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No to Biodiversity Offsetting

The World Forum on Natural Capital started yesterday in Edinburgh, Scotland. It’s a large event, with 500 people from 35 countries taking part. Messages of support came from Nick Clegg MP and Prince Charles.

The meeting was organised by the Scottish Wildlife Trust, the United Nations Environment Programme; IUCN; World Business Council for Sustainable Development; TEEB for Business Coalition, and The Wildlife Trusts. But what on earth is Natural Capital? The Forum’s website describes it as follows:

Natural Capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things.

I may be mistaken, but that covers just about everything. Here’s the Forum’s website again:

Ultimately, nature is priceless. However it is not valueless and there are now many studies around the world which have tried to calculate Natural Capital in financial terms. So, for example it is calculated that avoiding greenhouse gas emissions by conserving global forests would be worth US$3.7 trillion, or that insect pollination is worth US$190 billion a year to global agricultural output.

While these are interesting figures and doubtless the calculations behind them are fascinating, this exercise of putting a price on nature has some perverse outcomes. Like biodiversity offsets, to give one example. According to the theory, if you destroy biodiversity in one place, but replace it somewhere else, there will be no net biodiversity loss. That’s the theory. Of course it doesn’t work – unless what you’re interested in is getting the go-ahead for large-scale, destructive projects.

The Brussels-based NGO FERN has produced a short report explaining the problems (available here).

FERN’s Hannah Mowat explains the problem:

“Offsetting treats nature such as forests or rivers as if it were an exchangeable item you buy in the supermarket. Destroying one forest or river with a promise of protecting another fails to recognise that they are part of a wider ecosystem and intrinsic to human and cultural landscapes. Destruction of complex and site specific biodiversity cannot be offset. It is time to be clear that offsetting will not tackle biodiversity loss but may impoverish communities.”

Biodiversity offsetting makes opposition to large-scale, destructive projects to all intents and purposes impossible. Opposition to coal mining, logging, large-scale hydropower, high-speed rail links, motorways, plantations or whatever can be brushed off by offering to protect forest, rivers or communities somewhere else.

Recently, FERN and Re-Common held a workshop in Brussels to discuss Biodiversity Offsetting. Here’s a report from someone who took part in the workshop:

From the ignoring of a referendum, with more than a 95% ‘NO’ to an open cast mine in Poland, through to military occupation of an area where locals are campaigning against a high speed rail link in Italy, it is obvious that any ‘bottom up’ policy with regards landscape issues is simply non existent. Local campaigners are simply regarded at best as NIMBY’s but frequently as terrorists…

A counter workshop and evening conference, organised by the World Development Movement, Re-Common, Counter Balance and Carbon Trade Watch, also took place in Edinburgh this week, in parallel with the World Forum on Natural Capital. The evening conference, “Forum on Natural Commons”, saw the launch of a statement opposing biodiversity offsetting, signed by 140 organisations from around the world.

The statement is posted below and is available here in Spanish, French, Italian, German, Finnish, and Romanian. The list of signatories is available here. If your organisation wants to sign on, please contact

“No to Biodiversity Offsetting!”

Around the world, ecosystems and the communities that depend on them are harmed by large infrastructure projects, extractive industries and new financial markets.[1] To facilitate these activities, public and private entities are promoting new schemes to allow their environmental impacts to be ‘offset’. This could lead to an increase in damage, but even more concerning is that it commodifies nature. This is why the undersigned organisations are warning the world of the negative impacts of this false solution and saying “No to Biodiversity Offsetting.”
Biodiversity offsetting is the promise to replace nature destroyed and lost in one place with nature somewhere else. As with the Clean Development Mechanism (CDM) and schemes to Reduce Emissions from Deforestation and Forest Degradation (REDD), biodiversity offsetting relies on ‘experts’ to create dubious calculations that claim to make one piece of the earth equal to another. It pretends you can trade places.
Who really benefits?
The introduction of biodiversity offsetting allows, or even encourages, environmental destruction with the promise that the habitat can be recreated elsewhere. This is beneficial to the companies doing the damage, since they can present themselves as a company that invests in environmental protection, thereby green-washing its products and services.
It also creates new business opportunities for intermediaries: conservation consultants to calculate what is lost, bankers to turn them into credits, traders to barter and speculate on them in new specialised markets and investors who want to profit from so called ‘natural capital’.“Natural capital” is an artificial concept based on questionable economic assumptions rather than ecological values. It only serves to permit the commodification of nature.
All of this is happening with the strong involvement of state governments who are creating public policies to ensure that property rights over elements of nature such as carbon or biodiversity can be transferred to corporations and banks.
Biodiversity offsetting won’t prevent biodiversity loss
Nature is unique and complex. It is impossible to fully measure biodiversity, so suggestions that equivalent natural areas can be found is a fallacy. Some ecosystems take hundreds, even thousands of years to reach their current state – yet biodiversity offsetting pretends that a replacement can be found. Extensive research shows this is impossible.[2]
Biodiversity offsetting will harm communities
Biodiversity offsetting means environmental protection becomes a mere by-product of a commercial project, marginalising communities and threatening their right to life. Nature has an important social, spiritual and sustenance role for local communities, who define their territories through a balanced and historical relationship with land and nature. These values cannot be measured, priced nor offset any more than communities can simply move and live elsewhere.[3]
Biodiversity offsetting attempts to separate people from the environment in which they live, where their culture is rooted, where their economic activities have been traditionally taking place.
Biodiversity offsetting could increase biodiversity loss
Past cases of biodiversity offsetting shows how it opens up natural resources to further exploitation, and undermines communities’ rights to be able to manage and protect the natural commons. Examples include:

