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Biodiversity offsetting is a globally influential policy mechanism for reconciling trade-offs between development and biodiversity loss. However, there is little robust evidence of its effectiveness. We evaluated the outcomes of a jurisdictional offsetting policy (Victoria, Australia). Offsets under Victorias Native Vegetation Framework (2002-2013) aimed to prevent loss and degradation of remnant vegetation, and generate gains in vegetation extent and quality. We categorised offsets into those with near-complete baseline woody vegetation cover (avoided loss, 2702 ha) and with incomplete cover (regeneration, 501 ha), and evaluated impacts on woody vegetation extent from 2008 to 2018. We used two approaches to estimate the counterfactual. First, we used statistical matching on biophysical covariates: a common approach in conservation impact evaluation, but which risks ignoring potentially important psychosocial confounders. Second, we compared changes in offsets with changes in sites that were not offsets for the study duration but were later enrolled as offsets, to partially account for self-selection bias (where landholders enrolling land may have shared characteristics affecting how they manage land). Matching on biophysical covariates, we estimated that regeneration offsets increased woody vegetation extent by 1.9%-3.6%/year more than non-offset sites (138-180 ha from 2008 to 2018) but this effect weakened with the second approach (0.3%-1.9%/year more than non-offset sites; 19-97 ha from 2008 to 2018) and disappeared when a single outlier land parcel was removed. Neither approach detected any impact of avoided loss offsets. We cannot conclusively demonstrate whether the policy goal of net gain (NG) was achieved because of data limitations. However, given our evidence that the majority of increases in woody vegetation extent were not additional (would have happened without the scheme), a NG outcome seems unlikely. The results highlight the importance of considering self-selection bias in the design and evaluation of regulatory biodiversity offsetting policy, and the challenges of conducting robust impact evaluations of jurisdictional biodiversity offsetting policies.

Biodiversity offsetting is a globally influential policy mechanism for reconciling trade‐offs between development and biodiversity loss. However, there is little robust evidence of its effectiveness. We evaluated the outcomes of a jurisdictional offsetting policy (Victoria, Australia). Offsets under Victoria's Native Vegetation Framework (2002–2013) aimed to prevent loss and degradation of remnant vegetation, and generate gains in vegetation extent and quality. We categorised offsets into those with near‐complete baseline woody vegetation cover ("avoided loss", 2702 ha) and with incomplete cover ("regeneration", 501 ha), and evaluated impacts on woody vegetation extent from 2008 to 2018. We used two approaches to estimate the counterfactual. First, we used statistical matching on biophysical covariates: a common approach in conservation impact evaluation, but which risks ignoring potentially important psychosocial confounders. Second, we compared changes in offsets with changes in sites that were not offsets for the study duration but were later enrolled as offsets, to partially account for self‐selection bias (where landholders enrolling land may have shared characteristics affecting how they manage land). Matching on biophysical covariates, we estimated that regeneration offsets increased woody vegetation extent by 1.9%–3.6%/year more than non‐offset sites (138–180 ha from 2008 to 2018) but this effect weakened with the second approach (0.3%–1.9%/year more than non‐offset sites; 19–97 ha from 2008 to 2018) and disappeared when a single outlier land parcel was removed. Neither approach detected any impact of avoided loss offsets. We cannot conclusively demonstrate whether the policy goal of 'net gain' (NG) was achieved because of data limitations. However, given our evidence that the majority of increases in woody vegetation extent were not additional (would have happened without the scheme), a NG outcome seems unlikely. The results highlight the importance of considering self‐selection bias in the design and evaluation of regulatory biodiversity offsetting policy, and the challenges of conducting robust impact evaluations of jurisdictional biodiversity offsetting policies. [ABSTRACT FROM AUTHOR]

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Increasingly, government and corporate policies on ecological compensation (e.g., offsetting) are requiring "net gain" outcomes for biodiversity. This presents an opportunity to align development with the United Nations Convention on Biological Diversity Post‐2020 Global Biodiversity Framework's (GBF) proposed ambition for overall biodiversity recovery. In this perspective, we describe three conditions that should be accounted for in net gain policy to align outcomes with biodiversity recovery goals: namely, a requirement for residual losses from development to be compensated for by (1) absolute gains, which are (2) scaled to the achievement of explicit biodiversity targets, where (3) gains are demonstrably feasible. We show that few current policies meet these conditions, which risks undermining efforts to achieve the proposed Post‐2020 GBF milestones and goals, as well as other jurisdictional policy imperatives to halt and reverse biodiversity decline. To guide future decision‐making, we provide a supporting decision tree outlining net gain compensation feasibility. [ABSTRACT FROM AUTHOR]

