Written by Marian Weber, Alberta Innovates – Technology Futures

1. Designing Biodiversity Offsets in Canada:
Getting the Fundamentals Right
Biodiversity Offsets in Canada: Getting it Right, Making a
Difference
February 14, 2014
University of Ottawa
Marian Weber, Alberta Innovates Technology

2. What are Offsets
 Biodiversity offsets are measurable conservation
outcomes resulting from actions designed to
compensate for significant residual adverse
biodiversity impacts arising from project development
after appropriate prevention and mitigation
measures have been taken.
 The goal of biodiversity offsets is to achieve no net loss
and preferably a net gain of biodiversity
 Biodiversity offsets are a risk management tool to
transfer environmental liabilities from development
between parties (Govt, proponent, 3rd parties)

3. Policy Drivers for ES Markets in AB
AB Land
Stewardship
Act
NEB
AB Public
Lands Act
Act
AB Water
Act
AB Land Use
Framework
Cumulative
Effects
Management
System
Regional Plans
Integrated
Resource
Management
System:
Integrated
Resource
Plans
Environmental
Management
Frameworks
Air, Water,
biodiversity
AB Enviro
Protection &
Enhancement
Act
AB Wetlands
Policy
Wetland
mitigation
banking
Provincial
Offsets (air,
water quality,
land)
Single
Regulator
And Yet …
Fisheri
es Act
Migratory
Birds
Conventi
on Act
Tradable
Water
licenses
Framework for
Market Based
Compliance
and
Conservation
Exchange
Canadian
Enviro
Assesmen
t Act
Species
at Risk
Act
AB GHG
Reduction
Program:
Emission
Performanc
e Credits
Federal
Offsets
ABcarbon
offset
system
3

4. Federal Context
 DFO - Fisheries Act (2012) s.35(2b)
 serious harm to fish (populations)
 Requirement to Offset
 Environment Canada “Operational Framework for Use
of Conservation Allowances”
 Opportunities for the consideration of conservation allowances may
arise through processes administered under the Migratory Birds
Convention Act, 1994 (MBCA), the Species at Risk Act (SARA), the
Canadian Wildlife Act (CWA) and Canadian Environmental
Assessment Act, 2012 (CEAA 2012) that could allow Environment
Canada to consider a proposal for conservation allowances as a
means of mitigating residual environmental effects

5. DFO – Responsibility of the
Applicant
 Description of Effects on Fish and Fish
Habitat
 (a) the fish species that are likely to be affected and
the life stages;
 (c) the probability, magnitude, geographic extent and
duration of the likely effects on fish and fish habitat;
and
 (d) a description of the methodologies
 monitoring and contingency measures; cost of
implementing each element of the offsetting plan;

6. EC Framework –
 evaluation of allowances within the mitigation
hierarchy;
 An allowance agreement should include key elements
 area, timing, duration, monitoring procedures, milestones and
consequences for non-performance
 The enforceability of offsets depends on the nature of
the Act (CEAA, SARA, etc.)
 Each proposal examined on a case-by-case basis
 3rd party banking –
 established prior to approval of any land- or resourceuse activities would be determined on a case-by-case
basis

7. Alberta’s Land Use Framework
(2008)
 A blueprint for land-use
management and
decision-making to
address Alberta’s
growth pressures
 Set regional goals
and objectives for
air, land and water
 Conservation Offsets

8. Environmental Management
Frameworks
 Air, Water Quality, Water Quantity, Biodiversity
 Tiered Threshold Approach (triggers, limits)

9. ERCB Shell-Jack Pine Decision
 Canada and Alberta to consider conservation offsets to
address the significant adverse project effects to:
 wetlands, wetland-reliant species at risk, migratory birds,
biodiversity, cumulative effects to wetlands, traditional
plant potential areas, old-growth forests, ….
 Regard for proposed environmental objectives for the
Athabasca oil sands region and current and proposed
policy frameworks,
 biodiversity management framework, Alberta’s wetlands
policy, and EC’s Operational Framework for Use of
Conservation Allowances, etc.

