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Keywords:

  • compensatory habitat;
  • land clearing;
  • mitigation banks;
  • offsets;
  • policy;
  • regulation

Abstract

  1. Top of page
  2. Abstract
  3. Introduction
  4. Limitations of offsets
  5. The circumstances in which offsets can be consistent with no net loss
  6. Conclusions
  7. Acknowledgements
  8. References

Summary  Offsets (also known as mitigation banks, compensatory habitat, set-asides) is a policy instrument recently introduced in several States in Australia to permit some land clearing while striving for no net loss in the extent and condition of native vegetation overall. Offsetting is criticized with respect to the amount of gain required to compensate for losses from clearing, the equivalence of losses and gains, the time lag between losses and gains and a poor record of compliance. Despite these criticisms, we conclude that offsetting is a useful policy instrument while governments continue to permit some clearing of native vegetation. However, offsets will only contribute to no net loss if (i) clearing is restricted to vegetation that is simplified enough so that its functions can be restored elsewhere with confidence or clearing is restricted to vegetation that is unlikely to persist and is not practicable to restore irrespective of clearing; (ii) any temporary loss in habitat between clearing and the maturation of an offset, or differences between the habitat lost from clearing and gained through an offset, does not represent significant risk to a species, population or ecosystem process; (iii) there will be gains of sufficient magnitude on the offset site to compensate for losses from clearing; (iv) best practice adaptive management is applied to offsets; (v) offsets are in place for at least the same duration as the impacts from clearing; and (vi) there is adequate compliance. Land clearing with offsets outside these parameters is inconsistent with ‘no net loss’.


Introduction

  1. Top of page
  2. Abstract
  3. Introduction
  4. Limitations of offsets
  5. The circumstances in which offsets can be consistent with no net loss
  6. Conclusions
  7. Acknowledgements
  8. References

Land clearing remains the single greatest threat to terrestrial biodiversity in Australia (Australian State of the Environment Committee 2001). Land clearing impacts on ecosystems by (i) killing biota and removing habitat (Cogger et al. 2003); (ii) fragmenting populations and thus undermining their long-term viability (Bennett 1999); (iii) destabilizing ecological processes (e.g. water quality, insect control, carbon emission) (Millennium Ecosystem Assessment 2005); and (iv) reducing the resilience of ecosystems (e.g. to climate change) (Walker & Salt 2006). Statistics available at the time of writing indicate that the rate of land clearing in Australia has not declined since 1995 (Box 1).

Land clearing has historically been difficult to curtail in Australia because it has helped facilitate human population and productivity growth – which are the main drivers of economic growth in Australia (Australian Greenhouse Office 2000; Australian State of the Environment Committee 2001). However, the link between land clearing and economic growth in the agricultural sector – the source of most clearing in Australia – is becoming increasingly decoupled. Green et al. (2005) showed that an approximate doubling in agricultural production from 1960 to 2000 in developed countries occurred while the area under production slightly declined. Gains in production over this period were instead facilitated by technologies such as breeding, fertilizers, irrigation and insecticides and the more efficient application of these. Furthermore, there has been increasing acknowledgement of negative associations between land clearing and the ecosystem services that help sustain agricultural productivity (Wentworth Group of Concerned Scientists 2003; Millennium Ecosystem Assessment 2005) and the predicted costs of ecological restoration in Australia now exceed the financial benefits of further broad-scale clearing (Morton et al. 2002).

Arguments such as these have led several State governments and the Commonwealth government of Australia to introduce policies to prevent further losses in the extent and condition of native vegetation. As early as 1991 the Native Vegetation Act in South Australia aimed to prevent further losses in the quantity and quality of native vegetation. At the Commonwealth level, the aim was that ‘by 2001 all jurisdictions have clearing controls in place that will have the effect of reducing the national net rate of land clearance to zero’ (Environment Australia 2001). The main objective of Victoria's Native Vegetation Framework is to achieve a net gain in the extent and quality of native vegetation (Department of Natural Resources and Environment 2002). In 2003, the New South Wales Government (2006) introduced legislation that allowed clearing only if it improves or maintains environmental outcomes.

