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Biodiversity offsetting 'markets' are odd & interesting. In places regulators under pressure to relax trading rules to make them work more 'effectively'. But we argue (in new BioCons paper https://authors.elsevier.com/c/1c4MU1R~eIUlE ) this comes with big biodv risks. Let's talk offset flexibility. /1
Our thoughts inspired by @EIANZorg 2019 offset conference panel sesh. In short, offsets have 2 major functions. A) compensate for biodv harm in one place so overall no net loss. This is the obvious one. The evidence is offsets have mixed record on this https://conbio.onlinelibrary.wiley.com/doi/full/10.1111/conl.12664 /2
B) probs more important function, is to internalise biodv into development planning. If you harm biodv, have to pay the price for offset - so, it acts like a carbon-tax-like disincentive from harming nature. Early evidence for this effect: https://www.sciencedirect.com/science/article/pii/S1462901118312802?casa_token=V--jB93EJUUAAAAA:qxNGaM85W0jNkLmGp655CPM6NRfBwMb7Ze3opzxf5yD2kIYuYNLS8okcK9YXtX2PYkRf4F5z5og /3
When advocates argue for flexibility (allowing trading between biodv types), often thinking about effect A). Might argue that, in some contexts, flexibility allows you to deliver better biodiversity gains at a lower price. Discussed more in the paper https://authors.elsevier.com/c/1c4MU1R~eIUlE /4
But here's our theory. The more liberal you make the trading rules to benefit economic properties of the 'market', the less carbon-tax-like disincentive to damage nature. The offsetting & avoidance steps of mitigation hierarchy interact. Easier offsetting = weaker avoidance /5
It's a great example of when theory and reality collide. From econ perspective, these 'markets' most efficient when prices & transaction costs are low & there are loads of offsetting options. But these undermine a key mechanism through which offset 'markets' protect nature. /6
We recognise offset 'markets' have issues. We review the ways offset 'markets' can function better without changing trading rules: e.g. invest in raising landholder awareness, increasing transparency. But making them more flexible causes more biodv problems than it solves. /7
In sum: our theory is less flexibile offset systems are more likely to protect biodiversity. Read the paper for other fun stuff on additionality, transaction costs, case studies and examples, and offset economics and politics. https://authors.elsevier.com/c/1c4MU1R~eIUlE /8
Our team ( @DICE_Kent @wildbusiness @martine_maron @J_Simmonds_AUS @Ascelin @CorletWalker @StrangeNiels @RobertsonMorgan) drew on experiences from offset systems around the world, and key papers https://conbio.onlinelibrary.wiley.com/doi/full/10.1111/cobi.13362 https://besjournals.onlinelibrary.wiley.com/doi/abs/10.1111/1365-2664.13372 https://www.sciencedirect.com/science/article/pii/S1462901118312802?casa_token=PWX1DnOOO10AAAAA:ON-jMYKQA0PO5jKaoPRVWzVKRp5Q6H4geXO6Q2N-YVsIx7xWb3HpST6_OKGwZEjI0QmBNwWLDPA. /end
