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Advancing More, Better and Faster Financing for Biodiversity and Ecosystem Services

Biodiversity offset mechanisms

Basis for action:

"To consider biodiversity offset mechanisms where relevant and appropriate while ensuring that they are not used to undermine unique components of biodiversity"... Strategy for resource mobilization, objective 4.2

Indicator:
Number of initiatives, and respective amounts, supplementary to the financial mechanism established under Article 21, that engage Parties and relevant organizations in new and innovative financial mechanisms, which consider intrinsic values and all other values of biodiversity, in accordance with the objectives of the Convention and the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of the Benefits Arising out of Their Utilization

Africa
Burundi Mécanisme de compensation de la biodiversité : c’est un autre mécanisme de financement de la compensation de la biodiversité sur une base volontaire ou obligatoire permettant de faire face aux effets résiduels inévitables des projets de développement de la biodiversité qui a fait ses preuves dans de nombreux pays. Concrètement ce mécanisme serait constitué d’une sorte de taxe de dissuasion imposée aux activités de développement ayant des impacts négatifs sur la biodiversité des aires protégées. On peut distinguer des taxes prélevées sur l’exploitation des tourbes, moellons, des sables, des carrières, d’argile, etc., le transport routier sur les axes traversant les aires protégées, le transport lacustre (taxes par bateaux et ports), le transport aérien (taxes par avion et aéroports), taxes sur la construction des routes, la fabrication d’huile de palme et des savons en bordure des rivières et lacs (industries et unités artisanales), taxe sur les industries polluantes et les entreprises utilisant de grande quantité d’eau d’irrigation.

Cameroon Decree 2013/0065/PM of 13 January 2013 requires the study of environmental and social impacts and mitigating, avoiding, eliminating or compensating for adverse effects on the environment

Egypt Law for the Environment

Ghana Akyem gold mine offset project

Guinea Rio Tinto Simandou offset project

Liberia The Agenda for Transformation, government giving tax break as incentive for concessionaires undertaking biodiversity off programmes, 15 companies and concessions are complying

Madagascar L’objectif environnemental primordial d’Ambatovy est de veiller à ce que l’ensemble de ses activités ne dégradent pas le capital naturel de Madagascar. Afin de réaliser les résultats escomptés en matière de conservation de l’environnement, les interventions du projet ont été focalisées sur : - La mise en oeuvre des plans de gestion environnementale adaptatifs et fondés sur les connaissances scientifiques, sociales, environnementales les plus récentes pour assurer la conformité avec les normes nationales et internationales pendant la phase de construction, d’exploitation et de fermeture du projet ; - La réduction au minimum de tous les impacts résiduels à travers la mise en oeuvre d’une bonne pratique et des programmes de compensation ; - La gestion des risques environnementaux en améliorant la participation de toutes les parties prenantes grâce à la transparence, la consultation continue et l’envoi de feedbacks, en temps opportun au public, concernant les enjeux environnementaux émergents ; - Le suivi de la performance opérationnelle et des émissions afin de s’assurer que les niveaux de conformité soient respectés et que les systèmes de contrôle opérationnel fonctionnent de façon optimale. Ambatovy travaille en étroite collaboration avec l’ONE, notamment en matière de suivi environnemental du projet. Depuis 2006, les programmes de compensation développés par le projet Ambatovy lui confèrent la qualité de projet pilote en matière de BBOP. Le coût annuel moyen du programme BBOP du projet Ambatovy est estimé entre 250 000 et 300 000 US$.
Ambatovy and Rio Tinto mining offsets, Voluntary projects

Mozambique Pilot offsets with Dutch companies

Namibia Strategic environmental management plan

South Africa national biodiversity offsets policy framework
1. Provincial guidelines on biodiversity offsets in Western Cape, Status 2011
2. environmental liability
3. Wetland Mitigation Banking: Assessing the Appropriateness of Wetland Mitigation Banking as a Mechanism for Securing Aquatic Biodiversity in the Grassland Biome of South Africa (2007)

