. 2017; 64: 186-199https://doi.org/10.1016/j.landusepol.2017.02.035Crossref Scopus (23) Google Scholar So far, offset projects have been estimated to occur across ∼150,000 km2 of the Earth’s surface,13Bull J.W. Strange N. The global extent of biodiversity offset implementation under no net loss policies.Nat. Sustain. 2018; 1: 790-798https://doi.org/10.1038/s41893-018-0176-zCrossref Scopus (71) Google Scholar and the annual value of offset transactions has grown to ∼US$ 6.3–9.2 billion.9Deutz A. Heal G.M. Niu R. Swanson E. Townshend T. Li Z. Delmar A. Meghji A. Sethi S.A. Tobin-de la Puente J. Financing Nature: Closing the Global Biodiversity Financing gap. The Paulson Institute, The Nature Conservancy, and the Cornell Atkinson Center for Sustainability, 2020Google Scholar Although straightforward conceptually, such trading of biodiversity has, in practice, been proven to be ethically and technically challenging and controversial.14Maron M. Ives C.D. Kujala H. Bull J.W. Maseyk F.J.F. Bekessy S. Gordon A. Watson J.E.M. Lentini P.E. Gibbons P. et al.Taming a wicked problem: resolving controversies in biodiversity offsetting.Bioscience. 2016; 66: 489-498https://doi.org/10.1093/biosci/biw038Crossref Scopus (124) Google Scholar, 15Robertson M.M. The neoliberalization of ecosystem services: wetland mitigation banking and problems in environmental governance.Geoforum. 2004; 35: 361-373https://doi.org/10.1016/j.geoforum.2003.06.002Crossref Scopus (386) Google Scholar, 16Ives C.D. Bekessy S.A. The ethics of offsetting nature.Front. Ecol. Environ. 2015; 13: 568-573https://doi.org/10.1890/150021Crossref Scopus (63) Google Scholar, 17Spash C.L. Bulldozing biodiversity: the economics of offsets and trading-in Nature.Biol. Conserv. 2015; 192: 541-551https://doi.org/10.1016/j.biocon.2015.07.037Crossref Scopus (104) Google ScholarUnlike other mechanisms based on avoidance, minimization, and caps, the NNL target in offsetting calls for a specific loss-gain accounting for tracking performance and therefore sets, at least in theory, an explicit, measurable, and verifiable criterion to assess whether the offset actions have been adequate to counterbalance caused biodiversity losses. However, one of the major challenges around biodiversity offsets is the lack of data to confirm whether NNL is being achieved.18Pawliczek J. Sullivan S. Conservation and concealment in SpeciesBanking.com, USA: an analysis of neoliberal performance in the species offsetting industry.Environ. Conserv. 2011; 38: 435-444https://doi.org/10.1017/s0376892911000518Crossref Google Scholar,19May J. Hobbs R.J. Valentine L.E. Are offsets effective? An evaluation of recent environmental offsets in Western Australia.Biol. Conserv. 2017; 206: 249-257https://doi.org/10.1016/j.biocon.2016.11.038Crossref Scopus (56) Google Scholar Some have even called biodiversity offsetting the least transparent mechanism in the payments for ecosystem services (PES) sector.20Salzman J. Bennett G. Carroll N. Goldstein A. Jenkins M. The global status and trends of Payments for Ecosystem Services.Nat. Sustain. 2018; 1: 136-144https://doi.org/10.1038/s41893-018-0033-0Crossref Scopus (257) Google Scholar This is troublesome because there is currently an increasing global focus on net gain and net positive outcomes for biodiversity, not only through commitments such as the Convention on Biological Diversity (CBD) Post-2020 Global Biodiversity Framework21Convention on Biological DiversityFirst Draft of the Post-2020 Global Biodiversity Framework.2021: 12Google Scholar and the European Union (EU) 2030 Biodiversity Strategy22European ComissionEU Biodiversity Strategy for 2030 - Bringing Nature Back into Our Lives. Communication from the Comission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, 2020Google Scholar but also via calls for a “nature-positive” impact in industry and finance.2Dasgupta P. The Economics of Biodiversity: The Dasgupta Review Updated: 18 February 2021. HM Treasury, 2021Google Scholar,9Deutz A. Heal G.M. Niu R. Swanson E. Townshend T. Li Z. Delmar A. Meghji A. Sethi S.A. Tobin-de la Puente J. Financing Nature: Closing the Global Biodiversity Financing gap. The Paulson Institute, The Nature Conservancy, and the Cornell Atkinson Center for Sustainability, 2020Google Scholar These claims require the ability to quantitatively validate how different mechanisms translate into biodiversity outcomes.23Maron M. Brownlie S. Bull J.W. Evans M.C. von Hase A. Quétier F. Watson J.E.M. Gordon A. The many meanings of no net loss in environmental policy.Nat. Sustain. 