The new global biodiversity framework (GBF) being developed under the Convention on Biological Diversity must drive action to reverse the ongoing decline of the Earth's biodiversity. Explicit, measurable goals that specify the outcomes we want to achieve are needed to set the course for this action. However, the current draft goals and targets fail to set out these clear outcomes. We argue that distinct outcome goals for species, ecosystems, and genetic diversity are essential and should specify net outcomes required for each. Net outcome goals such as "no net loss" do, however, have a controversial history, and loose specification can lead to perverse outcomes. We outline seven general principles to underpin net outcome goal setting that minimize risk of such perverse outcomes. Finally, we recommend inclusion of statements of impact in action targets that support biodiversity goals, and we illustrate the importance of this with an example from the draft GBF action targets. These modifications would help reveal the specific contribution each action would make to achieving the outcome goals and provide clarity on whether the successful achievement of action targets would be adequate to achieve the outcome goals and, in turn, the 2050 vision: living in harmony with nature. [ABSTRACT FROM AUTHOR]

Abstract: Biodiversity offsetting aims to compensate for development‐induced biodiversity loss through commensurate conservation gains and is gaining traction among governments and businesses. However, cost shifting (i.e., diversion of offset funds to other conservation programs) and other perverse incentives can undermine the effectiveness of biodiversity offsetting. Additionality—the requirement that biodiversity offsets result in conservation outcomes that would not have been achieved otherwise—is fundamental to biodiversity offsetting. Cost shifting and violation of additionality can go hand in hand. India's national offsetting program is a case in point. Recent legislation allows the diversion of offset funds to meet the country's preexisting commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Convention on Biological Diversity (CBD). With such diversions, no additional conservation takes place and development impacts remain uncompensated. Temporary additionality cannot be conceded in light of paucity of funds for preexisting commitments unless there is open acknowledgement that fulfillment of such commitments is contingent on offset funds. Two other examples of perverse incentives related to offsetting in India are the touting of inherently neutral offsetting outcomes as conservation gains, a tactic that breeds false complacency and results in reduced incentive for additional conservation efforts, and the clearing of native vegetation for commercial plantations in the name of compensatory afforestation, a practice that leads to biodiversity decline. The risks accompanying cost shifting and other perverse incentives, if not preempted and addressed, will result in net loss of forest cover in India. We recommend accurate baselines, transparent accounting, and open reporting of offset outcomes to ensure biodiversity offsetting achieves adequate and additional compensation for impacts of development. [ABSTRACT FROM AUTHOR]

Biodiversity conservation policies incorporating a no net loss ( NNL) principle are being implemented in many countries. However, there are linguistic and conceptual inconsistencies in the use of terms underlying these NNL policies., We identify inconsistencies that emerge in the usage of eight key terms and phrases associated with NNL policies: biodiversity, frames of reference (i.e. baselines, counterfactuals), no net loss, mitigation hierarchy, biodiversity offset, in-kind/out-of-kind, direct/indirect and multipliers., For each term, we make recommendations to support conceptual convergence, reduce ambiguity and improve clarity in communication and policy documentation. However, we also warn of the challenges in achieving convergence, especially given the linguistic inconsistencies in several of these key concepts among countries in which NNL policies are employed., Policy implications. The recommendations made in this article, on improving clarity and supporting convergence on key no net loss ( NNL) concepts, should help eliminate ambiguity in policy documentation. This is crucial if policymakers are to design robust policies that are (i) transparent, (ii) translatable into practice in a consistent manner and (iii) sufficiently understood and supported by stakeholders to be effective in practice. [ABSTRACT FROM AUTHOR]

Offsetting is a policy instrument intended to provide flexibility for development. We developed a simple calculator to predict when no net loss is feasible using biodiversity offsetting. Assuming offset ratios ≤10:1 are indicative of operational feasibility and employing a discount rate of 3%, we predicted that no net loss is feasible where biodiversity can be restored within 55 years, which restricts the impacts on biodiversity that can be offset using restoration. Alternatively, no net loss is feasible by avoiding loss to biodiversity that is declining under the counterfactual at an annual rate ≥6%. However, this is considerably higher than typical background rates of biodiversity loss so restricts where avoided-loss offsets are feasible. No net loss is theoretically feasible in the broadest range of circumstances if biodiversity gains are provided in advance of development. However, these gains are procured by restoration or avoided loss, so constraints presented by these approaches also apply. We concluded that no net loss is feasible in a limited range of development scenarios unless offset ratios greater than 10:1 are more widely tolerated. [ABSTRACT FROM AUTHOR]

