Global Assessment of the Biodiversity Safeguards of Development Banks that Finance Infrastructure

Infrastructure development is a major driver of biodiversity loss globally. With upwards of US$2.5 trillion in annual investments in infrastructure, the financial sector indirectly drives this biodiversity loss. At the same time, biodiversity safeguards (project-level biodiversity impact mitigation requirements) of infrastructure financiers can help limit this damage. The coverage and harmonization of biodiversity safeguards are important factors in their effectiveness and therefore warrant scrutiny. It is equally important to examine the extent to which these safeguards align with best-practice principles for biodiversity impact mitigation outlined in international policies, such as that of the IUCN. We assessed the biodiversity safeguards of public development banks and development finance institutions for coverage, harmonization, and alignment with best practice. We used Institute of New Structural Economics and Agence Française de Développement's global database to identify development banks that invest in high-biodiversity-footprint infrastructure and have over US$500 million in assets. Of 155 banks 42% (n = 65) had biodiversity safeguards. Of the existing safeguards, 86% (56 of 65) were harmonized with International Finance Corporation (IFC) Performance Standard 6 (PS6). The IFC PS6 (and by extension the 56 safeguard policies harmonized with it) had high alignment with international best practice in biodiversity impact mitigation, whereas the remaining 8 exhibited partial alignment, incorporating few principles that clarify the conditions for effective biodiversity offsetting. Given their dual role in setting benchmarks and leveraging private finance, infrastructure financiers in development finance need to adopt best-practice biodiversity safeguards if the tide of global biodiversity loss is to be stemmed. The IFC PS6, if strengthened, can act as a useful template for other financier safeguards. The high degree of harmonization among safeguards is promising, pointing to a potential for diffusion of practices.

Evaluating the potential of biodiversity offsets to achieve net gain

Evaluating the outcomes and tracking the trajectory of biodiversity offsets is essential to demonstrating their effectiveness as a mechanism to conciliate development and conservation. We reviewed the literature to determine the principles that should underpin biodiversity offset planning and the criteria for offset evaluation at the project level. According to the literature, the core principles of equivalence, additionality, and permanence are used as criteria to evaluate conservation outcomes of offsets. We applied the criteria to evaluate offsets of a large iron ore mining project in the Atlantic Forest in Brazil. We examined equivalence in terms of the amount of area per biodiversity value affected and fauna and flora similarity, additionality in terms of landscape connectivity, and permanence in terms of guarantees to ensure protection and restoration offsets lasting outcomes. We found an offset ratio (amount of affected area:offset area) of 1:1.8 for forests and 1:2 for grasslands. Ecological equivalence (i.e., similarity between affected and offset areas) was found for forested areas, but not for ferruginous rupestrian grasslands or for fauna. Landscape metrics showed that connectivity improved relative to the preproject situation as a result of locating restoration offsets in the largest and best-connected forest patch. Permanence of offsets was addressed by establishing covenants and management measures, but financial guarantees to cover maintenance costs after mine closure were lacking. Offsets should be equivalent in type and size, provide conservation outcomes that would not be obtained without them (additionality), and be lasting (permanence). To monitor and evaluate offsets, it is necessary to determine how well these 3 principles are applied in the planning, implementation, and maintenance of offsets. Achieving measurable conservation outcomes from offsets is a long-term endeavor that requires sustained management support, and is information intensive. Thus, offsets require ongoing monitoring and evaluation as well as adaptive management.

Mitigation translocation as a management tool

Mitigation translocation is a subgroup of conservation translocation, categorized by a crisis-responsive time frame and the immediate goal of relocating individuals threatened with death. However, the relative successes of conservation translocations with longer time frames and broader metapopulation- and ecosystem-level considerations have been used to justify the continued implementation of mitigation translocations without adequate post hoc monitoring to confirm their effectiveness as a conservation tool. Mitigation translocations now outnumber other conservation translocations, and understanding the effectiveness of mitigation translocations is critical given limited global conservation funding especially if the mitigation translocations undermine biodiversity conservation by failing to save individuals. We assessed the effectiveness of mitigation translocations by conducting a quantitative review of the global literature. A total of 59 mitigation translocations were reviewed for their adherence to the adaptive scientific approach expected of other conservation translocations and for the testing of management options to continue improving techniques for the future. We found that mitigation translocations have not achieved their potential as an effective applied science. Most translocations focused predominantly on population establishment- and persistence-level questions, as is often seen in translocations more broadly, and less on metapopulation and ecosystem outcomes. Questions regarding the long-term impacts to the recipient ecosystem (12% of articles) and the carrying capacity of translocation sites (24% of articles) were addressed least often, despite these factors being more likely to influence ultimate success. Less than half (47%) of studies included comparison of different management techniques to facilitate practitioners selecting the most effective management actions for the future. To align mitigation translocations with the relative success of other conservation translocations, it is critical that future mitigation translocations conform to an established experimental approach to improve their effectiveness. Effective mitigation translocations will require significantly greater investment of time, expertise, and resources in the future.

