Australasian Science: Australia's authority on science since 1938

Casting a Critical Eye over Biodiversity Offsets

By Georgia Garrard, Sarah Bekessy and Brendan Wintle

Biodiversity offset policies may result in perverse incentives that lock in biodiversity loss.

Biodiversity-offsetting policies are in place across Australia, administered by both state and federal authorities, to ensure that there are no net losses of native vegetation. Development in one part of the landscape is “offset’ by some action in another part of the landscape.

Readers might be alarmed, then, to learn that in 2014 almost 300,000 hectares of native vegetation was cleared in Queensland. That’s an area bigger than the Australian Capital Territory, and more than 3.5 times as much as was cleared in 2010.

What’s going on? Why is the rate of native vegetation clearing increasing when we have policies designed to stop it?

An increasing body of evidence suggests that biodiversity offset policies will struggle to achieve goals of no net loss, let alone net gain. In fact, biodiversity offset policies may result in a number of perverse incentives that lock in biodiversity loss.

Changes in land tenure or protection of existing assets (such as unprotected remnant vegetation) are the most common forms of offsets. By definition, these result in net loss or depletion of biodiversity. Any lag that occurs between habitat loss and the establishment of new habitat or recovery means that a net loss is guaranteed in the medium term.

Indeed, there are very few conditions under which offset policies can deliver no net loss. Restoration of currently degraded sites is the only way to achieve true net gain, but there are pitifully few examples of where this has actually occurred, and many scientists are extremely sceptical about the potential for restoration to generate legitimate offsets.

Evaluation of the effectiveness of offset policy is rare; however, the evidence suggests that a net loss is occurring in the cases where accounting has been done.

When designing and implementing an offset policy, regulators must determine how to measure biodiversity, what baseline should be used to assess losses and gains, and what constitutes an offset. Uncertainty is present in each of these steps – whether it is associated with variation or error in environmental measurements or multiple ways of assessing them – and different approaches will result in very different outcomes.

In their original conception, offsets were supposed to be considered in the context of the mitigation hierarchy, whereby offsets were used as the last resort when all options to avoid and mitigate the impacts were exhausted. However, there is little science to support policy and standards to demonstrate that adequate attention has been paid to avoidance and mitigation.

Then there’s policy creep, the gradual process by which policies change over time. On the whole, incremental changes have led to a general weakening of the capacity for offset policies to reverse or halt native vegetation loss.

For example, when it was introduced in 2002, the objective of Victoria’s native vegetation clearing regulations was to achieve “a reversal, across the entire landscape, of the long-term decline in the extent and quality of native vegetation, leading to a net gain”. In 2012 the rules were reviewed and the goal became “no net loss in the contribution made by native vegetation to Victoria’s biodiversity”. Another significant change was the relaxing of the offsets hierarchy, which dictates that offsetting should only occur when it is not possible to avoid or mitigate onsite losses.

Alternatives to biodiversity offsetting do exist. One obvious option is to simply prohibit the clearance of native vegetation. Prohibiting native vegetation clearance has a number of advantages. It provides clarity and certainty for landholders and industry about what is and isn’t permitted. And, by emphasising the value of remnant native vegetation as something that cannot be simply recreated somewhere else, it would encourage innovative approaches to development.

Prohibiting native vegetation clearance also protects threatened species by reducing the number one threat to Australia’s endangered species and communities. Vegetation clearing is noted as an ongoing threat to 26 of Australia’s 29 nationally-listed critically endangered ecological communities, and the majority of listed flora and fauna species.

In the spirit of evidence-based policy development, an important first step is to measure and evaluate the outcomes of 15 years of offset policies around Australia and internationally. Ideally this evaluation would allow a comparison of offsetting with other policy and regulatory instruments, such as prohibiting land-clearing, in terms of how well they achieve environmental, social and economic outcomes.

Georgia Garrard, Sarah Bekessy and Brendan Wintle are members of the ARC Centre of Excellence for Environmental Decisions. Georgia and Sarah are based at RMIT University, and Brendan is based at The University of Melbourne.