Uganda Kalagala –Itanda Offset Falls (part of IDA/World Bank Bujagali Hydropower Project), including the Mabira central forest reserve and the Nile Bank central forest reserve)
Kalagala Sustainable Development Plan
Compensatory conservation, Biodiversity offset policy

Americas
Argentina Environmental compensation fund

Brazil 1. Environmental Compensation
2. Forest code offsets, industrial impact compensationStatus 2011
3. Counting Environmental Compensation

Canada 1. Conversion to Native Grasslands Offset Project Protocol Framework
2. Fish habitat banks, wetland compensation, Status 2011
3. Wetland restoration for carbon sequestration in Prairie Canada (2010)

Chile Voluntary offset in mining

Colombia Estrategia de compensaciones por pérdida de biodiversidad; Estrategia Nacional de Compensaciones por Pérdida de Biodiversidad y su Listado Nacional de Factores de Compensación para Ecosistemas Naturales Terrestres
1. Environmental compensation
2. Compensation for the deterioration of Biodiversity Projects Subject to Environmental Licensing

Mexico 1. Compensation fund
2. General Law of Ecological Balance and Environmental Protection
3. Carbon offsets for sustainable land use, Scolel Te Plan Vivo Program, Mexico (2010)

Paraguay Environmental services certificates

United States 1. Wetland and stream mitigation, conservation banking (species), Status 2011
2. Comprehensive liability for natural resource damage, the Rocky Mountain Arsenal
3. Guidance for the Establishment, Use, and Operation of Conservation Banks (2003)
4. Kimball Island Mitigation Bank, Sacramento-San Joaquin Delta, California
5. Middle South Platte River Wetland Mitigation Bank, Erie, Colorado
6. Big Cypress Mitigation Banking, Hendry County, Florida
7. Panther Island Mitigation Bank, Collier County, Florida
8. Florida Wetlandsbank Pembroke Pines, Southwest Broward County, Florida
9. Mitigation Banking: A White Paper Submitted to the Governor’s Advisory Council for Georgia’s Land Conservation Partnership
10. Ferson Creek Wetland Mitigation Bank, Kane County, Illinois
11. Lake Station Wetland Mitigation Bank, Northwest Indiana
12. Rancho Jamul Mitigation Bank, San Diego County, California
13. Everglades Mitigation Bank, Miami-Dade County
14. Process for Developing Mitigation Banks in Michigan
15. Prospectus: Mitigation Banking Instrument for Virginia Department of Transportation’s Great Oaks Wetland and Stream Mitigation Bank (2002)
16. Navigating Wetland Mitigation Markets: A Study of Risks Facing Entrepreneurs and Regulators (2013)
17. Bear Creek - Mill Branch Mitigation Bank, Lenoir County, North Carolina
18. Marsh Resources Pott Creek Wetland Mitigation Bank, Lincoln County, NC
19. North River – Ward Creek Mitigation Bank, Carteret County, NC
20. Marsh Resources Inc. Meadowlands Mitigation Bank, Bergen County, NJ
21. Suggestions for Proposing Mitigation Banks
22. Watershed-Based Permitting Case Study: General Permit for Nitrogen Discharges
23. Watershed-Based Permitting Case Study: Final Permit, Rahr Malting Company
24. Wildlands Mitigation Bank at Sheridan, Placer County, California
25. Mitigation Banking as an Endangered Species Conservation Tool (1999)
26. The Kennecott Inland Sea Shorebird Reserve (2010)
27. Julie J. Metz Wetlands Bank, Woodbridge, Virginia (Prince William County)
28. Guidelines for Developing Freshwater Wetlands Mitigation Plans and Proposals (1994)
29. Endangered Species Conservation Banking
30. Markets for the Environment (2005)

Venezuela Brisas Gold and Copper Project
Regional Habitat Banking in Latin America and Caribbean: A Feasibility Assessment (2010)