Despite an objective of no net loss, no State in Australia has placed a ban on land clearing. Prominent policy advisors such as Morton et al. (2002) and the Wentworth Group of Concerned Scientists (2003) recommended an end to broad-scale clearing, but stopped short of recommending an end to all clearing. Morton et al. (2002) suggested that clearing should be limited to instances where regional biodiversity and hydrology are not compromised. The Wentworth Group of Concerned Scientists (2003) recommended that clearing should be permitted in limited circumstances, such as the construction of a dwelling, young regrowth, to reduce bushfire hazard, for routine farm activities such as collecting firewood for personal use and where there are gains for productivity and conservation.

Although continued debate on the need for and sustainability of continued clearing of native vegetation is important, there is also a need to develop strategies that are consistent with an existing policy of some land clearing. Offsetting (also known as set-asides, compensatory habitat, mitigation banks) is a policy instrument used to permit some continued clearing within an overall no net loss or net-gain objective. Offsetting is based on the assumption that impacts from clearing can be offset if sufficient habitat can be protected, enhanced and/or established elsewhere. Offsetting is used widely by government organizations and the private sector globally (ten Kate et al. 2004). Formal adoption of offsetting policies in South Australia (Cutten & Hodder 2002), Victoria (Department of Natural Resources and Environment 2002) and New South Wales (Department of Environment and Conservation (NSW) 2005; New South Wales Government 2006) has precipitated considerable debate about the approach (e.g. a debate was broadcast on ABC Radio National from the 2005 Ecological Society of Australia conference). In this paper, we examine whether the use of offsets is consistent with the objective of no net loss.

Limitations of offsets

  1. Top of page
  2. Abstract
  3. Introduction
  4. Limitations of offsets
  5. The circumstances in which offsets can be consistent with no net loss
  6. Conclusions
  7. Acknowledgements
  8. References

The main limitations of offsets with respect to their ability to contribute to no net loss relate the amount of gain that can be achieved relative to the loss from clearing, the equivalency of this gain, the time lag between the loss and gain, and adequate compliance. We discuss each of these in turn.

In order to achieve no net loss, offsets must result in gains that compensate for losses from clearing. However, some offset arrangements are based on a simple trade between the area cleared and an area of existing native vegetation, thus resulting in no real gain (Carruthers & Paton 2005). Offset schemes that do not require sites to be improved commensurate with losses from clearing, that are based on protecting sites that have no capacity for improvement, or that are based on sites under no threat of decline, will result in losses of native vegetation equivalent to the area cleared (Fig. 2).

image

Figure 2. An illustration of a simple offset strategy in which an area can be cleared provided an equivalent area of existing vegetation is set aside as an offset. In the absence of any gains on the offset site, this strategy will lead to a net loss equivalent to the area cleared.

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Even where an offset provides gains to compensate for losses from clearing, the approach has been criticized because these gains are not equivalent to the losses (e.g. Hilderbrand et al. 2005). Offset policies typically permit new vegetation to be planted to compensate for the losses from clearing. Although planted vegetation can have major benefits for ecosystems (Salt et al. 2004), it does not perform the same role as native vegetation. Wilkins et al. (2003) found that plantings up to 9 years old established to restore a natural ecosystem remained floristically distinct from relatively unmodified examples of the original community. Cunningham et al. (in press) found that planted vegetation up to >20 years old, and landscapes with planted vegetation, were inferior habitat for native mammals and reptiles compared with remnant native vegetation. Because plantings are not always an adequate substitute for natural ecosystems, one principle of ecological restoration is that priority be given to securing, improving, and building upon existing remnant native vegetation before planting new vegetation (e.g. McIntyre et al. 2002). In deference to this principle some offset policies encourage improvements to existing native vegetation (e.g. encouraging natural regeneration) rather than planting new vegetation to compensate for the losses from clearing (e.g. Gibbons et al. 2005). Hilderbrand et al. (2005) also criticized this approach because ecosystems cannot generally be shoehorned into a predetermined restoration trajectory and there remains considerable uncertainty about the long-term outcomes of restoration actions.

