Designing Biodiversity Offsets in Canada: Getting the Fundamentals Right

Biodiversity Offsets in Canada: Getting it Right, Making a Difference

February 14, 2014

University of Ottawa

Marian Weber, Alberta Innovates Technology

What are Offsets

Biodiversity offsets are measurable conservation outcomes resulting from actions designed to compensate for significant residual adverse biodiversity impacts arising from project development after appropriate prevention and mitigation measures have been taken.

The goal of biodiversity offsets is to achieve no net loss and preferably a net gain of biodiversity

Biodiversity offsets are a risk management tool to transfer environmental liabilities from development between parties (Govt, proponent, 3rd parties)

Policy Drivers for ES Markets in AB

3

Integrated Resource

Management System:

Single Regulator

AB GHG Reduction Program:

Emission Performanc

e Credits

AB-carbon offset

system

Framework for Market Based Compliance

and Conservation

Exchange

AB Water Act

Tradable Water licenses

Cumulative Effects

Management System

Integrated Resource

Plans

Regional Plans

AB Land Stewardship

Act

AB Land Use Framework

AB Public Lands Act

AB Enviro Protection &

Enhancement Act

AB Wetlands Policy

Environmental Management Frameworks Air, Water,

biodiversity Provincial Offsets (air, water quality, land)

Wetland mitigation banking

Fisheries Act

Canadian Enviro

Assesment Act

Migratory Birds

Convention Act

Species at Risk

Act

NEB Act

Federal Offsets

And Yet …

Federal Context

DFO - Fisheries Act (2012) s.35(2b) serious harm to fish (populations) Requirement to Offset

Environment Canada “Operational Framework for Use of Conservation Allowances”

Opportunities for the consideration of conservation allowances may arise through processes administered under the Migratory Birds Convention Act, 1994 (MBCA), the Species at Risk Act (SARA), the Canadian Wildlife Act (CWA) and Canadian Environmental Assessment Act, 2012 (CEAA 2012) that could allow Environment Canada to consider a proposal for conservation allowances as a means of mitigating residual environmental effects

DFO – Responsibility of the Applicant Description of Effects on Fish and Fish

Habitat (a) the fish species that are likely to be affected and

the life stages; (c) the probability, magnitude, geographic extent and

duration of the likely effects on fish and fish habitat; and

(d) a description of the methodologies monitoring and contingency measures; cost of

implementing each element of the offsetting plan;

EC Framework – evaluation of allowances within the mitigation

hierarchy; An allowance agreement should include key elements

area, timing, duration, monitoring procedures, milestones and consequences for non-performance

The enforceability of offsets depends on the nature of the Act (CEAA, SARA, etc.)

Each proposal examined on a case-by-case basis 3rd party banking –

established prior to approval of any land- or resource-use activities would be determined on a case-by-case basis

Alberta’s Land Use Framework (2008) A blueprint for land-use

management and decision-making to address Alberta’s growth pressures Set regional goals

and objectives for air, land and water Conservation Offsets

Environmental Management Frameworks Air, Water Quality, Water Quantity, Biodiversity Tiered Threshold Approach (triggers, limits)

ERCB Shell-Jack Pine Decision

Canada and Alberta to consider conservation offsets to address the significant adverse project effects to: wetlands, wetland-reliant species at risk, migratory birds,

biodiversity, cumulative effects to wetlands, traditional plant potential areas, old-growth forests, ….

Regard for proposed environmental objectives for the Athabasca oil sands region and current and proposed policy frameworks, biodiversity management framework, Alberta’s wetlands

policy, and EC’s Operational Framework for Use of Conservation Allowances, etc.

Mines versus death by 1000 cuts

In-situ 2.5-10 ha/day forest lost

~55% native prairie lost ~60% wetland loss

Oilsands mining area 4800 km2 (~15% now)

Many projects do not trigger EIA

No Net Loss? Regulated Landscapes versus - Shifting Mosaic

Planning vs Decentralized

Management and Planning Paradigm Permanence Separation of uses Economic Security Site Specificity Targeting

OFFSETS

Protected Area Network, Corridors

Economic and Ecological Behavior Dynamic Autonomous Feedback effects

OFFSETS

Ecological Risk Management, Range of Natural Variation, floating reserves?

Offsets on Public Lands

Environment Canada Framework on Allowances A provincial or regional land-use plan may set

aside protected areas ahead of time … could function as a “habitat bank” from which future allowances could be obtained. Moral Hazard Problem?

Is there justification for Private offsets on Public Lands Perception

back door to de facto protected areas

SO2 - standards vs tradable allowances Ambient Emissions Target Govt doesn’t know costs

Reserves versus Offsets Don’t know where resources are or value

(exploration) What to avoid Offset market – price avoidance “highest and best use given objectives

Cumulative Effects - The Operational Challenge How to lay out footprint (20-50 years) How does footprint affect objectives under various

legislative, regulatory, and other policy triggers? What to reclaim to E.g. what combinations and configurations of upland

and wetland will support meeting environmental targets?

Future versus Present “wicked problem” Landscape is evolving Depends on what everyone else does

Development Problem •What is the best layout of footprint over the life of a single project? • What is optimal reclamation strategy over space and time?

• If there are environmental markets what is the value of changing my plan?

• How can I optimize the value of my project given environmental constraints or targets?

Coordination Problem •How does my project interact with other projects (which could be mine, or belong to someone else) at a landscape level to meet landscape objectives?

• How can we coordinate and optimize across multiple projects at a landscape level

Planning Problem

•What are current and future regional landscape outcomes? • Adaptive Management

SITE REGION

Integrating Land Use Decisions across Planning Scales

Wicked Problem … To solve alone

Offset Markets versus Offset Transactions Coordination Role Need “Infrastructure” to Address

Interdependence and complexities Sending the right price signals about future

constraints – different habitats, etc. Shadow cost constraints given what

everyone else does Price avoidance on working landscape

relative to goals

Coordination Problem – too complex? Analogy: Airline Gate Trading

Limited number of Gates Trading gates increases airport

efficiency & airlines profitability

Proof of Concept Extended to Airspace trading who gets what path, which gates

Piloted – NVX Australia AB – Software for ILM

(Silvacom) Too complex?

Compare to DFO responsibilities delegated to companies

Summary

Offsets stalled because we haven’t solved the ‘what for’ problem Mitigation Hierarchy A stop gap in the absence of tools for

planning, objectives and thresholds Wrong scale and un-implementable in

practice Un-necessary if we price impacts and

avoidance

Summary

Permanence Working landscape objectives versus de facto

protected areas Clarify what the role of protected areas is

Additionality … (with a plan) is about allocating baselines Distributional issue (WHO PAYS AND HOW

MUCH) not an outcome issue

Summary Policy Patchwork policy and need for

Consistency and Standardization No objectives against which to price/value

decisions Fed frameworks pass liability to companies without

certainty Discourages up-front investment Delegates enforcement (3rd parties?)

NGOs do not want to be enforcers

Summary Government Needs to Set plans and objectives (TARGETS

FOR HABITAT/DISTURBANCE) Distinguish Protected Areas vs Working

lands Objectives Replace mitigation hierarchy with an

offsets market that prices avoidance

SUMMARY

Government needs to Establish Consistency between Departments and

Acts for how offsets will be used Equivalence - Methods, Metrics, requirements Infrastructure

Reduce uncertainties around transfer of liability Clarify responsibilities of Industry vs Government

Eliminate barriers to participation on public lands New dispositions for creating public values on public

lands

Thankyou