Improving averted loss estimates for better biodiversity outcomes from offset exchanges

Biodiversity offsetting aims to achieve at least ‘no net loss’ of biodiversity by fully compensating for residual development-induced biodiversity losses after the mitigation hierarchy (avoid, minimise, remediate) has been applied. Actions used to generate offsets can include securing protection, maintaining condition, or enhancing condition of targeted biodiversity at an offset site. Protection and maintenance actions aim to prevent future loss of biodiversity, so such offsets are referred to as ‘averted loss’ offsets. However, the benefits of such approaches can be highly uncertain and opaque, because assumptions about the change in likelihood of loss due to the offset are often implicit. As a result, the gain generated by averting losses can be intentionally or inadvertently overestimated, leading to offset outcomes that are insufficient for achieving no net loss of biodiversity. We present a method and decision tree to guide consistent and credible estimation of the likelihood of loss of a proposed offset site with and without protection, for use when calculating the amount of benefit associated with the ‘protection’ component of averted loss offsets. In circumstances such as when a jurisdictional offset policy applies to most impacts, plausible estimates of averted loss can be very low. Averting further loss of biodiversity is desirable, and averted loss offsets can be a valid approach for generating tangible gains. However, overestimation of averted loss benefits poses a major risk to biodiversity.