Cost shifting and other perverse incentives in biodiversity offsetting in India

Biodiversity offsetting aims to compensate for development‐induced biodiversity loss through commensurate conservation gains and is gaining traction among governments and businesses. However, cost shifting (i.e., diversion of offset funds to other conservation programs) and other perverse incentives can undermine the effectiveness of biodiversity offsetting. Additionality—the requirement that biodiversity offsets result in conservation outcomes that would not have been achieved otherwise—is fundamental to biodiversity offsetting. Cost shifting and violation of additionality can go hand in hand. India's national offsetting program is a case in point. Recent legislation allows the diversion of offset funds to meet the country's preexisting commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Convention on Biological Diversity (CBD). With such diversions, no additional conservation takes place and development impacts remain uncompensated. Temporary additionality cannot be conceded in light of paucity of funds for preexisting commitments unless there is open acknowledgement that fulfillment of such commitments is contingent on offset funds. Two other examples of perverse incentives related to offsetting in India are the touting of inherently neutral offsetting outcomes as conservation gains, a tactic that breeds false complacency and results in reduced incentive for additional conservation efforts, and the clearing of native vegetation for commercial plantations in the name of compensatory afforestation, a practice that leads to biodiversity decline. The risks accompanying cost shifting and other perverse incentives, if not preempted and addressed, will result in net loss of forest cover in India. We recommend accurate baselines, transparent accounting, and open reporting of offset outcomes to ensure biodiversity offsetting achieves adequate and additional compensation for impacts of development.     

Offsetting the Impacts of Mining to Achieve No Net Loss of Native Vegetation

Offsets are a novel conservation tool, yet using them to achieve no net loss of biodiversity is challenging. This is especially true when using conservation offsets (i.e., protected areas) because achieving no net loss requires avoiding equivalent loss. Our objective was to determine if offsetting the impacts of mining achieves no net loss of native vegetation in Brazil's largest iron mining region. We used a land‐use change model to simulate deforestation by mining to 2020; developed a model to allocate conservation offsets to the landscape under 3 scenarios (baseline, no new offsets; current practice, like‐for‐like [by vegetation type] conservation offsetting near the impact site; and threat scenario, like‐for‐like conservation offsetting of highly threatened vegetation); and simulated nonmining deforestation to 2020 for each scenario to quantify avoided deforestation achieved with offsets. Mines cleared 3570 ha of native vegetation by 2020. Under a 1:4 offset ratio, mining companies would be required to conserve >14,200 ha of native vegetation, doubling the current extent of protected areas in the region. Allocating offsets under current practice avoided deforestation equivalent to 3% of that caused by mining, whereas allocating under the threat scenario avoided 9%. Current practice failed to achieve no net loss because offsets did not conserve threatened vegetation. Explicit allocation of offsets to threatened vegetation also failed because the most threatened vegetation was widely dispersed across the landscape, making conservation logistically difficult. To achieve no net loss with conservation offsets requires information on regional deforestation trajectories and the distribution of threatened vegetation. However, in some regions achieving no net loss through conservation may be impossible. In these cases, other offsetting activities, such as revegetation, will be required. Compensación de los Impactos de la Minería para Obtener Ninguna Pérdida Neta de la Vegetación Nativa