Asia
China Guarantee funds for ecological restoration and environmental improvement of mining sector (In 2006, the Ministry of Finance, together with the Ministry of Land Resources and the State Environmental Protection Administration developed guidance for establishing a responsibility system for ecological restoration and environmental improvement of the mining sector. The guidance requires the mining sector to provide guarantee funds out of their mining product sales incomes for ecological restoration and environmental improvement) (30 provinces established such funds for ecological and environmental restoration in the mining areas)(By the end of 2012, 80% of the mines have paid their guarantee funds, totaling 61.2 billion yuan RMB and accounting for 62% of the total funds that should be paid).
1. Forest vegetation restoration fee, Saipan's upland mitigation bank
2. Policy of “the exploiters protect, the destroyers recover and the users compensate”

Indonesia Ecosystem restoration license

Japan 1. 2001 municipal compensatory mitigation ordinance, Satoyama banking
2. Offsetting industrial groundwater consumption through partnerships between industry and farmers

Kyrgyzstan Mitigation for open pit gold mine

Laos Compensation from hydropower facility

Malaysia 1. Voluntary Malua Biobank, gm version
2. Malua Wildlife Habitat Conservation Bank: An opportunity to help address one of the world’s most pressing issues
3. Malua Wildlife Habitat Conservation Bank Launches in Sabah, Malaysia: New Business Model Generates Innovative Product to Support Wildlife Conservation (2008)

Mongolia The 2012 Law on Environmental Impact Assessment included the requirements for offset methods (companies should submit an environmental management plan with a budget for its implementation for a given project, and must submit 50% of the budgeted cost to MEGD beforehand); The Nature Conservancy with MEGD developed the handbook of offset methodology. Methods for conducting technical and biological restoration in areas degraded by mining activities were adopted in 2009 and methods for calculating the cost of conducting restoration in areas degraded by mining activities and assessing environment damage costs and calculating offsets were adopted in 2010. Professional training for governmental and non-governmental workers has also been conducted

Republic of Korea Ecosystem conservation cooperation charge (Natural Environment Conservation Act, Article 46-1) has remained unchanged (250 KRW/m2) since its initiation in 2001. Considering loss of biodiversity and ecosystem service value due to development, reasonable adjustment is necessary. The amount of charge should be readjusted every year through official notification. Forest Resource Replacement Charge, which has a similar concept to Ecosystem Conservation Cooperation Charge, the charge is 3,070 KRW/m2 for semi-conservation mountain area, 3,990 KRW/m2 for conservation mountain area and 6,140 KRW/m2 for alteration restriction zone. These figures are about 10 to 25 times of that of Ecosystem Conservation Cooperation Charge as of 2013.
1. Wetland banking
2. Ecosystem conservation charge to large scale development projects

Vietnam Compensation for damage to biodiversity, Status 2011

Europe
Belgium Environmental liability policy

Czech Republic financial reserve and liability insurance

European Union (2014) Policy options for the EU ‘no net loss’ initiative, annexes on modeling and experiences
(2014) Green Infrastructure Strategy and the EU No Net Loss initiative
(2010, 2011) EU Habitats and Birds Directives, Environmental Liability Directive, Status 2011, EU Environmental Liability Regime, Liability and compensation, EU Environmental Liability Regime

France (2014) Innovative initiatives for biodiversity financing - Superoffsetting damage to biodiversity. Full report
(2014) No net loss policies and offsetting in France
(2012) Mesures compensatoires
1. mesures compensatoires
2. Biodiversity bank, Status 2011
3. Caisse des Dépôts et Consignations (CDC) - Biodiversité
4. Mitigation hierarchy in France

Germany (2014) No net loss policies and offsetting in Germany
(2010, 2011) Impact mitigation regulations, Status 2011, Impact Mitigation Regulations (IMR)

