Biodiversity Offsets: Some Insights and Lessons - Katia Karousakis As part of the Ecological Compensation side-event at CBD COP 14, Sharm El Sheikh, November 2018

1. BIODIVERSITY OFFSETS:
SOME INSIGHTS AND LESSONS
Katia Karousakis
Biodiversity Team Leader
OECD Environment Directorate
Ecological Compensation side-event
21 November, 2018
CBD COP14,

2. • Context: When
biodiversity offsets
are appropriate
policy instrument
• Key design features
to consider
• Potential pitfalls to
avoid
• Lessons and key
messages
Overview

3. Regulatory approaches
(command & control)
Economic instruments Information and
voluntary approaches
Restrictions or prohibitions
on use
Price-based instruments
- taxes, charges/fees
- subsidies
Eco-labelling & certification
Access restrictions or
prohibitions
(e.g. protected areas)
Reform of environmentally
harmful subsidies
Green public procurement
Permits & quotas
(e.g. logging/fishing)
Payments for Ecosystem
Services
Voluntary approaches
(negotiated agreements)
Quality, quantity, and
design standards
Biodiversity
offsets/biobanking
Corporate environmental
accounting
Spatial planning Tradable permits (e.g. ITQs
for fisheries)
Liability instruments
Policy instruments for biodiversity
conservation and sustainable use
Source: OECD (2013) Scaling Up Finance Mechanisms for Biodiversity

4. Policy
instrument
Finance mobilised
(Handle with care - complete data not available!)
Environment-
related taxes
(including
biodiversity)
Total revenue from environmentally-related taxes in OECD countries:
more than USD 700 billion
> Total revenue from biodiversity-related taxes = USD 7.4 billion
(OECD countries)
Payments for
Ecosystem
Services
More than USD 10 billion from 10 large PES programmes (e.g. China, USA,
Australia, Mexico, Costa Rica)
…More than 300 PES programmes worldwide
Biodiversity
offsets
USD 4.8 billion in 2016 (Genevieve et al, 2017)
~ 45 programmes worldwide
Compared to…
Biodiversity in
international
development
finance
Bilateral biodiversity-related ODA estimated at USD 7.9 billion per
year over 2015-2016
4
Also useful as a means to generate revenue…
Source: OECD (2018), “Tracking Economic Instruments and Finance for Biodiversity”.

5. • Sectors: Mining, wind power, pulp and
paper, hydropower, oil & gas, property
development, infrastructure, agriculture,
forestry
– Relevant to mainstreaming biodiversity
• Ecosystems: wetlands (e.g. US & Canada),
streams, fish habitat (Canada & Queensland,
Australia), native vegetation (Victoria, Australia),
forests (India, Mexico, & Brazil), and others…
Sectors and ecosystems where
biodiversity offsets have been applied
Source: OECD (2016), Biodiversity Offsets: Effective Design and Implementation

6. • Individual capacity
– Experts to select and apply metrics and indicators
to compare expected losses and gains
• Organisation capacity
– Market support services (e.g. assurance, public
registries, brokerage etc.)
• Enabling conditions
– Laws requiring developers to compensate for
their environmental damages
Capacity needs for effective biodiversity
offsets
Source: Chapter 9 “Comparing across the mechanism” in OECD (2013) Scaling Up Finance Mechanisms for Biodiversity

7. • Equivalence and offset replacement ratios
• Type (one-off offset, payment-in-lieu, biobanking)
• Location of the offset
• Additionality and leakage
• Timing and permanence
• Transaction costs
• Monitoring, reporting and verification
• Compliance and enforcement
• Stakeholder participation and distributional
issues
Design and implementation features
Source: OECD (2016), Biodiversity Offsets: Effective Design and Implementation

8. • Clearly define goals and objectives of the offset
programme
• Check that good metrics and indicators for biodiversity
are relatively easy to identify and construct
• Biodiversity and ecosystems service benefits are not
exceptionally high, irreplaceable or vulnerable
 Clearly define the limits to what can be offset
• There are available offset sites and known conservation
approaches to achieve the desirable offset outcomes
• Ensure adequate monitoring and reporting is feasible
(using indicators and to assess progress towards
objectives)
Factors to consider prior to introducing
biodiversity offsets (pitfalls to avoid)

9. • Define thresholds
• Provide clear guidance on the mitigation heirarchy
• Monitoring and reporting
– Online databases (e.g. national registry in USA: RIBITS and
Germany: NATUREG)
• Regular programme evaluation
– internal and external
 Start with pilot programmes; test, review, adapt; then scale-up
Examples of key messages and good
practice insights

10. New: OECD 2018 brochure on
“Tracking Economic Instruments and Finance for Biodiversity”
• OECD (2018), Mainstreaming Biodiversity for Sustainable Development
• OECD (2017), The Political Economy of Biodiversity Policy Reform
• OECD (2016), Biodiversity Offsets: Effective Design and Implementation
• OECD (2013), Scaling Up Finance Mechanisms for Biodiversity
• OECD (201o), Paying for Biodiversity: Enhancing the Cost Effectiveness of
Payments for Ecosystem Services
For more information, contact: katia.karousakis@oecd.org
Visit: http://www.oecd.org/environment/resources/biodiversity.htm
http://www.oecd.org/environment/resources/mainstream-biodiversity/
Relevant OECD work