The least-cost biodiversity impact mitigation hierarchy with a focus on marine fisheries and bycatch issues

Least-cost implementation of the mitigation hierarchy of impacts on biodiversity minimizes the cost of a given level of biodiversity conservation, at project or ecosystem levels, and requires minimizing costs across and within hierarchy steps. Incentive-based policy instruments that price biodiversity to alter producer and consumer behavior and decision making are generally the most effective way to achieve least-cost implementation across and within the different hierarchy steps and across all producers and conservation channels. Nonetheless, there are circumstances that favor direct regulation or intrinsic motivation. Conservatory offsets, introduced within the conservatory first three steps of the mitigation hierarchy, rather than the fourth step to compensate the residual, provide an additional incentive-based policy instrument. The least-cost mitigation hierarchy framework, induced through incentive-based policy instruments, including conservatory offsets, mitigates fisheries bycatch consistent with given targets, the Law of the Sea, and the Convention on Biological Diversity.

Alternatives to biodiversity offsets for mitigating the effects of urbanization on stream ecosystems

Globally, offset schemes have emerged in many statutory frameworks relating to development activities, with the aim of balancing biodiversity conservation and development. Although the theory and use of biodiversity offsets in terrestrial environments is broadly documented, little attention has been paid to offsets in stream ecosystems. Here we examine the application of offset schemes to stream ecosystems and explore whether they suffer similar shortcomings to those of offset schemes focused on terrestrial biodiversity. To challenge the applicability of offsets further, we discuss typical trajectories of urban expansion and their cascading physical, chemical and biological impacts on stream ecosystems. We argue that the highly connected nature of stream ecosystems and urban drainage networks can transfer impacts of urbanization across wide areas, complicating the notion of like-for-like exchange and the prospect of effectively mitigating biodiversity loss. Instead, we identify in-catchment options for stormwater control, which can avoid or minimize the impacts of development on downstream ecosystems, while presenting additional public and private benefits. We describe the underlying principles of these alternatives, some of the challenges associated with their uptake, and policy initiatives being trialed to facilitate adoption. In conclusion, we argue that stronger policies to avoid and minimize the impacts of urbanization provide better prospects for protecting downstream ecosystems, and can additionally, stimulate economic opportunities and improve urban liveability.

Cost shifting and other perverse incentives in biodiversity offsetting in India

Biodiversity offsetting aims to compensate for development-induced biodiversity loss through commensurate conservation gains and is gaining traction among governments and businesses. However, cost shifting (i.e., diversion of offset funds to other conservation programs) and other perverse incentives can undermine the effectiveness of biodiversity offsetting. Additionality-the requirement that biodiversity offsets result in conservation outcomes that would not have been achieved otherwise-is fundamental to biodiversity offsetting. Cost shifting and violation of additionality can go hand in hand. India's national offsetting program is a case in point. Recent legislation allows the diversion of offset funds to meet the country's preexisting commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Convention on Biological Diversity (CBD). With such diversions, no additional conservation takes place and development impacts remain uncompensated. Temporary additionality cannot be conceded in light of paucity of funds for preexisting commitments unless there is open acknowledgement that fulfillment of such commitments is contingent on offset funds. Two other examples of perverse incentives related to offsetting in India are the touting of inherently neutral offsetting outcomes as conservation gains, a tactic that breeds false complacency and results in reduced incentive for additional conservation efforts, and the clearing of native vegetation for commercial plantations in the name of compensatory afforestation, a practice that leads to biodiversity decline. The risks accompanying cost shifting and other perverse incentives, if not preempted and addressed, will result in net loss of forest cover in India. We recommend accurate baselines, transparent accounting, and open reporting of offset outcomes to ensure biodiversity offsetting achieves adequate and additional compensation for impacts of development.