Even where the impacts of land clearing could be feasibly offset with equivalent habitat, it is operationally difficult to develop an accounting system to ensure that this would happen. Because natural ecosystems have so many different attributes, offset schemes are typically based on characterizing sites – and the changes that occur to them – using indices made up of a subset of attributes, or surrogates (e.g. certain habitat variables, measures of disturbance). To make a currency that is fungible, or tradeable, these surrogates are typically combined into a metric or metrics. Therefore, one combination of attributes or actions can yield the same score or outcome as another combination of attributes or actions. For example, in a critique of the metric underpinning the vegetation assessment technique called habitat hectares (Parkes et al. 2003), McCarthy et al. (2004) demonstrated that the loss in large trees could be compensated by an increase in coarse woody debris. Thus, the need for operational expediency prohibits strict adherence to ‘like-for-like’.

The equivalency of an action on one site to compensate for losses on another is further undermined by the time lag between losses and gains. There can be a considerable period between the establishment of an offset and it performing a function equivalent to that lost from clearing (Morris et al. 2006; Cunningham et al. in press). However, no offset policy in Australia requires the offset to be providing equivalent resources prior to clearing. This results in a break in the continuity of the resource. For some features (e.g. hollow-bearing trees) this can be a considerable time frame (>120 years) (Gibbons & Lindenmayer 2002) having potentially major consequences for some biota (Manning et al. 2004).

Offset schemes are further undermined by a poor track record of compliance. Reviews of mitigation banking in the USA and Canada found a high incidence of non-compliance with permit conditions (Race & Fonseca 1996; Harper & Quigley 2005). For example, Harper and Quigley (2005) determined that offset conditions were followed in 17 of 124 developments on fish habitat in Canada. Claims of poor compliance have also been made with respect to land-clearing regulation in Australia (Auditor-General of New South Wales 2006) with some of this criticism directed specifically at offset schemes (Cutten & Hodder 2002).

Are these criticisms sufficient to reject offsets as a policy instrument for regulating land clearing? Some of the most vehement critics of land-clearing policy in Australia (e.g. Morton et al. 2002; Wentworth Group of Concerned Scientists 2003) have identified that offset schemes are an important part of the policy mix for regulating land clearing. And despite strong criticism of them, Race and Fonseca (1996) and Morris et al. (2006) held that offset schemes should not be rejected as a policy instrument provided their shortcomings are understood and acknowledged. We share the view that offsets can contribute to no net loss in the quality and quantity of native vegetation, but only in certain circumstances.

The circumstances in which offsets can be consistent with no net loss

  1. Top of page
  2. Abstract
  3. Introduction
  4. Limitations of offsets
  5. The circumstances in which offsets can be consistent with no net loss
  6. Conclusions
  7. Acknowledgements
  8. References

It is logical to argue that clearing with offsets can potentially be consistent with no net loss in the quality and quantity of native vegetation if each of the following are observed.

1 Restoration of the values lost from clearing is feasible or the vegetation proposed for clearing is unlikely to persist

Offsets may be appropriate where the functions provided by the vegetation proposed for clearing can be restored elsewhere with confidence. Our current understanding of restoration suggests that complete reconstruction of only relatively simplified native vegetation is feasible. Expertise (or decision support systems) is required to identify vegetation that can be confidently reconstructed (e.g. Perkins 2002). Furthermore, the impacts of land clearing on relatively simplified native vegetation can be fully offset only if the functions provided by this vegetation at broader scales can also be restored. For example, native vegetation that represents a conduit for movements by biota between otherwise isolated habitat should only be cleared if the offset can restore this function.

