Improving averted loss estimates 395
area, and thus ‘likelihood of loss’ refers to the probability of the complete loss of an area of biodiversity at some point in the future rather than degradation of its condition, unless explicitly stated. Nevertheless, a similar logic could also be adapted to estimate averted loss of condition. We conclude by describing some limitations of our approach and make recommendations for future research.
Accounting for likelihood of loss in international offset policies and projects
Any offset policy that allows offset benefits to be generated from protection of existing biodiversity assumes future biodiversity decline, in the presence or absence of the offset (Maron et al., 2015, 2018). These assumptions are frequently implicit and are sometimes captured in so-called multipliers (Bull et al., 2017). However, this can be problematic when the magnitude of the multiplier stipulated by offset policies implies implausibly high background rates of loss (Maron et al., 2015) or fails to account for factors such as time lags and uncertainty (Miller et al., 2015). Awide range of approaches is currently used (with varying
degrees of rigour) to estimate likelihood of loss under bio- diversity offset policies and projects internationally (Table 2). Many biodiversity offset and related policies with no net loss goals assume ongoing background loss and thus allow gains to be generated by averting some of this loss (Maron et al., 2018), yet the rate of the assumed decline is often not expli- citly described (Maron et al., 2013, 2015; Table 2). For offset projects that elucidate their assumptions about
the background rate of biodiversity loss, various methods may be used to derive these estimates including expert judgement, empirical data, or a combination. The offset pro- posal for the Rio Tinto QIT Madagascar Minerals ilmenite mine in the Anosy Region, Madagascar (Table 2) provides an illustrative example, wherein defensible future scenarios were informed by recent rates of biodiversity loss in the region, to evaluate the benefit of the offset actions (Temple et al., 2012). Another example is the offset strategy proposed for the Rio Tinto Oyu Tolgoi copper mine in the Southern Gobi Region, Mongolia, which included offset actions to reduce illegal hunting, improve rangeland management, strengthen protection and management of current protected areas, and improve the long-term security of tenure within the offset landscape (The Biodiversity Consultancy&Fauna &Flora International, 2012). In this offset strategy, strength- ening tenure was proposed as amechanism to prevent both loss of area (complete conversion of a site) and condition, and the amount of loss averted was based on expert judge- ment of anticipated future loss in the absence of protection. Decision support tools and calculators can also be used to
specify background rates of loss and estimate the amount of loss averted through protection actions on a case-by-case
basis. For example, the guide used to calculate offset require- ments under the Australian environmental offsets policy (Miller et al., 2015;Australian Government, 2018) explicitly requires a user-input estimation of the likelihood of loss (the risk-of-loss score),which is used to calculate the amount of loss averted through protection of the proposed offset site (Table 2). The Offsets Assessment Guide is applied on a project-by-project basis, but the risk of loss score is not dic- tated nor is a specificmethod prescribed for deriving it. This has resulted in inconsistencies in determining the offset actions required to counterbalance a given impact (Maseyk et al., 2017). In contrast, the biodiversity offset accounting system developed for the New Zealand Department of Con- servation (Maseyk et al., 2016), which is a decision support tool independent of policy, explicitly adopts a static baseline, such that no biodiversity gain can be generated by averting future loss. This approach was adopted in recognition of the difficulty in making accurate predictions about future loss, and the high cost for biodiversity if these estimates are arti- ficially inflated, but does not account for the benefits of protection where a genuine threat is averted. Using a static baseline is also a common approach in other jurisdictions, for example within the EU (Wende et al., 2018). We suggest that the potential for overestimating averted
loss, and thus the gain derived from securing protection of biodiversity area, is elevated when methods used to estimate likelihood of loss values are opaque, arbitrary, subject to bias, perception-based, and/or are inconsistent with juris- dictional offset requirements.
Estimating gains from averted loss offsets
Evaluating the amount of biodiversity benefit that is at- tributable to a specific action is critical for determining the amount of gain generated (Ferraro & Pattanayak, 2006; Ferraro, 2009; Gibbons et al., 2016). This evaluation requires the description of two future scenarios: (1) the estimated biodiversity values at a specified time horizon after the ac- tion has been implemented (the with action scenario), and (2) the estimated biodiversity values in the absence of the action occurring (the without action scenario, also referred to as the counterfactual). The difference between the two scenarios determines the amount of biodiversity gain at- tributable to the specific offset action (Maron et al., 2013; Miller et al., 2015; Gibbons et al., 2016). When evaluating biodiversity offset proposals, it is critical that the size of the biodiversity gain resulting from an offset action is estimated based on plausible assumptions. Not achieving anticipated goals can be disappointing for any biodiversity project, but when the actions are tied to a goal of no net loss, any failures or shortfalls are potentially disastrous for biodiver- sity outcomes, as losses that have already occurred remain uncompensated and unaccounted for. The result of the
Oryx, 2021, 55(3), 393–403 © The Author(s), 2020. Published by Cambridge University Press on behalf of Fauna & Flora International doi:10.1017/S0030605319000528
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