Beyond offsetting: Target-based ecological compensation

Target-based ecological compensation is a new and promising policy tool for governments to ensure that biodiversity loss caused by development is adequately compensated, while also offering more certainty to developers than existing biodiversity offset approaches. Professor Martine Maron and Dr Jeremy Simmonds of The University of Queensland explain how target-based ecological compensation overcomes some of the challenges associated with biodiversity offsetting, such as the difficulty of achieving genuine “No Net Loss”.

The challenge for society is to balance development and conservation. Biodiversity offsetting has become a widespread approach by governments around the world to try to achieve this, but as it is currently practised, despite a goal of “No Net Loss” (NNL) biodiversity offsetting can entrench ongoing losses of species and ecosystems.

It comes down to how NNL is calculated. Currently, the amount of gain that needs to be provided for a given loss is generally calculated compared to a “counterfactual scenario” of what would have happened without the project and its offset.

So, while people may assume NNL means “No Net Loss” to the environment, it might be more accurately described as “no additional loss caused by this development”. In an all-too-common context where biodiversity is declining due to multiple threats, NNL allows a development to simply match that decline.

Figure 1. Under target-based ecological compensation, NNL takes on a more intuitive meaning.

Doing away with counterfactuals

Counterfactual-based biodiversity offset calculations are complex. They are subject to uncertainty and susceptible to manipulation, and they tend to be done in a piecemeal project-by-project manner. But under a new and alternative approach, they are not needed at all, and NNL takes on its more intuitive meaning.

As its name suggests, target-based ecological compensation links compensation to biodiversity targets, which are set at a jurisdictional level, whether national or regional. This means that the requirements for developers and the outcomes for stakeholders are clear and consistent. The associated conservation outcomes are more transparent and less susceptible to manipulation, and the relative contribution of different sectors to achieving those targets is more explicit.

The type and amount of compensation required for a particular loss is determined using a simple framework. Compensation requirements are set to achieve the goal for a particular species or ecosystem. See Figure 2 below.

Click here for an interactive target-based ecological compensation calculation spreadsheet.

Figure 2. Compensation for losses of biodiversity caused by development projects can be designed to contribute to jurisdictional biodiversity targets. The target-based ecological compensation approach provides a clear framework for determining how much and what type (‘Improvement’ or ‘Maintenance’) compensation is required for a loss to a given biodiversity, such that the overall outcome is consistent with the achievement of that feature’s target.

Implementing the target-based approach

Just four enabling factors are required to implement target-based ecological compensation. With this information, the type and amount of compensation required for losses caused by development can be determined.

1. Outcomes-based biodiversity targets for species populations or ecosystems (or other specific biodiversity features) in a jurisdiction, whether national or regional. For example, a target for the number of breeding individuals of a threatened species might be a minimum of 10,000; a target for the area of a vegetation community in a region might be at least half its original extent, in good condition.
2. Estimates about the current state of the biodiversity feature in the jurisdiction (e.g., its population size or area).
3. The amount of the species or ecosystem that is or will be effectively secured (e.g., in protected areas).
4. Regulatory control of at least some sectors that cause biodiversity loss through their activities.

To achieve a trajectory of NNL or Net Gain, improvement is the minimum standard of compensation.

Image: Raw film, unsplash

A better approach

In this new framework, compensation is integrated with targets, because every unit of loss is compensated for in a way that contributes to achieving specified targets. Outcomes at the project level mirror the desired outcome at the jurisdictional level.

In doing so, the framework advances ecological compensation beyond a reactive, ad-hoc response. Rather, target-based ecological compensation ensures alignment between actions that address unavoidable biodiversity losses and the achievement of targets for conservation.

Meanwhile, standard conditions that apply to biodiversity offsetting remain valid. These include limits to what can be compensated for; equity; and adherence to the mitigation hierarchy, which is the process by which environmental impacts from development are avoided, unavoidable impacts minimised and residual impacts
then offset as an option of last resort.

The framework builds on best-practice safeguards and principles, in a workable approach for conservation.

For more information, watch this short video or search “target-based ecological compensation” on YouTube.

Further information
Martine Maron
m.maron@uq.edu.au

Jeremy Simmonds
j.simmonds1@uq.edu.au

Top image: Mountain Ash woodland, Victoria: Image: Neroli Wesley, unsplash