2018; 1: 19-27https://doi.org/10.1038/s41893-017-0007-7Crossref Scopus (98) Google Scholar Not being able to demonstrate, or even evaluate, whether NNL is being achieved in offsetting represents a significant information gap between policy goals and outcomes, leaving governments and societies without knowledge about the impacts of biodiversity offsetting schemes and unable to improve them.Public national biodiversity offset registers or registries, when properly designed, would help improve knowledge on offset outcomes and facilitate improvement. Information about biodiversity losses and gains, including ex ante assessment and approval of offset proposals and ex-post data on offset implementation and outcomes, should be collected in a standardized manner into a centralized register if it is to be useful for program-level reporting. A national register also aligns offset outcomes and impacts with broader national and international conservation goals (e.g., CBD, United Nations [UN] Sustainable Development Goals), which typically operate at the country level and allow governments to compare the outcomes of biodiversity offsetting with other conservation mechanisms. Recent reviews suggest that few countries with an offset policy also have some form of governmental offset databases, either national or subnational.13Bull J.W. Strange N. The global extent of biodiversity offset implementation under no net loss policies.Nat. Sustain. 2018; 1: 790-798https://doi.org/10.1038/s41893-018-0176-zCrossref Scopus (71) Google Scholar,24zu Ermgassen S.O.S.E. Baker J. Griffiths R.A. Strange N. Struebig M.J. Bull J.W. The ecological outcomes of biodiversity offsets under “no net loss” policies: a global review.Conserv. Lett. 2019; 12: e12664https://doi.org/10.1111/conl.12664Crossref Scopus (65) Google Scholar,25Bull J.W. Brauneder K. Darbi M. Van Teeffelen A.J.A. Quétier F. Brooks S.E. Dunnett S. Strange N. Data transparency regarding the implementation of European ‘no net loss’ biodiversity policies.Biol. Conserv. 2018; 218: 64-72https://doi.org/10.1016/j.biocon.2017.12.002Crossref Scopus (23) Google Scholar However, it remains unclear to what degree these registers/databases contain information that allows tracking of proposed and established developments and their associated offsets across offset schemes, or, crucially, monitoring and evaluation of compliance, outcomes, and impact relative to the ultimate goal of NNL. For example, information about offset trades has been shown to be highly fragmented, limited, and hard to access,20Salzman J. Bennett G. Carroll N. Goldstein A. Jenkins M. The global status and trends of Payments for Ecosystem Services.Nat. Sustain. 2018; 1: 136-144https://doi.org/10.1038/s41893-018-0033-0Crossref Scopus (257) Google Scholar,25Bull J.W. Brauneder K. Darbi M. Van Teeffelen A.J.A. Quétier F. Brooks S.E. Dunnett S. Strange N. Data transparency regarding the implementation of European ‘no net loss’ biodiversity policies.Biol. Conserv. 2018; 218: 64-72https://doi.org/10.1016/j.biocon.2017.12.002Crossref Scopus (23) Google Scholar and previous assessments of offset outcomes based on current registers have had to use implementation19May J. Hobbs R.J. Valentine L.E. Are offsets effective? An evaluation of recent environmental offsets in Western Australia.Biol. Conserv. 