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The Department of Conservation (DOC) is currently managing a programme funded by the Cross Departmental Research Pool (CDRP) that investigates the feasibility of biodiversity offsetting in New Zealand.
The Biodiversity Offsets Programme aims to develop best-practice guidance for developers and
decision-makers on biodiversity offsetting in New Zealand. This will provide transparent, consistent and practical advice on when and how a biodiversity offset can be considered under New Zealand legislation; and how to develop, implement and monitor a best practice biodiversity offset.
It is not intended to be treated as a formal standard or regulation, and is purely intended to be used in an advisory capacity. It will be informed by specialist restoration ecologists and consultants working with offsets on the ground.
The guidance will include:
- Direction on the Government's bottom line regarding the appropriateness of offsetting
- How to calculate losses and gains to ensure a No Net Loss offset
- Practical measures to overcome barriers to successful implementation
It is hoped this guidance will be available in draft form by early 2012.
DOC plans to use this guidance to help improve future offset/compensation decisions that might be made around developments on public conservation land.
How biodiversity offsetting works on the ground
Offsets are not explicitly provided for under New Zealand's legislative framework. However, they have been contemplated on private land under the Resource Management Act 1991, and are being contemplated on public land under the Crown Minerals Act 1991, and to some extent under the Conservation Act 1987, as a way to transparently quantify environmental compensation.
It is essential to note that offsets do not replace the mitigation hierarchy, but are a means to address the residual adverse biodiversity impacts arising from project development after appropriate avoidance and mitigation measures have been taken.
However, sometimes the biodiversity will be so rare, vulnerable or irreplaceable that it is not appropriate to destroy it, even if it can theoretically be offset. In these situations, a best-practice offset will not be possible and it may not be considered appropriate by the developer or the decision-maker to proceed with the activity or development.
The tools and methodologies developed under the Programme can help decision-makers and developers work out appropriate mitigation package needed to ensure a proposed development results in No Net Loss to biodiversity in an area. This can be done early in the planning process, to help developers understand sooner the true cost of their planned development.
Key components of a biodiversity offset
The general framework for designing offsets has four components:
- Biodiversity counts and measures (collected data)
- A currency constructed from these data
- An accounting model to define offset specifications
- Spatial information to identify potential offset locations
These four components, biodiversity data, a currency, and accounting model and site selection process comprise the general framework for biodiversity offsetting. The currency is the basis for quantifying an impact and the compensatory offset required. The impact and the offset must each be quantified using the same currency units, formed from the same data types, so that comparison in the accounting model is possible. The core output from the accounting model is the offset specification, and this then enters a spatial procedure to identify potential locations where the required offset might be delivered.
Research underpinning best-practice guidance
The biodiversity offsets programme has commissioned a range of research, the results of which will help develop best-practice guidance around offsets.
Some of the research currently being undertaken under the Programme includes:
- Defining offset specifications for three pilot project case studies under the Programme
- Considering appropriate limits and thresholds for offsets
- Developing a biodiversity offset estimator tool for use by conservancies
- Offsetting from a conservation providers' perspective
- The issues and challenges involved in setting up a market for biodiversity offset credits in New Zealand
- Defining appropriate discount rates for biodiversity offsets
- The role of monitoring and compliance in securing better biodiversity outcomes through offsetting
- Practical measures to avoid and overcome systemic barriers to No Net Loss biodiversity offset outcomes in New Zealand
The key technical outputs from this research will be finalised later this year. These include the testing of 'currencies' on actual impact sites and developing suggested offset sites.
The guidance being developed under the Programme may in turn be helpful in the interpretation of what is meant by No Net Loss offsetting, referred to under the draft National Policy Statement on Indigenous Biodiversity, being developed by the Ministry for the Environment (MfE).
Offsets under the draft National Policy Statement on Indigenous Biodiversity
The proposed National Policy Statement (NPS) on Indigenous Biodiversity is intended to provide clearer direction to local authorities on their responsibilities for managing indigenous biodiversity under the Resource Management Act 1991.
In its draft form, the NPS mentions offsets at Policy 5: where adverse effects cannot be adequately mitigated, local authorities must ensure no net loss of biodiversity of areas of significant indigenous vegetation and significant habitats of indigenous fauna by ensuring any residual adverse effects that are more than minor, are offset.
Submissions closed on the draft NPS closed on 2 May 2011. MfE will evaluate the submissions and produce a summary of submissions and provide recommendations to the Minister for the Environment.
See: www.mfe.govt.nz/publications/biodiversity/indigenous-biodiversity/
Aligning with international work on biodiversity offsets
DOC's Biodiversity Offsets Programme continues to align with the international Business and Biodiversity Offsets Programme (BBOP) and DOC has sponsored two mutually beneficial papers under the BBOP research programme. BBOP is developing a draft standard for biodiversity offsets, and to that end are currently trialling their Principles, Criteria and Indicators (PCI) framework, which will serve as a tool to determine whether an offset has been designed and subsequently implemented in accordance with the BBOP Principles.
See: bbop.forest-trends.org/.
The recently released Ecosystem Marketplace 2011 Update: State of Biodiversity Markets report aims to bring transparency and access to information to stakeholders to enable market participants to make more informed decisions, learn from the experience of others, and ultimately facilitate innovative conservation finance.
See: www.forest-trends.org/publication_details.php?publicationID=2848.