Luxembourg 1. compensation programmes for biotopes destroyed by public works
2. National environmental compensation

Netherlands (2014) No net loss policies and offsetting in the Netherlands
Trees for travel, Support to offset program

Slovak Republic deterioration fee for destruction of protected species and habitats (by infrastructure development

Spain Bancos de conservación de la naturaleza

Sweden (2014) No net loss policies and offsetting in Sweden
(2010, 2011) Compensation in road building, Status 2011
National ecological compensation system

United Kingdom (2014) No net loss policies and offsetting in England
(2014) In April 2012, Government launched a biodiversity offsetting pilot scheme to test an approach to biodiversity offsetting in England. The six pilots finished at the end of March and will require several months of analysis before they can fully inform our thinking. In September 2013, Government launched a consultation on biodiversity offsetting and is considering responses. The Scottish Borders Biodiversity Offset scheme is an example of work that aims to compensate for the residual impacts of renewable development, in line with a ‘no net loss’ policy in the local development plan. This has delivered improved habitats for Black Grouse at a range of locations.
(2014) Biodiversity Offsets are being pilotted in England
(2010, 2011) Status, Status 2011
(2012) Guidance for offset providers, March 2012
(2011) Guiding principles for biodiversity offsetting, July 2011
(2011) Options Stage Impact Assessment: Offsetting the impact of development on biodiversity, June 2011
(2009) Scoping study for the design and use of biodiversity offsets in an English Context
(2010) Associated British Ports
(2003) Biodiversity offsets: mileage, methods and (maybe) markets: “Beyond carbon - emerging markets for ecosystem services” Katoomba VI
(2005) Biodiversity offsets: good for business and biodiversity? Presentation to IPIECA Biodiversity Working Group
Guidance for developers that would like to use offsetting
Distinctiveness Bands for the Biodiversity Offsetting Pilot
Metric for the biodiversity offsetting pilot in England
Costing potential actions to offset the impact of development on biodiversityannexes

Oceania
Australia In October 2012, the Australian Government released an environmental offsets policy and offsets assessment guide. The policy provides upfront guidance on the role of environmental offsets in the environmental impact assessment process, and how consideration is given to the suitability of a proposed environmental offset for matters protected under the EPBC Act. The guide gives effect to the policy's requirements through quantifying impacts and offsets for nationally threatened species and ecological communities. The policy seeks to improve the environmental outcomes that result from offsets whilst also delivering greater clarity and certainty to industry. The policy requires offsets to deliver conservation outcomes that improve or maintain the viability of the aspect of the environment that is being impacted, such as a particular type of threatened species habitat or heritage place. The policy and guide also encourage greater avoidance and minimisation of impacts by project proponents through enabling developers to clearly anticipate future costs associated with delivering offsets.
The New South Wales Government’s BioBanking program is a market-based scheme that provides a streamlined biodiversity assessment process for development, a rigorous and credible offsetting scheme as well as an opportunity for rural landowners to generate income by managing land for conservation. BioBanking enables 'biodiversity credits' to be generated by landowners who commit to enhance and protect biodiversity values on their land through a biobanking agreement. These credits can then be sold, generating funds for the management of the site. Credits can be used to counterbalance (or offset) the impacts on biodiversity values that are likely to occur as a result of development. The credits can also be sold to those seeking to invest in conservation outcomes, including philanthropic organisations and government. Under the BioBanking Scheme, as of 23 March 2012, nine biobanking agreements have been approved, conserving over 450 hectares of native vegetation and threatened species in perpetuity. A total of 1,272 ecosystem credits have been retired and over AU$2.4 million have been deposited into the BioBanking Trust Fund. Credit prices have ranged from AU$2,500 to AU$9,500 per credit. Over AU$530 000 in management payments have been paid out to landowners from the BioBanking Trust Fund.
1. BushBroker and Native Vegetation Offsets, BioBanking, Marine Fish Habitat Offsets
2. Victoria: BushBroker and Native Vegetation Offsets, New South Wales: BioBanking, Property Vegetation Plan Offsets, South Australia: Native Vegetation and Scattered Tree Offsets, Queensland: Environmental Offsets Framework Policy, Vegetation Management Offsets, Marine Fish Habitat Offsets, Koala Offsets, Western Australia: Tasmania, Status on offsets 2011
3. BushBid auction of conservation contracts, BushTender and BushBroker programmes
4. Submission on the Proposed Biodiversity Banking Scheme (2008)
5. BioBanking: Biodiversity Banking and Offsets Scheme
6. Biodiversity certification and banking in coastal and growth areas (2005)
7. Submission on Green Offsets for Sustainable Development (2002)
8. Biodiversity banking and offset scheme of New South Wales (NSW), Australia (2009)
9. Preliminary Position Statement No.9: Environmental Offsets Comments by the Conservation Commission of Western Australia

