Ecological and economic implications of alternative metrics in biodiversity offset markets

Simpson, Katherine; Vries, Frans P. de; Dallimer, Martin; Armsworth, Paul R.; Hanley, Nick

doi:10.1111/cobi.13906

Cited by 17 publications

(10 citation statements)

References 26 publications

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“…In contrast, we demonstrate that simpler metrics are unlikely to achieve their primary goal and guide effective progress toward conservation targets, and that the economic cost of solutions based on irreplaceability were not dependent on the number of conservation targets we considered. In line with previous research, we demonstrate that the location of offset sites and overall cost of conservation actions is dictated by the overlap among ecological targets, and with ecological and economic heterogeneity across the landscape (26–29). Finally, if conservation targets exceed species starting availability because they anticipate restoration potential then net gain, rather than no net loss, is achieved at the market-scale.…”

Section: Discussionsupporting

confidence: 90%

“…Moreover, a biodiversity offset metric needs to make sense in the context of an overall policy target of no net loss or net gain in a specific aggregate indicator of biodiversity. This combination of an aggregate target with the need to compare gains and losses across space suggests that a metric or currency derived from SCP could have important advantages over the kinds of metrics investigated so far in the literature (26).…”

Section: Irreplaceability: Recast For Biodiversity Offsettingmentioning

confidence: 99%

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Systematic Nature Positive Markets

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Simpson

Hanley

2023

Preprint

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Despite decades of global commitments, and increasingly urgent warning of environmental instability, the demand for land to support economic production is still increasing. Isolated and disorganized actions will not be enough to avert ecosystem failures. As many developers are already required to compensate for their ecological impacts through restoration, many see markets trading biodiversity credits as a financial mechanism to counteract degradation and drive investment in conservation. The challenge stems from a desire to recognize the multidimensional nature of biodiversity that contributes to ecosystem integrity without making suitable offsets intractable to supply. Instead, most regulators have opted to streamline ecological assessment, and undermine ecological rigour, in favour of promoting offset supply and economic efficiency. As a result, all evidence suggests offset trading programs have so far failed to mitigate losses, let alone support "nature positive" outcomes. To overcome this disconnect, and support more effective and equitable biodiversity markets, we propose credits be defined by the irreplaceability of a site, a metric long-established in the domain of systematic conservation planning. Irreplaceability avoids the limitations of like-for-like trading, reduces costs of offsetting to developers and society, ensures farmers willing to sell are fairly rewarded for loss of earnings, and that sites critical to achieving conservation goals are safeguarded. We developed an ecological-economic model of a biodiversity offset market to demonstrate irreplaceability guarantees no net loss of biodiversity and is the most efficient metric for guiding investment toward the recovery of Nature.

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Section: Discussionsupporting

confidence: 90%

Section: Irreplaceability: Recast For Biodiversity Offsettingmentioning

confidence: 99%

Systematic Nature Positive Markets

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Simpson

Hanley

2023

Preprint

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“…To model land‐use change, Simpson et al. (2022), for example, considered that landowners of less profitable land may restore their land parcel to earn conservation credits that they sell to landowners who wish to develop their land. The authors established a demand and a supply function for credits whose intersection represents the equilibrium credits price, and the associated land‐use pattern.…”

Section: Methodsmentioning

confidence: 99%

Section: Basic Land-use Modelmentioning

confidence: 99%

“…As in Simpson et al (2022), land-use change was synchronous so all land parcels changed their land use at once (or did not change at all). In a perfect credits market (Simpson et al, 2022), the changed land-use pattern was cost-effective so that the n 0 least costly land parcels were conserved and the others were in economic use. Thus, rather than establishing supply and demand functions and searching for an equilibrium, I identified the set of the n 0 least costly land parcels to conserve them, whereas the initially conserved but not least costly land parcels were developed for economic use.…”

Section: Basic Land-use Modelmentioning

confidence: 99%

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Flexibility trade‐offs in conservation offsets

Drechsler

2023

Conservation Biology

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Conservation offsets promise more cost‐effective conservation of biodiversity, especially under economic and environmental change. This is because they represent a more flexible approach to biodiversity conservation, allowing for the economic development of ecologically valuable land, provided that this is offset by the restoration of economically used land. Increasing flexibility in permitted trades, however, does not only promise cost savings but very likely leads to unintended loss of biodiversity. Given there is often political pressure towards more flexibility in the design of offsets, it is important to understand the ecological and economic consequences of flexibility. The trade‐off between economic costs and biodiversity is analysed using an ecological‐economic modelling that considers the three main types of flexibility: spatial flexibility, temporal flexibility and flexibility in (ecosystem) type. The influence of ecological and economic conditions on the flexibility trade‐off is explored.This article is protected by copyright. All rights reserved

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Performance of habitat offsets for species conservation in dynamic human‐modified landscapes

et al. 2023

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Biodiversity offsets are a popular policy tool for mitigating the impact of development on biodiversity, but the ecological success of offsets arise from complex interactions among socio‐economic, ecological and policy processes, making outcomes challenging to assess. Many offset policies use habitat surrogates to determine offset requirements, rather than using direct measures of impacted biota, and this can lead to poor outcomes for species. One potential solution to this is for offsets to be delivered by a public agency (agency‐led) rather than by developers (developer‐led). This is because agencies may be able to strategically choose offset sites that maximise outcomes for species (e.g. abundance), while there may be little reason for developers to act strategically in this way when offset requirements are based purely on habitat surrogates. Yet, the success of a strategic agency‐led approach is likely to depend on patterns of development and offset site availability. To examine this, we developed a novel integrated spatially explicit model of land‐use change, habitat, species abundance and offset regulation. We apply the model to the Queensland Government's Environmental Offsets Policy for koalas Phascolarctos cinereus in South East Queensland, Australia, and test how patterns of development and offset site availability influence the performance of agency‐led versus developer‐led offsets. When potential offset sites were plentiful, agency‐led offsets tended to outperform developer‐led offset delivery for maximising koala abundance while achieving similar or better outcomes for habitat area. Yet, when potential offset sites were rare, the relative performance of agency‐led offset was often poor, and offset requirements for habitat area were less likely to be met. Different spatial patterns of development had little effect on the relative performance of agency‐led versus developer‐led offsets. Our analysis shows that agency‐led offsets with strategic choices of offset sites can improve species' outcomes for habitat‐based offsets but can also risk failing to meet habitat area requirements when the availability of offset sites is low. Importantly, our integrated spatial model provides a holistic approach to assessing policy options for biodiversity offsets in dynamic human‐modified landscapes. Read the free Plain Language Summary for this article on the Journal blog.

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Ecological and economic implications of alternative metrics in biodiversity offset markets

Abstract: Policies should offer the highest incentives for conserving and enhancing the most ecologically beneficial sites in a landscape.

Cited by 17 publications

References 26 publications

Systematic Nature Positive Markets

Systematic Nature Positive Markets

Flexibility trade‐offs in conservation offsets

Performance of habitat offsets for species conservation in dynamic human‐modified landscapes

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