This Chapter draws upon contributions made by in the following report:
Evans M.C. (2017). An evaluation of the efficacy of the Australian Environment Protection and Biodiversity Conservation Act (EPBC Act) 1999 Environmental Offsets Policy. Report prepared for the Department of the Environment and Energy.
A version of this Chapter is in preparation for publication and may be cited as:
Evans M.C. (In preparation). Opportunities and risks in the implementation of biodiversity offset policy in Australia. Environmental Policy & Governance.
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Abstract
Biodiversity offset policies have been embraced worldwide as a mechanism for reconciling economic development and environmental protection. Much of the research into biodiversity offsetting to date has been focused on developing and refining offset metrics, and evaluating the environmental outcomes of offsets at the site scale. However, there has been limited analysis of the biodiversity offset policy process as a whole, and how the interpretation and implementation of the policy in practice may ultimately impede or enable environmental outcomes. In this paper, I present the perspectives of policymakers, practitioners and industry proponents on how improved outcomes for biodiversity could be delivered under the Australian Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) Environmental Offsets Policy (2012).
Australia is an early adopter of biodiversity offsetting, with policies in place in most state, territory and federal jurisdictions. Drawing on semi-structured interviews with key informants, I found three major results. First, the ‘durability’ of offsets over time – either because of limited regulatory oversight or because of insecure land tenure arrangements – was considered to be a major policy limitation. Second, the potential for offsetting to be effective and efficient is severely constrained by the fragmentation that exists within government departments at the federal level, as well as between state and territory governments. Third, stakeholders expressed concern at the “piecemeal” outcomes resulting from current policy arrangements, and argued that offsets should be designed and implemented at the landscape scale to ensure both long-term environmental outcomes and economic efficiency. The paper concludes with prospects for how these challenges may be addressed within the current institutional and political environment.
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Introduction
“…they say that offsets are 90% other stuff and 10% ecology”
Industry respondent 3
“I think there’s a very large focus on the technical aspects of an offset…the metrics and whether the habitat meets all that, which is great, it has to be. I don’t think there’s much attention given to the legal, financial and governance side of offsets at all”
Broker respondent 1
The continued erosion of biodiversity and associated ecosystem services is a key public policy issue globally. Governments are increasingly turning towards biodiversity offsetting as a mechanism to counterbalance the impacts from economic development, with the goal being an environmental outcome that is “no net loss” or “net gain” (Boisvert et al., 2013; Boisvert, 2015; Bull et al., 2013; Gardner et al., 2013; Maron et al., 2016; ten Kate et al., 2004). The number of offset schemes worldwide has increased dramatically over the last two decades (Ives and Bekessy, 2015), and there are now at least 69 countries with national policies in place, in addition to international policies under the International Union for the Conservation of Nature (IUCN, 2016) and the International Finance Corporation (IFC, 2012).
Considerable scholarship exists on the principles underpinning biodiversity offsetting (Bull et al., 2013; Gardner et al., 2013; McKenney and Kiesecker, 2010), the design of metrics used to quantify biodiversity losses and gains through offset trades (Bull et al., 2014; Gibbons et al., 2016; Gonçalves et al., 2015; Quétier and Lavorel, 2011), and the ethical and social justice issues raised by the “commodification of nature” as required by such policies (Apostolopoulou and Adams, 2017; Bidaud et al., 2017; Ives and Bekessy, 2015; Moreno-Mateos et al., 2015; Spash, 2015; Spash and Aslaksen, 2015; Sullivan and Hannis, 2015; Taherzadeh and Howley, 2017). Up until recently, very few studies have examined how offset policy is administered, implemented and evaluated following the initial design phases (Brown et al., 2013, 2014; Clare and Krogman, 2013; Lukey et al., In press).
There is now a growing recognition within the conservation literature that the institutional and political drivers which influence the behavior of policy actors ultimately determine
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the biodiversity outcomes from offsetting (Damiens et al., 2017; Gordon et al., 2015;
Maron et al., 2016; Salzman and Ruhl, 2000, 2010). Such an insight is crucial, given that a central concern of scientists, scholars and members of civil society is the current lack of evidence that offsetting is delivering its promised outcomes for biodiversity (Curran et al., 2013; Gibbons and Lindenmayer, 2007; Lindenmayer et al., 2017; Maron et al., 2012, 2016; May et al., 2016). For example, the United States Species Banking program has been in operation since 1995, yet it is still not known to what extent impacts to endangered species have been compensated by bank sites (Bunn et al., 2014; Fox and Nino-Murcia, 2005). Similarly in Australia, an early adopter of biodiversity offsetting (Miller et al., 2015), there is a “…lack of evidence that offsets are effective and actually achieving their intended outcomes” (The Senate Environment and Communications References Committee, 2014).
In this paper, I examine stakeholder perspectives of the efficacy of biodiversity offsetting in Australia, with a particular focus on how the policy is interpreted and implemented in practice. Biodiversity offsetting has been used both formally and informally in Australia for the last 20 years, and formal policies are now in place at the federal level and in most states and territories (Maron et al. 2015). Here, I focus specifically on the federal Environmental Offsets Policy (2012), which was designed in response to stakeholder dissatisfaction with the Australian Government’s ad-hoc approach to offsetting in use since 2001 (Miller et al., 2015). The Environmental Offsets Policy (2012) applies specifically to ‘matters of national environmental significance’ (MNES) which are under the jurisdiction of the federal Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). Offsets under the EPBC Act are required to deliver an overall conservation outcome that improves or maintains the viability for a protected matter as compared to what is likely to have occurred under the status quo (Maron, et al., 2013;
Miller et al., 2015). The policy is underpinned by a loss-gain calculator which is used by proponents, consultants and the regulator to estimate offset requirements14 (Chapter Five, Gibbons et al., 2016; Miller et al., 2015).
