A bird in the hand is worth two in the bush: ecological time preference and biodiversity offsets

15th Annual BIOECON Conference 18 20 September 2013, Kings College Cambridge, England‐

Megan C. Evans1*, Martine Maron2, Phil Gibbons1, Hugh P. Possingham3

1 Fenner School of Environment and Society, The Australian National University, Australia2 School of Geography, Planning and Environmental Management, The University of Queensland, Australia3 Centre for Biodiversity and Conservation Science, School of Biological Sciences, The University of Queensland, Australia

megan.evans@anu.edu.au @megcevans

A tree for a tree:

Biodiversity offsetting• Broad goal is to achieve no net loss of biodiversity

(Bull et al. 2013, Gardner et al. 2013)

• Rapid growth in uptake: policies exist in 45 countries, and in development in another 27• Wetland mitigation banking (USA), BioBanking (NSW), Bushbroker (Vic),

EU ‘no net loss by 2020’ , UK pilots, EPBC policy (Australia)

2Gibbons and Lindenmayer (2007) Madsen et al. (2010). State of the Biodiversity Markets Report

Total Wetland and Stream Mitigation Banks (USA) 1980-2009

“…[biodiversity offsetting] could revolutionise

conservation in England by delivering restoration,

creation and long term management on in excess

of 300,000 hectares of habitat over 20 years".

BBC.co.uk, 31 July 2013

“Biodiversity offsetting will unleash a new spirit of

destruction on the land”

- UK Ecosystems Markets Task Force

- George Monbiot, The Guardian

Calculation offset requirements

Key considerations for biodiversity offsets

• Mitigation hierarchy is adhered to

• Limits to offsetting (Pilgrim et al. 2013)

• The type of biodiversity being impacted (‘like-for-like’ or comparable)

• Offsets are additional: benefit is the difference between status quo and

the impact and offset scenario (Maron et al. 2013)

• Uncertainties, including offset likelihood of success (Moilanen et al. 2009)

• the threat status or vulnerability of impacted biodiversity (BBOP 2012)

• the time delay between the ecological impact and delivery of the offset

Offset multipliers

• Multipliers are commonly used to increase offset requirements in an effort to better account for uncertainty, species or ecosystem threat status, and time delays.

• However…• Selection often arbitrary• Lack transparency• May lead to over- or under-estimation

of offset requirements

Pickett et al. (2013)Green and golden bell-frog (Litoria aurea)

Accounting for time delays

Discounting

• Can be used to account for:• Pure time preference (PTP)• Loss of utility due to time delays • Exogenous risks (Overton et al. 2013)

• Employed by some offsetting policies, but no clear guidance for selection• UK: 3.5% (Defra, 2012)

• NZ: 1% (Denne and Bond-Smith, 2012)

• Can have a large influence on offset requirements

Accounting for time delays

Discounting

“the assessment of what is an adequate offset is concerned only with the biodiversity outcome, not with the financial costs of retaining or replacing it”. (Denne and Bond-Smith , 2012)

“…standard expected utility theory suggests one reason for discounting future consumption, namely, the possibility that we will not be around to enjoy it. As individuals, we face a typical annual mortality risk of around 1%, and it makes sense to discount future utility by this amount.” (Quiggin, 2008)

Accounting for species vulnerability and time delays

‘Ecological time preference’

?

Accounting for species vulnerability and time delays

‘Ecological time preference’

?

Accounting for species vulnerability and time delays

‘Ecological time preference’

?

Bettongia penicillata (CE)

Calyptorhynchus banksii graptogyne(E)

Accounting for species vulnerability and time delays

‘Ecological time preference’

where p = the minimum probability of extinction in y years.