  • The new Forest Code in Brazil which allows land-owners to destroy forests if they buy ‘certificates of environmental reserves’ which are issued by the state and traded on BVRio, the ‘green stock market’ recently established by the government of Brazil.
  • The planned EU legislation on biodiversity offsetting (the so called “No Net Loss Initiative”) which could undermine existing environmental directives.
  • Public finance institutions such as the World Bank, the International Finance Corporation (IFC, the World Bank private sector arm) and the European Investment Bank (EIB) are making biodiversity offsetting part of their standards and practices, permitting increased levels of offsetting to ‘compensate’ for the permanent environmental damage caused by the projects that they finance.
  • Destructive large infrastructure and extraction projects cannot be offset. Once an ecosystem is destroyed, it cannot be recreated elsewhere. In many places where biodiversity offsetting has been allowed, it has weakened existing laws to prevent destruction. If trading occurs (as it does with carbon offsetting), it paves the way for speculation by financial actors and private companies, threatening nature and the rights of communities dependent on it.

After seven years of carbon offsetting that has failed to reduce carbon emissions,[4] biodiversity offsetting should not be used to allow destruction that would have been illegal or contrary to local and national policy under environmental legislation or investment standards.
For these reasons, we reject any attempts to include biodiversity offsetting in any legislation, standards or public policies aimed at the creation of new markets with nature or ‘natural capital’ accounting.
Annex: some examples of Offsetting policies and projects

  1. The UK government is planning to introduce biodiversity offsetting (the consultation is open until 7 November 2013 – Initial offset cases show that the promise to ‘offset biodiversity’ is undermining planning laws that prevent destruction. Biodiversity offset providers are successfully interfering in the legislative process, undermining the democratic decision-making process and weakening the voice of communities.[5]
  2. Notre Dame des Landes, France: a proposed airport that has been in pipeline for the past 40 years, to be built on over 1000 hectares (ha) of wetland, where farmers have been maintaining a traditional landscape and maintaining biodiversity. Offsetting was required by French biodiversity and water laws. ‘Biotope’ engineered a new methodology based on ‘functions’ rather than ‘hectares’, proposing that Vinci, the airport developer, offset only 600 ha. Local resistance against offsetting has so far prevented the project and challenged the proposed offsetting scheme. The European Commission is now intervening.
  3. EU Biodiversity strategy 2020 – the EU is considering the possibility of legislation on biodiversity offsetting, which could include a “habitat bank” to permit offsetting species and habitats across EU borders. The aim is for no net loss of biodiversity, an important difference to the previous aim of no loss.
  4. The World Bank has financed the large Weda Bay nickel and cobalt mining project in Indonesia.[6] It is operated by the French mining company Eramet. The company is part of the BBOP (Business and Biodiversity Offsets Program).The project has already received a guarantee from MIGA (the World Bank arm covering the guarantee of economic and political risk of investors), and is supposed to receive new financing from the World Bank, the Asian Development Bank, the Japan Bank for International Cooperation (JPIC), Coface and French Development Agency (AFD) for offsetting programme. The impacts on people and territories are massive and they are opposed by Indonesian and international civil society.

[1] Mining, energy, industrial logging, monoculture plantation and transport mega-projects are leading to increased land expropriation and land-use change, including the conversion of forests into industrial-scale agriculture. At the same time, in the name of energy security, large-scale efforts are underway to increase the extraction of conventional and unconventional fossil fuels, such as tar sands and shale gas.
[3] The disproportional and unjust burden of false solutions/offsettings to the most vulnerable communities, that are not responsible for environmental destruction, and whose livelihoods are directly dependent on a healthy environment and on the possibility to interact with it.
[6] See briefing by Les Amis de la Terre here.


PHOTO Credit: Jon Lander, Nature not for Sale.

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  1. There is significant evidence that offsetting is indeed a bonus – for the developers! Not only do they get to go ahead with projects that would have taken longer to go through the planning system (which is meant to be a democratic process, hence the time it takes!) or would not have been accepted at all, but they also get to greenwash their image by saying they have restored another site. This is one of the reasons it acts as an incentive to build: because in many people’s minds, ‘offsetting’ means no damage has been done. This has real implications for how laws are applied, creating shades of grey about what is an is not allowed. But this psychological shift – i.e. that offsets neutralise the impact of development – is also an important one, since all laws are applied in a social, economic and political context. All of this points towards the fact that it could lead to more development, and development in previously protected places (please do get in touch if you would like sources for this or more information:

    With regards your second point, which is essentially, that it is better than nothing – Margaret Thatcher said something very similar when she said ‘there is no alternative’ (see There is always an alternative: it requires thinking about things in a different way. For all the reasons given above – hijacking of the democratic process of land use decision making, increased development, weakening laws – as well as the fact that offsetting has very poor results, we can safely say that “it is worse than nothing”.

    Not that it is ‘nothing’ that we want – of course we should all always be striving for better implementation of laws, better laws etc. but sometimes, it is important to admit that not all ‘solutions’ are real solutions – sometimes they take us far in the wrong direction – hence why many call them ‘false solutions’.

    FERN very much welcomes discussion on these points!

  2. Thanks for this update, Chris. I tried to get a report on the Natural Capital conference from Jubilee Scotland and Quakers, but this is the first I’ve seen. Will pass on to my networks in N Am.