habitat banking compliance markets for biodiversity and ecosystem services
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Habitat Banking: compliance markets for biodiversity and ecosystem services. Mutli-disciplinary work. Led by: eftec IEEP With: Stratus Consulting IUCN Technical University Berlin Pels Rijcken Droogleever Fortuijn BBOP experts. Outline of Presentation. What is Habitat Banking?

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Presentation Transcript
mutli disciplinary work
Mutli-disciplinary work
  • Led by:
    • eftec
    • IEEP
  • With:
    • Stratus Consulting
    • IUCN
    • Technical University Berlin
    • Pels Rijcken Droogleever Fortuijn
    • BBOP experts
outline of presentation
Outline of Presentation
  • What is Habitat Banking?
  • Design of Habitat Banking (in the EU?)
  • Issues for Discussion
turning offsets into an asset traded in a market mechanism
Turning offsets into an asset traded in a market mechanism
  • Offsets rely on credits being equivalent to debits.
  • With more offsets, equivalence makes use of standardised metrics (in many cases)
  • Project delays costly
  • Produce credits in anticipation that damage will happen that causes debits in the future
what is habitat banking
What is habitat banking?
  • “a market where the credits from actions with beneficial biodiversity outcomes can be purchased to offset the debit from environmental damage. Credits can be produced in advance of, and without ex-ante links to, the debits they compensate for, and stored over time”.
what is habitat banking1
What is habitat banking?
  • Biodiversity credits = both habitats and species.
  • Credits can be purchased:
    • ex ante for planned projects; and
    • can also be used to compensate (ex-post) for accidental damage to biodiversity (ELD).
  • Create credits by additional actions (the requirement that the outcome would not have occurred otherwise):
    • restoration or creation of habitats;
    • measures that enhance the viability of species populations (e.g. removal of alien predators);
    • Averted risk - protection of valuable habitats that are at risk of loss or degradation
market design
Market Design
  • Balancing the need for:
    • Liquidity in a market, with
    • Constraints of regulation necessary to ensure outcomes
design
Design
  • Habitat Banking should be an additional policy instrument for No Net Loss of biodiversity
  • European framework for habitat banking? – providing consistency:
    • In conservation actions, and
    • Across the single market
  • Policy objectives to:
    • Reduce damage to biodiversity
    • Ensure compensation for residual damage
design1
Design
  • Principles:
    • Polluter Pays (the damager compensates)
    • Mitigation Hierarchy
    • Precautionary Principle
    • Market established by regulation
    • Public-sector oversight of the market
    • Transparent information (e.g. all documents on web)
    • Mainly outside designated sites
    • Different approaches for different biodiversity
slide10

None, irreplcable and protected

Compensation inappropriate / unfeasible: avoid impacts

Like-for-like compensation usually most appropriate

Options for compensation

Few

Simple compensation measures with trading up

Many

Widespread, non-threatened & substitutable

Scarce, declining & degraded

Threatened / unique

Status of impacted biodiversity

Source: Adapted from BBOP 2009

market design1
Market Design
  • Flexible habitat banking framework in terms of:
    • Compensation under different laws and policies
    • Different equivalence approaches
    • Regulate individual offsets and more complex trades
  • Clear and strong rules
market design to control risks
Market Design to Control Risks
  • Market driven by regulation:
    • Land use planning system
    • Mitigation Hierarchy
    • Biodiversity priorities
    • Governance
    • Transparency
  • Stronger Regulation – New Mechanism
market assurance standards
Market Assurance - Standards
  • Offset level
    • Equivalence, local consultation
  • Developer level ~ company policies
    • Implement mitigation heirarchy
  • System Level (market)
    • Separate governance of developments and offsets
    • Knowledge of biodiversity resources & strategic priorities
slide17
Cost?
  • Global Markets estimated at $2bn per year (ecosystem marketplace)
  • Cost to economy? Land development/construction sectors?
  • No net loss of biodiversity is not free
issues for discussion
Issues for Discussion
  • Is viable market possible? that balances:
    • Biodiversity needs (regulations/constraints)
    • Market liquidity
  • Sufficient ecological information to reduce transactions costs
  • In lieu fee (development/damage tax)
simplified system in lieu fees
Simplified System - In Lieu Fees?
  • For instrument to cover as much biodiversity as possible:
    • For simplified (low transaction cost) debit/credit/ equivalence calculation
    • Fees paid to single independent fund (Trust?)
    • Legal requirements on fund
    • Fund would have strategic view of biodiversity needs – influence habitat banking market, deliver own projects to create credits
market design questions
Market Design Questions
  • Maximizing biodiversity gain through trading up and building strategic goals into the system
  • Issues:
    • viable market possible? (regulation vs liquidity)
    • Ecological information available?
    • In lieu fee (development/damage tax)
offsetting ecosystem services
Offsetting Ecosystem Services
  • Offsets for biodiversity or its ecosystem services?
    • Adds incentives for conservation
    • NOT restrospective (as not additional).
    • Merging markets for biodiversity and ecosystem services could dilute NNL
    • E.g. local amenity and biodiversity provision conflict
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