Locking in loss: Baselines of decline in Australian biodiversity offset policies

Biodiversity offset trades usually aim to achieve ‘no net loss’ of biodiversity. But the question remains: no net loss compared to what? Determining whether an offset can compensate for a given impact requires assumptions about the counterfactual scenario—that which would have happened without the offset—against which the gain at an offset site can be estimated. Where this counterfactual scenario, or ‘crediting baseline’, assumes a future trajectory of biodiversity decline, the intended net outcome of the offset trade is maintenance of that declining trajectory. If the rate of decline of the crediting baseline is implausibly steep, biodiversity offset trades can exacerbate biodiversity decline. We examined crediting baselines used in offset policies across Australia, and compared them with recent estimates of decline in woody vegetation extent. All jurisdictions permitted offset credit generated using averted loss—implying an assumption of background decline—but few were explicit about their crediting baseline. The credit calculation approaches implied assumed crediting baselines of up to 4.2% loss (of vegetation extent and/or condition) per annum; on average, the crediting baselines were >5 times steeper than recent rates of vegetation loss. For these crediting baselines to be plausible, declines in vegetation condition must be rapid, but this was not reflected in the approaches for which assumptions about decline in extent and condition could be separated. We conclude that crediting baselines in Australian offset schemes risk exacerbating biodiversity loss. The near-ubiquitous use of declining crediting baselines risks ‘locking in’ biodiversity decline across impact and offset sites, with implications for biodiversity conservation more broadly.