Offsets also could contribute to no net loss where the vegetation proposed for clearing is unlikely to persist under the current land use or management regime and that regime is unlikely to change. An example is a proposal to clear paddock trees scattered across a cultivated paddock (e.g. to increase production using controlled-traffic farming) – the most common clearing application under the Native Vegetation Act 2005 in New South Wales. The regeneration of trees is not compatible with cultivation so tree cover in such areas is declining irrespective of pressure from clearing (Ozolins et al. 2001) provided the land use continues (there is a trend of increasing cultivation in Australia). Where permission to clear native vegetation in circumstances such as this generates resources to restore a similarly threatened site, then the outcome can provide a net gain (Fig. 3) – but only if calculated over a long time frame (Fig. 4).

image

Figure 3. A scenario where offsets can lead to a net gain. The site on the left (e.g. paddock trees among cultivation) is on a trajectory of degradation and ultimate loss even if clearing were not to occur (top). If this site were partially cleared with an offset on the remainder that restored the site's long-term viability (bottom), then the outcome could be a net gain over the long term (provided the short-term loss in habitat is not irreversible).

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image

Figure 4. A hypothetical illustration of possible change in habitat value (e.g. number of trees with hollows in a cultivated paddock) over time for the scenarios illustrated in Fig. 3. Under the scenario of no clearing (clear curve), trees with hollows would be progressively lost from the site given the current land use. If clearing were to occur over half of the site, with an effective offset on the remainder (stippled curve), then there would be an initial loss in hollow-bearing trees relative to the no-clearing scenario. However, the total number of hollow-bearing trees provided by this scenario over time (as measured by the area under the curve) would exceed that under the no-clearing scenario after 70 years.

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2 Clearing the vegetation does not constitute an immediate risk to a species, population or ecological process

The risk presented by both of the previous approaches is that there is an initial loss in habitat values if clearing occurs before the offset ‘matures’ (Fig. 4) or the offset does not provide identical habitat values or function to that provided by the vegetation cleared, which is highly probable as discussed previously. Therefore, even simplified or unviable native vegetation should not be cleared if the loss of this vegetation, even if temporary, presents an unacceptable risk to a species, population or ecosystem process. For example, native vegetation that is critical for restricting recharge to a water table – and thus protects other native vegetation in the catchment from salinity – should not be cleared regardless of its condition or should only be cleared after an offset has been established that is providing an equivalent function.

3 There is adaptive management

As discussed previously, offsets should not be employed where the impacts of land clearing cannot be restored with confidence. However, even where ecological restoration is feasible, the results cannot always be predicted with confidence because, for example, the experiences from a specific set of circumstances or environment may not translate perfectly to another set of circumstances or environment. Thus, the actions employed to achieve gains on offset sites should be monitored and reviewed periodically within an adaptive management framework (Holling 1978). This means that the management of offset sites should not be set in concrete at the outset, but must be flexible enough to enable some change if the intended outcomes are not being achieved.

4 Offsets provide values for periods commensurate with impacts from clearing

Offsets must provide the intended resources for a period commensurate with impacts from clearing, which should be in perpetuity. Thus, offsets must be secured over time frames that can span changes in land ownership and tenure.

5 There is adequate compliance

The efficacy of offsets is ultimately dependent upon adequate compliance. Given that inadequate compliance is an identified cause of failure among offset schemes, then a compliance audit should be a mandatory part of offset schemes. It should be a condition that offsets are established before clearing and where the risk of failure increases, consideration should be given to allowing clearing only when the offset is providing sufficient values to compensate for the impacts. A formal risk assessment could be considered with respect to likely compliance before clearing and offsets are permitted.

