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Socio-economic aspects of biodiversity offsets. Joshua Bishop IUCN-The World Conservation Union. 29 September 2006 Pretoria, RSA. Ecological sustainability “no net loss” → “net positive impact” Economic efficiency cost effectiveness → sustainable production Social equity

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socio economic aspects of biodiversity offsets

Socio-economic aspects of biodiversity offsets

Joshua Bishop

IUCN-The World Conservation Union

29 September 2006

Pretoria, RSA

biodiversity offsets and sustainable development
Ecological sustainability

“no net loss” → “net positive impact”

Economic efficiency

cost effectiveness → sustainable production

Social equity

no harm to the poor → poverty reduction

Biodiversity offsets andsustainable development
1 socio economic information and analysis for biodiversity offsets
Institutional context

Demographic trends (e.g. migration)

Regulatory framework (offset requirements; rights to trade offsets)

Resource ownership, access, use and control

Direct and underlying threats to biodiversity

Capacity of NGOs, CBOs, government, etc

Assessment of values

Net benefits of resource uses (= opportunity costs of an offset)

Financial costs of creating an offset (land purchase, environmental enhancement, validation, management in perpetuity)

Non-market benefits of benchmark, impact and offset sites

Social impact analysis

Costs and benefits of impact AND offset to vulnerable groups (e.g. landless and female-headed households, children)

1. Socio-economic information and analysis for biodiversity offsets
2 decision making processes for biodiversity offsets
Participation

Consultation

Local involvement

Local initiation and control

Distant stakeholders (regional, national, global)

Transparency

Who provides what information when, how and to whom?

Credibility

What institutions are trusted to assess impacts, to design, validate and implement sustainable offsets?

2. Decision making processesfor biodiversity offsets
3 financing mechanisms for biodiversity offsets
Sufficiency

Long-term funding (duration of impact)

Autonomy

Independence from expropriation (trust funds)

Risk management

Insuring against failure or non-performance (over-compensation, performance bonds)

3. Financing mechanismsfor biodiversity offsets
assessing biodiversity values
Qualitative methods

Expert opinion

Focus groups

Participatory assessment

Quantitative methods

Market values (surveys, cost models)

Non-market values (revealed preference, stated preference, dose-response function)

Benefits transfer (“fit” data from elsewhere)

Macroeconomic models (for indirect impacts)

Assessing biodiversity values
slide9

Participatory assessment

  • Wealth ranking
  • Calendars of activities (livelihood and forestry)
  • Map of forest product flows
  • Ranking and scoring of livelihood benefits
  • Ranking and scoring of forest benefits
  • Discussion of costs or disadvantages of conservation
  • Key informant calculations
  • Barter game to establish values of non-marketed products
  • PRA sustainability of stock and product flows exercise
  • Feedback by research team

Source: Richards M., Kanel K., Maharjan M. & Davies J. 1999. Towards Participatory Economic Analysis By Forest User Groups In Nepal. Overseas Development Institute in collaboration with the Nepal-UK Community Forestry Project (June).

slide10

Market Valuation Techniques

Non-market Valuation Techniques

Behavioural Linkages

Physical Linkages

Dose-response Functions

Revealed Preference

Stated Preference

Change in Outputs (productivity)

Hedonic Property Analysis

Contingent Valuation Method

Conjoint Analysis (choice models)

Change in Inputs (resource costs)

Hedonic Wage-risk Analysis

Cost-of-illness

Travel Cost Method

Replacement Cost

Preventative Expenditure

Benefit Transfer

costs and benefits of reforestation at selected sites in coastal croatia
Costs and benefits of reforestation at selected sites in Coastal Croatia

World Bank, 1996. “Croatia Coastal Forest Reconstruction and Protection Project: Staff Appraisal Report.” Report No.15518-HR. Washington: World Bank

slide12

Atlantic forests of E. Paraguay

Adapted from: Naidoo R, Ricketts TH (2006) Mapping the Economic Costs and Benefits of Conservation. PLoS Biol 4(11): e360

Mbaracayu Forest Biosphere Reserve

Indigenous Reserve

Agricultural uses:

  • smallholder agriculture (12%)
  • large-scale cattle ranching (14%)
  • soybean production (2.4%)

B<C ($/ha)

Benefit-cost ratios of corridor options:

1) 0.22

2) 0.27

3) 0.76

Ecosystem services valued:

  • Sustainable bushmeat harvest
  • Sustainable timber harvest
  • Bioprospecting

B>C ($/ha)

distribution of the costs and benefits of madagascar s protected areas
Distribution of the costs and benefits of Madagascar’s protected areas

Carret, J.-C., and D. Loyer. 2003. “Comment financer durablement le réseau d’aires protégées terrestres á Madagascar? Apport de l’analyse économique.” Paris: AFD and World Bank

questions for discussion
What are the roles of different stakeholders to ensure the sustainability of offsets?

How to ensure equitable decision-making and sharing of costs and benefits over the very long-term?

How to avoid ‘leakage’ i.e. the transfer of damaging activities to other locations?

How to quantify the indirect impacts of a project and offset (e.g. migration, product use)?

Should developers be liable for indirect impacts, and to what extent?

Questions for discussion