• Adopted the IUCN criteria for each threatened species category

• Could used refined estimates from PVA or expert opinion (Regan et al. 2013)

Threat StatusIUCN Criteria for

Probability of Extinction in the Wild

Annual Probability of Extinction

(Geometric mean)

Critically Endangered At least 50% in 10 years 6.7%

Endangered At least 20% in 20 years 1.1%

Vulnerable At least 10% in 100 years 0.1%

Bettongia penicillata (CE)

Calyptorhynchus banksii graptogyne(E)

IUCN (2001)

EPBC Act (1999) Environmental Offsets Policy

• Environmental Protection and Biodiversity Conservation Act (1999)

• Regulates impacts on Matters of National Environmental Significance (MNES)

• 1310 threatened flora, 446 threatened fauna, 66 ecological communities, + migratory spp, World Heritage sites

• Draft offset policy 2007, public consultation on new draft ~2011

• Consultation on metric (P Gibbons) early 2012, NERP-ED project mid-2012, policy delivery October 2012

Miller K, Dripps K, Trezise J, Kraus S, Evans MC, Maron M, Gibbons P, Possingham HP. In prep. A metric for determining biodiversity offsets under a regulatory framework

Decision Point #69 www.decision-point.com.au

EPBC Act Environmental Offsets Policy

Policy principlesSuitable offsets must:

1. improve or maintain viability of protected matter 2. be built around direct offsets but may include other compensatory

measures3. in proportion to the level of statutory protection that applies to the

protected matter4. be of a size and scale proportionate to the residual impacts on the

protected matter5. effectively account for and manage the risks of the offset not

succeeding6. be additional to what is already required7. be efficient, effective, timely, transparent, scientifically robust and

reasonablehttp://www.environment.gov.au/epbc/publications/environmental-offsets-policy.html

Loss-gain metric

No net loss of biodiversity is achieved when the net present value (NPV) of the

combined impact and offset = 0 at :

where: = value of an offset = value of the original impact , r is the annual discount rate

and: =

= future value of offset site under impact-and-offset scenario = future value of offset site under baseline/status quo

Gibbons P, Evans MC, et al. In review. Methods in Ecology & Evolution.

𝑵𝑷𝑽=𝑽 𝒐×𝑫 (𝒕 )−𝑽 𝒊

Loss-gain metric

• Impact calculation based on most relevant attribute/s:• Area of habitat or community• Number of features• Condition of habitat• Birth rate• Mortality rate• Number of individuals

• Offset calculation uses inputs from impact calculation to determine the % of impact compensated

Time horizon (years)

Start valueFuture value

w/o offset ()

Future value w offset

()

Raw gain( - ) NPV

Gibbons P, Evans MC, et al. In review. Methods in Ecology & Evolution.

‘Ecological time preference’ and biodiversity offsets

Key conclusions

• Provides a robust scientific basis for discounting biodiversity offset requirements• Avoids arbitrary selection of threat-based multipliers

• PTP may still be considered (e.g benefit-cost analysis of offset delivery), but must first satisfy ‘no net loss’ criterion

• Places an indirect price on biodiversity that is differentiated based on vulnerability• A generic discount rate implies humans place no greater preference over

a critically endangered species compared to a common species

• Incentivizes larger offsets (and adherence to mitigation hierarchy) for more threatened species

• Explicit consideration of “offsetability” (c.f Pilgrim et al. 2013)

‘Ecological time preference’ and biodiversity offsets

Next steps

• Analyse offset requirements under alternative scenarios: • discount rate, time length, species & offset

response curves

• RobOff (Pouzols, Burgman and Moilanen, 2012)

• Offset metric comparison:• ‘instantaneous’ value of impact and offset

(Gibbons et al. in review), vs.

• cumulative values (Overton et al. 2013)

• Case study – Red-tailed black cockatoo (Maron et al. 2010)

Figure from Arponen et al. (2005)

Questions?

