Interactions Between Biodiversity Offsets and Protected Area Commitments: Avoiding Perverse Outcomes

Abstract

Economic growth is often in conflict with environmental goals. Biodiversity offsetting attempts to resolve this conflict by requiring industries to compensate for the biodiversity loss they cause, by generating an equivalent biodiversity gain elsewhere. Offsets for environmental impacts are increasingly being seen as a way to help meet preexisting conservation targets, such as those relating to the establishment and management of protected areas. We examine how using offsets to meet a state or organization's genuine commitments, which are not contingent on the offsets, results in no additional conservation benefit. In this case, either the offset or the preexisting commitment is invalid. For example, the use of offsets to meet commitments under the Convention on Biological Diversity requires an admission that those commitments would otherwise not be met. This interaction between international agreements around protected areas and offset policy can generate perverse incentives, which must be carefully managed to avoid poor conservation outcomes. We propose separate accounting for conservation gains generated using offsets, and that future conservation agreements and targets should explicitly separate commitments met using offset gains from those which are not reliant on equivalent losses.

Cost shifting and other perverse incentives in biodiversity offsetting in India

“…In the context of biodiversity offsetting, cost shifting is used to refer to the practice of governments using offset funds provided by developers to fulfill preexisting conservation commitments, thus shifting the costs of their own conservation programs to the offsetting program (Pilgrim & Bennun ; Maron et al. ). Because the offset benefits and the precommitted conservation benefits do not both materialize, this type of cost shifting leads to double counting and a diminished overall conservation outcome.…”

“…In such cases, the offset becomes invalid because the impacts of development remain uncompensated, resulting in a net loss of biodiversity (Pilgrim & Bennun ; Maron et al. ). Cost shifting also results in perverse outcomes (i.e., loss of biodiversity) when, in anticipation of offset funds, core budgetary outlay is not made for preexisting commitments, resulting in fewer funds being available for conservation overall (Maron et al.…”

“…Cost shifting also results in perverse outcomes (i.e., loss of biodiversity) when, in anticipation of offset funds, core budgetary outlay is not made for preexisting commitments, resulting in fewer funds being available for conservation overall (Maron et al. ).…”

“…In such cases, offset funds can be used validly to meet other conservation commitments only if the countries openly acknowledge that such commitments could not have been fulfilled in absence of offset funds (Pilgrim & Bennun ; Maron et al. ).…”

“…; Maron et al. ) by triggering behaviors that result in the opposite of the intended outcome. As such, they exacerbate biodiversity loss rather than alleviating it (Gordon et al.…”