2017; 206: 249-257https://doi.org/10.1016/j.biocon.2016.11.038Crossref Scopus (56) Google Scholar or self-reported achievement of NNL24zu Ermgassen S.O.S.E. Baker J. Griffiths R.A. Strange N. Struebig M.J. Bull J.W. The ecological outcomes of biodiversity offsets under “no net loss” policies: a global review.Conserv. Lett. 2019; 12: e12664https://doi.org/10.1111/conl.12664Crossref Scopus (65) Google Scholar as a proxy for their ecological effectiveness.Here we focus on the information currently available in public offset registers and whether this allows evaluating that NNL was achieved. We also discuss how and why public information about offsets should be improved. We develop minimum requirements for biodiversity offset registers to ensure that they can be used to determine (1) where, how much, and what types of offset actions are being undertaken; (2) whether they are meeting the conditions of the offset requirements (compliance) and generating the promised biodiversity gains; (3) whether those gains are counterbalancing biodiversity losses; and (4) what the net impacts for affected biodiversity are so that policy and its implementation can be continually improved. Our comparison of global offset policies and current public offset registers with these criteria indicates that countries and jurisdictions do not currently collect or make accessible the information necessary to confirm that offsets counterbalance the biodiversity losses they are intended to compensate. This reveals a stark contradiction between the intergovernmental targets of setting nature back on a net positive trajectory and the efforts put in place to achieve them.The challenges of tracking offset effectivenessIn theory, biodiversity gains produced by offsets should be evaluated in at least two stages. Before approval, an ex ante evaluation of the offset proposal should determine whether the offset is likely to achieve NNL when implemented as designed. After implementation, an ex-post evaluation is needed to confirm whether the required biodiversity gains have been produced and NNL has been achieved. Even at the first hurdle, offsets may fail for many reasons; studies of the ecological effectiveness of offsets have highlighted several issues around offset design,26Quétier F. Lavorel S. Assessing ecological equivalence in biodiversity offset schemes: key issues and solutions.Biol. Conserv. 2011; 144: 2991-2999https://doi.org/10.1016/j.biocon.2011.09.002Crossref Scopus (220) Google Scholar,27Kujala H. Whitehead A.L. Morris W.K. Wintle B.A. Towards strategic offsetting of biodiversity loss using spatial prioritization concepts and tools: a case study on mining impacts in Australia.Biol. Conserv. 2015; 192: 513-521https://doi.org/10.1016/j.biocon.2015.08.017Crossref Scopus (45) Google Scholar estimation of expected offset gains,28Maron M. Hobbs R.J. Moilanen A. Matthews J.W. Christie K. Gardner T.A. Keith D.A. Lindenmayer D.B. McAlpine C.A. Faustian bargains? Restoration realities in the context of biodiversity offset policies.Biol. 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Conserv. 2017; 210: 286-292https://doi.org/10.1016/j.biocon.2017.04.022Crossref Scopus (65) Google Scholar Consequently, rapid adoption of biodiversity offset policies has been met with equally rapid emergence of skepticism toward offsetting as an effective conservation mechanism.18Pawliczek J. Sullivan S. Conservation and concealment in SpeciesBanking.com, USA: an analysis of neoliberal performance in the species offsetting industry.Environ. Conserv. 2011; 38: 435-444https://doi.org/10.1017/s0376892911000518Crossref Google Scholar,28Maron M. Hobbs R.J. Moilanen A. Matthews J.W. Christie K. Gardner T.A. Keith D.A. Lindenmayer D.B. McAlpine C.A. Faustian bargains? Restoration realities in the context of biodiversity offset policies.Biol. Conserv. 2012; 155: 141-148https://doi.org/10.1016/j.biocon.2012.06.003Crossref Scopus (364) Google Scholar,34Sullivan S. Hannis M. Nets and frames, losses and gains: value struggles in engagements with biodiversity offsetting policy in England.Ecosyst. Serv. 2015; 15: 162-173https://doi.org/10.1016/j.ecoser.2015.01.009Crossref Scopus (60) Google ScholarAnother key challenge in tracking the ecological impact of offsetting is the complexity of the offset policy landscape. Biodiversity offset programs constitute a diverse group of regulatory and market-like mechanisms35Koh N.S. Hahn T. Boonstra W.J. How much of a market is involved in a biodiversity offset? A typology of biodiversity offset policies.J. Environ. Manag. 