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Socio-economic aspects of biodiversity offsets

Socio-economic aspects of biodiversity offsets. Joshua Bishop IUCN-The World Conservation Union. 29 September 2006 Pretoria, RSA. Ecological sustainability “no net loss” → “net positive impact” Economic efficiency cost effectiveness → sustainable production Social equity

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Socio-economic aspects of biodiversity offsets

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  1. Socio-economic aspects of biodiversity offsets Joshua Bishop IUCN-The World Conservation Union 29 September 2006 Pretoria, RSA

  2. Ecological sustainability “no net loss” → “net positive impact” Economic efficiency cost effectiveness → sustainable production Social equity no harm to the poor → poverty reduction Biodiversity offsets andsustainable development

  3. Information and analysis Decision-making processes Financing mechanisms Improving the socio-economic sustainability of biodiversity offsets

  4. Institutional context Demographic trends (e.g. migration) Regulatory framework (offset requirements; rights to trade offsets) Resource ownership, access, use and control Direct and underlying threats to biodiversity Capacity of NGOs, CBOs, government, etc Assessment of values Net benefits of resource uses (= opportunity costs of an offset) Financial costs of creating an offset (land purchase, environmental enhancement, validation, management in perpetuity) Non-market benefits of benchmark, impact and offset sites Social impact analysis Costs and benefits of impact AND offset to vulnerable groups (e.g. landless and female-headed households, children) 1. Socio-economic information and analysis for biodiversity offsets

  5. Participation Consultation Local involvement Local initiation and control Distant stakeholders (regional, national, global) Transparency Who provides what information when, how and to whom? Credibility What institutions are trusted to assess impacts, to design, validate and implement sustainable offsets? 2. Decision making processesfor biodiversity offsets

  6. Sufficiency Long-term funding (duration of impact) Autonomy Independence from expropriation (trust funds) Risk management Insuring against failure or non-performance (over-compensation, performance bonds) 3. Financing mechanismsfor biodiversity offsets

  7. Biodiversity and human well-being

  8. Qualitative methods Expert opinion Focus groups Participatory assessment Quantitative methods Market values (surveys, cost models) Non-market values (revealed preference, stated preference, dose-response function) Benefits transfer (“fit” data from elsewhere) Macroeconomic models (for indirect impacts) Assessing biodiversity values

  9. Participatory assessment • Wealth ranking • Calendars of activities (livelihood and forestry) • Map of forest product flows • Ranking and scoring of livelihood benefits • Ranking and scoring of forest benefits • Discussion of costs or disadvantages of conservation • Key informant calculations • Barter game to establish values of non-marketed products • PRA sustainability of stock and product flows exercise • Feedback by research team Source: Richards M., Kanel K., Maharjan M. & Davies J. 1999. Towards Participatory Economic Analysis By Forest User Groups In Nepal. Overseas Development Institute in collaboration with the Nepal-UK Community Forestry Project (June).

  10. Market Valuation Techniques Non-market Valuation Techniques Behavioural Linkages Physical Linkages Dose-response Functions Revealed Preference Stated Preference Change in Outputs (productivity) Hedonic Property Analysis Contingent Valuation Method Conjoint Analysis (choice models) Change in Inputs (resource costs) Hedonic Wage-risk Analysis Cost-of-illness Travel Cost Method Replacement Cost Preventative Expenditure Benefit Transfer

  11. Costs and benefits of reforestation at selected sites in Coastal Croatia World Bank, 1996. “Croatia Coastal Forest Reconstruction and Protection Project: Staff Appraisal Report.” Report No.15518-HR. Washington: World Bank

  12. Atlantic forests of E. Paraguay Adapted from: Naidoo R, Ricketts TH (2006) Mapping the Economic Costs and Benefits of Conservation. PLoS Biol 4(11): e360 Mbaracayu Forest Biosphere Reserve Indigenous Reserve Agricultural uses: • smallholder agriculture (12%) • large-scale cattle ranching (14%) • soybean production (2.4%) B<C ($/ha) Benefit-cost ratios of corridor options: 1) 0.22 2) 0.27 3) 0.76 Ecosystem services valued: • Sustainable bushmeat harvest • Sustainable timber harvest • Bioprospecting B>C ($/ha)

  13. Social distribution of biodiversity benefits (impact and offset sites)

  14. Distribution of the costs and benefits of Madagascar’s protected areas Carret, J.-C., and D. Loyer. 2003. “Comment financer durablement le réseau d’aires protégées terrestres á Madagascar? Apport de l’analyse économique.” Paris: AFD and World Bank

  15. What are the roles of different stakeholders to ensure the sustainability of offsets? How to ensure equitable decision-making and sharing of costs and benefits over the very long-term? How to avoid ‘leakage’ i.e. the transfer of damaging activities to other locations? How to quantify the indirect impacts of a project and offset (e.g. migration, product use)? Should developers be liable for indirect impacts, and to what extent? Questions for discussion

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