A balancing act: Getting to grips with biodiversity offsetting and mitigation banking

30 October 2019

Population growth and urbanisation continue to place significant pressure on the environment. In response to this challenge, many jurisdictions around the world are exploring the use of biodiversity offsetting and mitigation banking to mitigate the impact of development.

With the increasing popularity of these methodologies, itís important that developers keep abreast of the trends and ensure they understand how these processes work in order to achieve the best outcomes for project stakeholders, as well as the environment.

As a starting point, itís worth providing some broad definitions and comparison of biodiversity offsetting and mitigation banking.

Biodiversity offsetting

Biodiversity offsetting is the provision of environmental offsets that can be used to counterbalance any unavoidable loss of environmental values associated with an activity or development.

This could include measures that improve existing habitats, create new habitats, reduce threats to flora and fauna or avert the risk of loss. Key principles that are typically considered in developing these measures are the concepts of Ďlike for likeí, timeliness, security, longevity and offset ratios.

In most cases conservation of an offset site is calculated using prescribed methodologies. In Australia some of the best known methodologies are:

In Australia, there are often critical differences between the calculation methods and trading rules of different biodiversity offset policies. An offset site may deliver the required quantum of offset in one jurisdiction but then fall short when another approval process is applied. This can lead to costly delays to project approvals and significant additional effort to meet offset shortfalls. An example that applies to many projects in NSW is that a payment to the Biodiversity Conservation Trust can be used to meet the offset requirement for state approvals but is not allowed under the Commonwealth EPBC Act environmental offset policy.

Mitigation banking

Another approach that can achieve similar benefits for conservation is mitigation banking. This is becoming popular in the United States, where some federal agencies, as well as many state and local governments, require mitigation for the disturbance or destruction of wetland, stream, or endangered species habitat. Once approved by regulatory agencies, a mitigation bank may sell credits to developers whose projects will impact these various ecosystems. The financial value of credits is market driven and varies by region; for example in urban areas credits are more expensive while in rural areas they tend to be less expensive.

Mitigation banks provide benefits in three ways: the sponsor benefits financially from selling credits, companies benefit as they can buy credits and move on to complete their project, and the ecosystem benefits, with large areas of habitat created or restored and protected in perpetuity.

Throughout the United States, several state and federal agencies have adopted their own methods to determine how many mitigation credits are necessary to offset impacts. Some of these methodologies are:

Case studies

For both biodiversity offsetting and mitigation banking, the variety of options and complexity of the legislation will usually require careful navigation ahead of any submission to participate in the process.

There are an increasing number of case studies from around the world that illustrate how mitigation banking and biodiversity offsetting work.

For example, the proposed Arnold Creek Stream and Wetland Mitigation Bank, a 2000-acre (809 hectare) site in north Texas near Dallas, will provide wetland and stream credits for projects that result in permanent, adverse impacts to wetlands and streams. Stream credits are a recent trend in United States mitigation banking, with supply currently low and demand high and rising, as a result the cost of stream credits are more expensive than traditional wetlands credits. For this project, GHD delivered field delineations of streams and wetlands for USACE Fort Worth District jurisdictional approval. Each USACE district has their own methods for evaluating wetland and stream quality that have been developed specifically to suit the natural history of that region. In some regions, streams may have greater regulatory protection than wetlands, in other regions, wetlands have greater protection.

In Australia, the Western Sydney International (Nancy-Bird Walton) Airport is being developed on approximately 1780 hectares (4398 acres) of government land at Badgerys Creek, NSW. Direct biodiversity offsets and supplementary measures must be implemented by the Commonwealth to offset the biodiversity impacts of the airport. GHD successfully prepared a Biodiversity Offset Delivery Plan and helped avoid delays to the start of construction. GHD is working to implement the plan and ensure the conservation of more than 1000 hectares (2471 acres) of woodland and other biodiversity values to offset the impacts of the airport. GHD will also implement research and conservation programs that will assist with the recovery of threatened plant populations in Western Sydney.

Keeping up with changes

Over the last decade, biodiversity offsetting has become a more prominent part of the environmental assessment and approval process in Australia. This period has seen the development of market-based schemes and common units of measurement, along with new opportunities for landowners to act as offset vendors. Over the last two years, further changes to legislation and offset calculation methodologies have brought in changes that developers, offset vendors and technical service providers, like GHD, have to respond to as the sector evolves.

Initially, wetland mitigation was the primary focus in the United States, but in recent years stream mitigation has grown exponentially. In some states, species banking has developed to protect habitats for federally-listed threatened and endangered species. Ecological methods have developed rapidly over the last decade to provide a more robust evaluation of wetland quality. These methods improve on previous standards of subjectively evaluating wetlands on a spectrum of low, medium or high quality, and now take an approach that considers biological, chemical and physical characteristics. Rather than evaluating a wetland as an island with no other contributing factors surrounding it, we now look at the wetland in the context of its location, surroundings and potential threats to its integrity.

Maximising the benefits

With an increasingly strict policy environment, complex methodologies and rigorous technical approval requirements, many organisations in Australia and the United States are turning to biodiversity specialists to help navigate the offsetting process and solve associated challenges. When doing so, itís important to move early; one of the primary ways of maximising any potential benefits of the process is to establish early awareness and understanding of the offsetting or mitigation requirements to ensure assessments and approvals run smoothly and avoid construction delays. While a project is underway, it is important for organisations to communicate any project changes so that biodiversity specialists can adapt and provide guidance as necessary. Further, biodiversity specialists may also have scope to help explore all the options for a project, and help avoid impacts Ė reducing the risks and costs associated with securing offsets. 




Source:  GHD - www.ghd.com

Contact:  N/A

External Links: 

NSW Biodiversity Assessment Method (BAM), https://www.environment.nsw.gov.au/biodiversity/assessmentmethod.htm

Victorian Habitat Hectares, https://www.environment.vic.gov.au/native-vegetation/native-vegetation/biodiversity-information-and-site-assessment

Commonwealth EPBC Act environmental offset policy, https://www.environment.gov.au/epbc/publications/epbc-act-environmental-offsets-policy

Biodiversity Conservation Trust, https://www.bct.nsw.gov.au/

Hydrogeomorphic Approach, https://www.erdc.usace.army.mil/Media/Fact-Sheets/Fact-Sheet-Article-View/Article/476738/hydrogeomorphic-approach/

Texas Rapid Assessment Method (TXRAM), https://www.swf.usace.army.mil/Portals/47/docs/regulatory/Permitting/Submittal Forms/TXRAM_Wetlands_and_Streams_Modules_Version_2.0_Final.pdf

California Rapid Assessment Method (CRAM), https://www.cramwetlands.org/ 

Recent news by:  GHD