Abstract: The science and practice of ecological restoration are increasingly being called upon to compensate for the loss of biodiversity values caused by development projects. Biodiversity offsetting—compensating for losses of biodiversity at an impact site by generating ecologically equivalent gains elsewhere—therefore places substantial faith in the ability of restoration to recover lost biodiversity. Furthermore, the increase in offset-led restoration multiplies the consequences of failure to restore, since the promise of effective restoration may increase the chance that damage to biodiversity is permitted. But what evidence exists that restoration science and practice can reliably, or even feasibly, achieve the goal of ‘no net loss’ of biodiversity, and under what circumstances are successes and failures more likely? Using recent reviews of the restoration ecology literature, we examine the effectiveness of restoration as an approach for offsetting biodiversity loss, and conclude that many of the expectations set by current offset policy for ecological restoration remain unsupported by evidence. We introduce a conceptual model that illustrates three factors that limit the technical success of offsets: time lags, uncertainty and measurability of the value being offset. These factors can be managed to some extent through sound offset policy design that incorporates active adaptive management, time discounting, explicit accounting for uncertainty, and biodiversity banking. Nevertheless, the domain within which restoration can deliver ‘no net loss’ offsets remains small. A narrowing of the gap between the expectations set by offset policies and the practice of offsetting is urgently required and we urge the development of stronger links between restoration ecologists and those who make policies that are reliant upon restoration science. [Copyright &y& Elsevier]

Market-like mechanisms for biodiversity offsetting have emerged globally as supposedly cost-effective approaches for mitigating the impacts of development. In reality, offset buyers have commonly found that required credits are scarce and/or expensive. One response has been to seek improved market functionality, increasing eligible offset supply by allowing greater flexibility in the offset trading rules. These include increasing the size of geographical trading areas and expanding out-of-kind trades ('geographical' and 'ecological' flexibility). We summarise the arguments for and against flexibility, ultimately arguing that increasing flexibility undermines the achievement of No Net Loss (or Net Gain) of biodiversity where high-quality governance is lacking. We argue expanding out-of-kind trading often increases the pool of potentially eligible offsets with limited conservation justification. This interferes with vital information regarding the scarcity of the impacted biodiversity feature, thereby disincentivising impact avoidance. When a biodiversity feature under threat of development is scarce, expensive offsets are an essential feature of the economics of offsetting which communicate that scarcity, not a problem to be regulated away. We present examples where increasing ecological flexibility may be justifying the loss of conservation priorities. We also discuss how increasing geographical flexibility might compromise the additionality principle. We highlight alternative mechanisms for enhancing offset supply without the risks associated with increasing flexibility, including reducing policy uncertainty and improving engagement and awareness to increase landholder participation. Although there are legitimate reasons for increasing offsetting flexibility in some specific contexts, we argue that the biodiversity risks are considerable, and potentially undermine 'no net loss' outcomes. • As a market-like mechanism, biodiversity offsetting is perceived to function poorly. • In some systems, there is a trend towards more flexible offset trading rules. • Increasing ecological flexibility may undermine biodiversity impact avoidance. • Geographical flexibility may undermine offset additionality. • Improving public awareness and regulatory certainty can improve market function. [ABSTRACT FROM AUTHOR]

Offsetting impacts on fishery resources under losses of marine habitats due to development is important to help safeguard seafood security. However, the gains that marine habitat restoration can create for fishery resources remain largely unquantified. It is unknown what area of fish habitats must be restored to fully offset a hectare of development impacts. Here, we quantify minimum offset areas required to achieve different indicators of no net loss (NNL) goals: economic value, catch of each species, and catch of most-caught species. Simulations are conducted by using a case study of mangrove habitat offsets in Australia to infer the minimum restoration area needed to fully offset fishery losses caused by 84 development projects. We establish two offset policy rules: offsetting closest to the impact site, and offsetting to maximise benefit regardless of location. Achieving NNL for all fishery species requires a substantially larger offset multiplier than achieving NNL for most-caught species, or for economic benefits. For all NNL objectives, choosing optimal offset sites can minimise the area needed for restoration, but required multipliers still always >1. The amount of offset area required to achieve NNL goals for fisheries per unit area lost for each development project increases as development projects accumulated, since the suitable sites for offsetting become scarcer. These results reveal the large and increasing costs of fully offsetting marine impacts and the increasing risks, especially where suitable offset sites are likely to be scarce. • Different offset policy rules require varying minimum offset areas for no net loss of ecosystem services. • Area of fish habitat restoration needed for no net loss of fishery benefits tend to increase as impacts accumulate. • Offsetting losses of fishery ecological benefits needs more habitats than that for fishery economic benefits. [ABSTRACT FROM AUTHOR]