2019; 232: 679-691https://doi.org/10.1016/j.jenvman.2018.11.080Crossref PubMed Scopus (18) Google Scholar that operate under several different policies, even within a nation.23Maron M. Brownlie S. Bull J.W. Evans M.C. von Hase A. Quétier F. Watson J.E.M. Gordon A. The many meanings of no net loss in environmental policy.Nat. Sustain. 2018; 1: 19-27https://doi.org/10.1038/s41893-017-0007-7Crossref Scopus (98) Google Scholar They focus on multiple components of biodiversity (e.g., species, environmental attributes, habitat types), use different approaches to calculate offset requirements,36Bull J.W. Milner-Gulland E.J. Suttle K.B. Singh N.J. Comparing biodiversity offset calculation methods with a case study in Uzbekistan.Biol. Conserv. 2014; 178: 2-10https://doi.org/10.1016/j.biocon.2014.07.006Crossref Scopus (47) Google Scholar,37Maseyk F. Barea L. Stephens R. Possingham H. Dutson G. Maron M. A disaggregated biodiversity offset accounting model to improve estimation of ecological equivalency and no net loss.Biol. Conserv. 2016; 204: 322-332https://doi.org/10.1016/j.biocon.2016.10.016Crossref Scopus (26) Google Scholar and are operated by numerous actors.38Bennett G. Gallant M. ten Kate K. State of Biodiversity Migitation 2017 - Markets and Compensation for Global Infrastructure Development. Forest Trends, 2017Google Scholar Offsets can be produced by developers and their subcontractors (permittee responsible), or they can be purchased from third-party providers (in-lieu fee banks, private providers, and non-governmental organization [NGOs]).35Koh N.S. Hahn T. Boonstra W.J. How much of a market is involved in a biodiversity offset? A typology of biodiversity offset policies.J. Environ. Manag. 2019; 232: 679-691https://doi.org/10.1016/j.jenvman.2018.11.080Crossref PubMed Scopus (18) Google Scholar,39Environmental Law InstituteBanks and Fees: The Status of Offsite Wetland Mitigation in the United States. Environmental Law Institute, 2002Google Scholar Unlike in other PES sectors (e.g., carbon, clean water), common metrics of trade are difficult to determine.20Salzman J. Bennett G. Carroll N. Goldstein A. Jenkins M. The global status and trends of Payments for Ecosystem Services.Nat. Sustain. 2018; 1: 136-144https://doi.org/10.1038/s41893-018-0033-0Crossref Scopus (257) Google Scholar Consequently, although biodiversity offset policies are being adopted across the world,7GIBOPGlobal Inventory of Biodiversity Offset Policies (GIBOP). International Union for Conservation of Nature, The Biodiversity Consultancy, Durrel Institute of Conservation & Ecology, 2019https://portals.iucn.org/offsetpolicy/Google Scholar tracking their effectiveness remains a key challenge.Minimum requirements for a credible registerInformation to evaluate offset proposalsA fundamental component of an offset register is a unique identifier that links each offset to the development impact being compensated and allows additional data, reports, permits, and enabling instruments to be appended (Figure 1). Each record needs to be linked to spatial data that delineate the area of the development and offset sites and the dates when they were established. Without the linking identifier and the spatial and temporal information, compliance, time lags, or risk of double counting (using the same offset to compensate multiple losses) cannot be monitored. In addition, each record should include information that allows the parity between losses and gains to be assessed (Box 1). Because offsets are commonly implemented based on an expectation of biodiversity gains accruing in the future, it is important that the estimates of these biodiversity gains are explicitly recorded before the offset is implemented, together with information on how these estimates were generated. At a minimum, information on approved offsets should include (1) a list of the impacted biodiversity features and their status or condition before the development; (2) an estimate of loss for those features; (3) the size, type, and duration of the offset actions; (4) an estimate of gains produced by the offset; (5) assumptions regarding the counterfactual scenarios for the development and offset site(s) when estimating losses and gains in the biodiversity features; (6) the performance measure(s) used to evaluate offset effectiveness; and (7) the parties responsible for delivering the offset.Box 1Offset register checklistEssential for evaluating proposed offset actions•A unique ID linking the development and associated offset sites and any relevant documents/data•Spatial data on locations and area of developments and offsets•Impacted/targeted biodiversity features•Estimated development impacts (losses) on each biodiversity feature and how they were measured, including source of information•Approach used for offset calculation or financial compensation amount•Actions proposed, their size and duration, performance measures, and source of information to justify these•Time horizon during which gains should be achieved•Reporting required to be delivered by the proponent with links to reportsEssential for evaluating offset outcomes and effectiveness•Amount and types of gains required/expected from actions and source of information to justify these•Confirmation that offsets were implemented as planned and description of potential adjustments•Monitoring data for target biodiversity at the offset site(s) to verify gains•Monitoring data for control site(s) to test counterfactual assumptions•Monitoring data at impact site(s) and updated impact estimate/offset liabilityBeneficial for adaptive policy improvement•Record of the policy initiating the offset•Agreed costs for individual activities (if any) and/or reported cost spent on offsets•Confirmation of compliance: were all conditions set to the offset met?•Final outcome for target biodiversity: did the offset gains balance the development losses?•Losses and gains for the target biodiversity expressed using metrics that allow evaluating impacts at the offset program level•Regular data synthesis and analysisData to confirm offset outcome and effectivenessOffset registers need to include information on whether an offset was implemented as planned and, over time, whether the expected biodiversity gains were produced. This information alone, however, is not sufficient to assess offset effectiveness. To verify NNL of biodiversity, monitoring data are needed to quantify biodiversity gains attributable to the offset actions (see next section on monitoring) and, likewise, the biodiversity losses attributable to the development. Therefore, information on proposed offsets should outline plans for long-term management and monitoring to verify offset outcomes.40Hough P. Harrington R. Ten years of the compensatory mitigation rule: reflections on progress and opportunities.Environ. Law Rep. 2019; 49: 10018-10037Google Scholar The results of appropriate ongoing monitoring should then be appended to each offset record to allow rigorous ex post evaluations of offset actions and offset outcomes over time (Box 1).Evidence to improve policyIf a register is to support evidence-based policy improvements, then additional information is required that supports program and policy evaluation, adaptive management, and systematic reviews.41Keene M. Pullin A.S. Realizing an effectiveness revolution in environmental management.J. Environ. Manag. 2011; 92: 2130-2135https://doi.org/10.1016/j.jenvman.2011.03.035Crossref PubMed Scopus (62) Google Scholar This includes records on offset compliance, condition variations, and potential amendments when offset obligations are not met and, most importantly, the final outcome for target biodiversity at the offset site after the offset has been implemented. It also includes reporting the agreed and/or realized cost of offsets. This is important for several reasons: to give an accounting of offset expenditure and to understand the drivers in costs,20Salzman J. Bennett G. Carroll N. Goldstein A. Jenkins M. The global status and trends of Payments for Ecosystem Services.Nat. Sustain. 2018; 1: 136-144https://doi.org/10.1038/s41893-018-0033-0Crossref Scopus (257) Google Scholar,39Environmental Law InstituteBanks and Fees: The Status of Offsite Wetland Mitigation in the United States. Environmental Law Institute, 2002Google Scholar,42Iftekhar M.S. Pannell D. Hawkins J. Costs of conservation offset activities: the state of publicly available information in Australia.Sustainability. 2019; 11: 5273https://doi.org/10.3390/su11