Environmental impact assessment (EIA) in Australia frequently crosses regulatory processes at federal, state and local levels (Macintosh, 2010b, 2010a), hence a federal approval under the EPBC Act will often still require interactions with state and local
14 Available at: http://www.environment.gov.au/epbc/publications/epbc-act-environmental-offsets-policy
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regulatory bodies. Contractual arrangements required to deliver biodiversity offsets within this regulatory environment are therefore highly complex, and specialist intermediaries such as offset brokers have emerged in response (Coggan et al., 2013a). A range of other third parties may also participate in offset governance (Martin et al., 2016), such as environmental consultants and offset providers (e.g landholders and non-government organisations). An understanding of the efficacy of biodiversity offsetting therefore requires the perspectives of a number of stakeholder groups to be considered, along with an appreciation of how each group experiences policy implementation.
Specifically, this research aimed to understand:
• The roles and experiences of policy actors involved in the process through which biodiversity offsets are designed, assessed, implemented and evaluated under the EPBC Act;
• Factors which may enable or inhibit good policy outcomes as part of this process;
• How improved policy outcomes could be delivered.
Methodology
This research uses qualitative data from semi-structured interviews with 30 policymakers, practitioners and industry proponents who have had direct experience with the implementation of biodiversity offset policy in Australia, and specifically the EPBC Act Environmental Offsets Policy (2012). It also draws upon a review of relevant academic and grey literature, policy documentation and legislation.
I recruited participants using a snowball sampling approach (Biernacki and Waldorf, 1981; Blaikie, 2009) through informal networks and via their workplaces. Sampling began with known professional contacts, and further participants were identified by asking interviewees to nominate other potential respondents who could provide additional insights into the biodiversity offset policy process in Australia. The interviewing process continued until no additional themes or insights emerged during individual interviews.
A key aim of this research was to understand the diversity of individuals and organisations involved in the assessment, implementation, and evaluation of biodiversity offsets in Australia, hence I selected interview respondents from a number of stakeholder groups:
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(1) government staff; (2) industry proponents; (3) offset brokers, (4) other specialist knowledge intermediaries (legal and financial advice); (5) environmental consultants; (6) non-government environmental organisations (NGOs) (Table 7.1). Stakeholder groups were identified iteratively through the snowball sampling procedure and the literature review. Interviews with non-government participants (groups 2 to 6) were conducted between December 2015 and March 2016, and interviews with staff from the Australian Government’s Department of the Environment and Energy (hereafter “the Department”
or “the regulator”) were during April and May 2016. Government staff within the Department’s Environmental Standards Division are responsible for the assessment, approval, monitoring and compliance of biodiversity offsets under the EPBC Act.
Executive-level staff within this Division responded to interview requests and identified up to four staff from their Branch15 to participate in the study. A sample interview schedule (Appendix 4.1) and participant information sheet (Appendix 4.2) was provided to all respondents prior to the interview.
Table 7.1 Stakeholder groups, descriptions and abbreviations used to refer to specific interview data in the main body of the Chapter
Stakeholder group Description n Abbreviation
Government Australian Federal Government staff working in offset
assessments, approvals, compliance and enforcement. 13 G [1,2,3]
Industry Representatives from companies who have experience in delivering offsets as part of federal environmental approvals for developments (mining, gas, urban)
4 I [1,2,3]
Brokers Intermediary contracted by the industry proponent (offset buyer) or the offset provider to mediate an offset transaction (as per Coggan et al. 2013a)
3 B [1,2,3]
Legal & financial advice Intermediary contracted by the industry proponent or the offset provider to provide independent legal or financial advice. Work with brokers but do not mediate the transaction
4 LF [1,2,3]
Consultants Ecological specialists with experience in conducting Environmental Impact Assessments for developments, contracted by the industry proponent (for impact assessment) or the offset provider (for assessment of offset suitability)
3 C [1,2,3]
NGO Environmental non-government organisation, either directly involved in offset transactions as an offset provider, and/or through policy advocacy
3 N [1,2,3]
The interview schedule was used to structure questioning, but was flexibly altered or reordered to preserve the flow of the interview and to facilitate in-depth exploration of
15 The current organisational structure of the Australian Department of the Environment and Energy is available in its latest annual report (2016) or may be accessed at: http://www.environment.gov.au/about-us/departmental-structure
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topics raised within the interviews. Participants were asked to provide some contextual information on their role in the organization and their contact with biodiversity offsets, and who else within or outside their organization they interacted with as part of their workflow.
The core of the interview asked participants for their perceptions of the barriers and enablers within the offset process that influence the environmental outcomes delivered by biodiversity offsets. Finally, participants were asked to summarise what they considered to be the key issues that needed to be addressed to improve biodiversity offsetting in Australia. Interviews lasted for up to one hour, and were digitally recorded with the permission of the participant, or otherwise transcribed by hand during the interview. Handwritten notes were also taken during each interview. Digital recordings were professionally transcribed between May and July 2016. Interview transcripts were subsequently provided to all participants, who had the opportunity to check the transcript for inaccuracies or ambiguities and make any necessary revisions.
I analysed interview data by coding passages of text from interview transcripts into thematic categories corresponding to stages in the offset policy process (adapted from Martin et al. 2016): (1) design and proposal, (2) assessment and approval; (3) implementation; (4) monitoring and evaluation; and (5) outcomes. Within each of these stages, I further coded responses into broad domains adapted from Whitten et al. (2012) which reflect the components that underpin and influence the design, assessment, approval and implementation of biodiversity offsets (Figure 7.1).
Figure 7.1. Domains which underpin an effective biodiversity offset market, after Whitten et al.
(2012).
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