The impacts of development (new infrastructure, energy generation, resource extraction etc.) on ecosystems pose a substantial risk to biodiversity and associated ecosystem services and will continue to do so. Many governments and corporate entities (with notable exceptions), across developed and developing economies, are increasingly mandating protocols for managing these risks, framed by the unifying concept of the mitigation hierarchy. This four-step process compels development to be managed following a sequential appraisal, where impacts are avoided as a priority, then minimised and remediated. The final step, ecological compensation (such as biodiversity offsetting) is one of the main ways in which residual biodiversity losses are addressed. It is often associated with the stated goal of development projects achieving at least ‘no net loss’ of biodiversity, through investments in ecosystem management and protection as well as in sustainable development initiatives that deliver conservation outcomes.
Despite best-practice guidance existing (e.g. the IUCN Policy on Biodiversity Offsets) and the work of the multi-stakeholder Business and Biodiversity Offsets Programme, challenges around, and suboptimal implementation of the mitigation hierarchy has meant that the approach often falls short of achieving its stated aim of ‘no net loss’ of biodiversity, and often fails to consider local populations and cultural values. Furthermore, by design, even best-practice offsetting tends to lead to less biodiversity after a project than before, because many policies allow for the protection of existing biodiversity from later development or harm to be traded for residual losses from the project. As such, ecological compensation approaches like offsetting remain controversial, and their relationship with national or global biodiversity goals lacks clarity.
Controversies around the mitigation hierarchy also arise from the effects of ecological compensation on the livelihoods of people dependent on ecosystems. The conservation or restoration of ecosystems can lead to restrictions on people’s prior uses (e.g. ecosystem conversion to agriculture, hunting, etc.) and challenge the way they value and interact with biodiversity and ecosystems. Impacts can also be positive when offsets provide local communities with new opportunities, or when avoidance and mitigation can ensure people can continue to benefit from ecosystem services or lead to the protection of culturally valued sites. The mitigation hierarchy also raises scientific and technical challenges, e.g. for ecosystem management (including invasive species management) and restoration (including rewilding), and the use of nature-based solutions to mitigate or offset development impacts on ecosystems. Governance challenges, at multiple levels, are also raised by the development and implementation of mitigation and compensation policies.
For the mitigation hierarchy, and particularly ecological compensation, to achieve its full potential as a means of addressing biodiversity losses and as a positive force for both conservation and communities affected by environmental change, continual evaluation and improvement in policy and practice is essential. This is timely and urgent given that the policy space around the mitigation hierarchy and ecological compensation continues to develop rapidly. ’No net loss’ or ‘net gain’ goals for biodiversity increasingly are embedded in national, subnational and corporate policy, not least of which is a proposed outcome goal of ‘no net loss’ of ecosystems in the Post-2020 Global Biodiversity Framework under the Convention on Biological Diversity.
Indeed, novel frameworks and models grounded in the mitigation hierarchy are being explored and implemented to enable achievement of these ambitious outcomes. For example, new approaches for target-based ecological compensation are being developed that can support and align with jurisdiction-level biodiversity targets, improving transparency and the achievement of desirable net biodiversity outcomes. However, to translate these and other advances into policy and to achieve effective implementation of new and established approaches, access to up-to-date information and advice is essential.
While the IUCN Global database on biodiversity offset policies provides an inventory of offset policies, no central, independent and authoritative source of guidance on policy development and implementation currently exists at the global level. The Business and Biodiversity Offsets Programme provided such guidance and established a standard through a multi-sectorial multi-partner platform. Unfortunately, it is no longer active. Several IUCN Commissions have significant relevant expertise to contribute, but there is currently no other Thematic Group covering this work area. This Group will fill that gap, and will work across the IUCN Programme, particularly interacting among all Commissions.