New Zealand Ecological compensation, encompassing biodiversity offsets and mitigation, is increasingly being offered in New Zealand as a form of environmental redress and is set as a condition of approval for development to occur. Brown et al. (2013) investigated compliance with 245 conditions relating to ecological compensation set under the Resource Management Act across 81 case studies. They found overall compliance in 64.8% of cases, demonstrating that the anticipated benefits from ecological compensation mechanisms are not being achieved in approximately one-third of cases. Since 2009, there has been a multiagency programme of work to investigate the concept of biodiversity offsetting in New Zealand. Biodiversity offsets seek to counter-balance the unavoidable impacts of development on biodiversity by enhancing the state of biodiversity elsewhere, and are defined as: Measurable conservation outcomes resulting from actions designed to compensate for significant residual adverse biodiversity impacts arising from project development after appropriate prevention and mitigation measures have been taken. The goal of biodiversity offsets is to achieve no net loss and preferably a net gain of biodiversity on the ground. (BOP 2012). What differentiates biodiversity offsetting from other forms of impact management is that it requires: A mitigation hierarchy to be followed to identify the residual adverse effects that may be offset; Explicit measurement and balancing of biodiversity that is predicted to be lost and gained; and A goal of no net loss and preferably a net gain of biodiversity to be reasonably demonstrated and then achieved on the ground. Guidance on Good Practice Biodiversity Offsetting in New Zealand is to be released in early 2014 as a non-statutory document to inform developers and decision-makers about good practice in demonstrating no net loss via a robust biodiversity offsetting process. It is supported by a series of detailed technical resources that are intended for offset designers, and practitioners will provide tools to address the drawdown of natural capital associated with development projects.
1. Resource Management Act of 1991
2. Strongman Coalmine offset project, Status on offsets 2011

Status and trends
Global Monitoring Report 2012: Biodiversity offset mechanisms are well advanced in North America and Australia, and increasingly developed in a number of European countries, such as United Kingdom, France and Sweden. Private and public expenditures for ecological compensation under key federal programs are estimated to be approximately $3.8 billion annually in the United States (ELI 2007). Mitigation banking mechanisms can reduce uncertainty over whether the compensatory mitigation will be successful in offsetting project impacts; assemble and apply extensive financial resources, planning, and scientific expertise not always available to many permittee-responsible compensatory mitigation proposals; reduce permit processing times and provide more cost-effective compensatory mitigation opportunities; and enable the efficient use of limited agency resources in the review and compliance monitoring of compensatory mitigation projects because of consolidation (U.S.EPA).
Over two thirds of countries have legal requirements through environmental impact assessment legislations, policies and procedures for compensations for environmental damages, and nearly a quarter of them have already implemented or tested various forms of biodiversity offset mechanisms. As 9 percent of global ecosystems need to be restored under the Strategic Plan for Biodiversity 2011-2020, the potential for biodiversity offsets can mount up to $45 billion through ecosystems restoration.

  • United Nations
  • United Nations Environment Programme