18

E: megan.evans@anu.edu.au T: @megcevans

W: economical-ecology.com

www.nerpdecisions.edu.au

www.ceed.edu.au

CSIRO Climate Adaptation Flagship Top-up Scholarship www.csiro.au

Thanks to support from

My supervisors:Dr. Karen Hussey & Dr. Phil Gibbons (ANU), Dr. Stuart Whitten & Dr. Tara Martin (CSIRO)

References

Bull, J.W., Suttle, K.B., Gordon, A., Singh, N.J. & Milner-Gulland, E.J. (2013). Biodiversity offsets in theory and practice. Oryx, 47, 369–380.Department for Environment, Food and Rural Affairs (Defra), (2013). Biodiversity offsetting in England: Green paper.

Denne, T. & Bond-Smith, S. (2012). Discounting for Biodiversity Offsets. Covec, Report prepared for NZ Department of Conservation.

Gibbons, P. & Lindenmayer, D.B. (2007). Offsets for land clearing: No net loss or the tail wagging the dog? Ecological Management & Restoration, 8, 26–31.

Gibbons P, Evans MC, Maron M, Gordon A, Le Roux, D, von Hase, A, Lindenmayer, DB and Possingham, HP. In review. Key guiding principles for biodiversity offsets translated into a simple assessment methodology. Methods in Ecology & Evolution.

Gardner, T.A., Von Hase, A., Brownlie, S., Ekstrom, J.M.M., Pilgrim, J.D., Savy, C.E., Stephens, R.T.T., Treweek, J., Ussher, G.T., Ward, G. & Ten Kate, K. (2013). Biodiversity Offsets and the Challenge of Achieving No Net Loss. Conservation Biology

Madsen, B., Carroll, N. & Moore Brands, K. (2010). State of Biodiversity Markets Report: Offset and Compensation Programs Worldwide.

Maron, M., Dunn, P.K., McAlpine, C.A. & Apan, A. (2010). Can offsets really compensate for habitat removal? The case of the endangered red-tailed black-cockatoo. Journal of Applied Ecology, 47, 348–355.Moilanen, A., van Teeffelen, A.J.A., Ben-Haim, Y. & Ferrier, S. (2009). How Much Compensation is Enough? A Framework for Incorporating Uncertainty and Time Discounting When Calculating Offset Ratios for Impacted Habitat. Restoration Ecology, 17, 470–478.

References

Maron, M., Rhodes, J.R. & Gibbons, P. (2013). Calculating the benefit of conservation actions. Conservation LettersOverton, J.M., Stephens, R.T.T. & Ferrier, S. (2013). Net present biodiversity value and the design of biodiversity offsets. Ambio, 42, 100–10.Pickett, E.J., Stockwell, M.P., Bower, D.S., Garnham, J.I., Pollard, C.J., Clulow, J. & Mahony, M.J. (2013). Achieving no net loss in habitat offset of a threatened frog required high offset ratio and intensive monitoring. Biological Conservation, 157, 156–162.

Pilgrim, J.D., Brownlie, S., Ekstrom, J.M.M., Gardner, T. a., von Hase, A., ten Kate, K., Savy, C.E., Stephens, R.T.T., Temple, H.J., Treweek, J., Ussher, G.T. & Ward, G. (2012). A process for assessing offsetability of biodiversity impacts. Conservation Letters,

Pouzols, F.M., Burgman, M.A. & Moilanen, A. (2012). Methods for allocation of habitat management, maintenance, restoration and offsetting, when conservation actions have uncertain consequences. Biological Conservation, 153, 41–50.

Quiggin, J. (2008). Stern and his critics on discounting and climate change: an editorial essay. Climatic Change, 89, 195–205.

Regan, T.J., Taylor, B.L., Thompson, G.G., Cochrane, J.F., Ralls, K., Runge, M.C. & Merrick, R. (2013). Testing Decision Rules for Categorizing Species’ Extinction Risk to Help Develop Quantitative Listing Criteria for the U.S. Endangered Species Act. Conservation Biology

Salzman, J. & Ruhl, J.B. (2000). Currencies and the Commodification of Environmental Law. Stanford Law Review, 53, 607–694.

Walker, S., Brower, A.L., Stephens, R.T.T. & Lee, W.G. (2009). Why bartering biodiversity fails. Conservation Letters, 2, 149–157.