Evaluation of averted loss gains under Victorian biodiversity offset policy.

Biodiversity offsetting seeks to balance losses in biodiversity from development with offset actions that generate biodiversity gains. In Victoria, Australia, native vegetation offset policy aims to achieve No Net Loss (NNL) in biodiversity, meaning gains from offsetting must be at least equivalent to development losses. Gains may be generated from measures that protect the existing biodiversity from loss (averted loss gains), and those that restore or enhance the biodiversity (improvement gains). However, previous work has suggested the Victorian offset policy overestimates averted loss gains, allowing a larger development impact for the same offset. Here, we undertake a detailed examination of five impact‐offset exchanges permitted under Victorian offset policy in 2019 and 2020, comparing gains under the policy to those resulting from plausible counterfactuals. We find that the projected gains from averted loss were likely to be overestimated by between 3 and 240 times, compared to the counterfactuals. If this level of over‐estimation holds throughout the scheme, it would mean that up to 86% of offsets purchased do not compensate for permitted impacts to native vegetation, thwarting Victoria's NNL policy objective. We discuss the key policy issues and make recommendations to address over‐estimating averted loss gains. [ABSTRACT FROM AUTHOR]