How is biodiversity offsets operating? : a study of its governance structure, strengths and weaknesses and the process of institutionalizing it in the UK

This thesis gives an overview of the governance structure in biodiversity offsets, the arguments for and against it as a delivering mechanism to achieve a “no net loss” target in biodiversity and the current process of innovating biodiversity offsets in the UK. In total, I have analyzed 55 biodiversity offsets programs; to see what governance structures (institutions and actors) characterize biodiversity offsets. Then I have studied the arguments in the academic literature regarding what are the potentials of biodiversity offsets and what problems we are facing. Finally, drivers and processes of the process of introducing UK biodiversity offsets program is described and analyzed using the theory of institutional change. Acknowledging some differences even within programs of the same biodiversity offsets types, the analysis shows three distinct types of biodiversity offsets and in all the three shows variations in their governance structures. These are: compensation, one-off offsets, and habitat banking. Interaction for offsetting in the compensation and one-off offsets takes place between landowners/developers and government bodies (protection authorities and regulators) while habitat banking shows the characteristics of a true market in which multiple buyers and seller interaction via trade with the help of traders. The arguments that support biodiversity offsets includes that the system can overcome the antagonistic nature of development and conservation, possibility to bring about measurable conservation outcome in the form of additionality and the business opportunities it may create by its potential in converting liabilities into asset to land owners. Arguments of opposition include, inability to measure complex nature by reducing into single credit and debit, the uncertainties associated with allowing damage believing in offsetting on another site or in the future, time lags between damage and offsets start giving ecosystem service and loss of social benefits. In the UK case, the need for biodiversity offsets come both from the private sector and the public. A private company, the Environment Bank, is acting as broker in testing the feasibility of biodiversity offsets in the UK. The government through the department for environment and rural affairs (Defra) is actively engaged in piloting the offsets and undertaking consultation with stakeholders. On the other side, environmental groups such as the Friend of the Earth UK, Save Our Wood UK are campagning against the introduction of vi biodiversity offsets in the country. The UK is piloting biodiversity offsets and final decisions whether the system will be formally adopted or not will be know in the summer 2014. In general, biodiversity offsets have short history. So far little is documented concerning the effects of this strategy. Hence, it is premature to make any firm evaluations regarding how they can contribute to halt biodiversity loss.M-IE