Conclusions

  1. Top of page
  2. Abstract
  3. Introduction
  4. Limitations of offsets
  5. The circumstances in which offsets can be consistent with no net loss
  6. Conclusions
  7. Acknowledgements
  8. References

No net loss remains an unrealized policy aim with respect to land clearing in Australia. The inappropriate use of offsets may have contributed to this predicament. However, some of the most vehement critics of land-clearing policy have not considered offsets sufficiently flawed to reject completely as a policy instrument (Race & Fonseca 1996; Morton et al. 2002; Wentworth Group of Concerned Scientists 2003). We believe that offsetting has a role to play in achieving no net loss, especially while governments continue to allow some land clearing, but only if clearing is restricted to the circumstances in which its impacts can be realistically offset. The use of offsets outside these circumstances should not be employed under a veil of no net loss. That is, offsets should not be used to justify land clearing. This would be a case of the tail wagging the dog.

Footnotes
  1. Dr Philip Gibbonsundertakes applied research at the Centre for Resource and Environmental Studies, The Australian National University (Building 43, Canberra, ACT 0200, Australia. Tel.: 02 6125 2562; Fax: 02 6125 0757; E-mail: pgibbons@cres.anu.edu.au). Professor David Lindenmayer is a landscape ecologist at the Centre for Resource and Environmental Studies, The Australian National University (Building 43, Canberra, ACT 0200, Australia. E-mail: davidl@cres.anu.edu.au). This paper was stimulated by recent debate about the role of offsets in land-clearing policy and recent experience of the co-authors: Phil's experience in the vegetation reforms process in New South Wales and David's findings in a recent large-scale restoration study.

  2. Box 1. Land-clearing statistics for Australia

    Data from the Australian Greenhouse Office (2005) indicated that, between 1988 and 2001, an average of 468 243 ha of woody vegetation (>20% canopy cover and >2 m tall) was converted to another vegetation type or land use per year (note that land-cover change estimates do not necessarily equate with the area of vegetation cleared or the net loss in woody cover). There was a downward trend in the area of woody vegetation converted between 1990 and 1995, with this rate remaining relatively steady, or slightly increasing (c. 400 000 ha per annum) from 1995 to 2001 (Fig. 1). Most land cover conversion over this period occurred in Queensland and New South Wales (Fig. 1), although when expressed as a proportion of total forested area the highest rates of land-cover conversion were in Queensland and Tasmania.

     The most recent land-cover change statistics available at the time of writing indicate a continuing increase in the rate of land-cover conversion. Data from the Department of Natural Resources and Mines (2006) indicated that their estimate of woody-vegetation conversion in Queensland for the year 2003–2004 of 482 000 ha was above the long-term average (1995–2004) of approximately 467 000 ha per year (note that clearing estimates from different sources are not directly comparable because of differences in methodology). In New South Wales the rate of identified clearing in 2005 (74 000 ha) exceeded annual estimates since 2002 (Auditor-General of New South Wales 2006). These figures, however, represent rates of land-cover change before the enactment of new regulations to phase out or end broad-scale clearing in Queensland (Department of Natural Resources and Mines 2004) and New South Wales (New South Wales Government 2006).

Acknowledgements

  1. Top of page
  2. Abstract
  3. Introduction
  4. Limitations of offsets
  5. The circumstances in which offsets can be consistent with no net loss
  6. Conclusions
  7. Acknowledgements
  8. References

This paper benefited from discussions with Sue Briggs and Joern Fischer and comments on previous versions of the manuscript from Adrian Manning and Julian Seddon. Thanks also to Jenny Kesteven and Nikki Fitzgerald for advice on, and access to, land-cover change data. Comments from Tein McDonald, Hugh Possingham and an anonymous referee represented important critique that improved the manuscript in its latter stages.

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  1. Top of page
  2. Abstract
  3. Introduction
  4. Limitations of offsets
  5. The circumstances in which offsets can be consistent with no net loss
  6. Conclusions
  7. Acknowledgements
  8. References
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