10. Mines versus death by 1000 cuts
Many projects do not
trigger EIA
Oilsands mining
area 4800 km2
(~15% now)
~55% native prairie
lost
~60% wetland loss
In-situ 2.510 ha/day
forest lost

11. No Net Loss?
Regulated Landscapes versus - Shifting Mosaic

12. Planning vs Decentralized
 Management and
Planning Paradigm





Permanence
Separation of uses
Economic Security
Site Specificity
Targeting
 OFFSETS 
Protected Area
Network, Corridors
 Economic and
Ecological Behavior
 Dynamic
 Autonomous
 Feedback effects
 OFFSETS 
Ecological Risk
Management, Range
of Natural Variation,
floating reserves?

13. Offsets on Public Lands
 Environment Canada Framework on
Allowances
 A provincial or regional land-use plan may set
aside protected areas ahead of time … could
function as a “habitat bank” from which future
allowances could be obtained.
 Moral Hazard Problem?

14. Is there justification for Private
offsets on Public Lands
 Perception
 back door to de facto protected areas
 SO2 - standards vs tradable allowances
 Ambient Emissions Target
 Govt doesn’t know costs
 Reserves versus Offsets
 Don’t know where resources are or value
(exploration)
 What to avoid
 Offset market – price avoidance
 “highest and best use given objectives

15. Cumulative Effects - The
Operational Challenge
 How to lay out footprint (20-50 years)
 How does footprint affect objectives under various
legislative, regulatory, and other policy triggers?
 What to reclaim to
 E.g. what combinations and configurations of upland
and wetland will support meeting environmental
targets?
 Future versus Present
 “wicked problem”
 Landscape is evolving
 Depends on what everyone else does

16. Integrating Land Use Decisions
across Planning Scales
REGION
SITE
Development Problem
Coordination Problem
Planning Problem
•What is the best layout of
footprint over the life of a single
project?
•What are current and
future regional
landscape outcomes?
• What is optimal reclamation
strategy over space and time?
•How does my project interact
with other projects (which
could be mine, or belong to
someone else) at a landscape
level to meet landscape
objectives?
• If there are environmental
markets what is the value of
changing my plan?
• How can we coordinate
and optimize across multiple
projects at a landscape level
• How can I optimize the value
of my project given
environmental constraints or
targets?
• Adaptive Management
Wicked Problem …
To solve alone

17. Offset Markets versus Offset
Transactions
 Coordination Role
 Need “Infrastructure” to Address
Interdependence and complexities
 Sending the right price signals about future
constraints – different habitats, etc.
 Shadow cost constraints given what
everyone else does
 Price avoidance on working landscape
relative to goals

18. Coordination Problem – too
complex?
 Analogy: Airline Gate Trading
 Limited number of Gates
 Trading gates increases airport
efficiency & airlines profitability
 Proof of Concept Extended to
Airspace trading
 who gets what path, which gates
 Piloted – NVX Australia
 AB – Software for ILM
(Silvacom)
 Too complex?
 Compare to DFO responsibilities
delegated to companies

19. Summary
 Offsets stalled because we haven’t solved
the ‘what for’ problem
 Mitigation Hierarchy
 A stop gap in the absence of tools for
planning, objectives and thresholds
 Wrong scale and un-implementable in
practice
 Un-necessary if we price impacts and
avoidance

20. Summary
 Permanence
 Working landscape objectives versus de facto
protected areas
 Clarify what the role of protected areas is
 Additionality … (with a plan)
 is about allocating baselines
 Distributional issue (WHO PAYS AND HOW
MUCH) not an outcome issue

21. Summary
 Policy Patchwork policy and need for
Consistency and Standardization
 No objectives against which to price/value
decisions
 Fed frameworks pass liability to companies without
certainty
 Discourages up-front investment
 Delegates enforcement (3rd parties?)
 NGOs do not want to be enforcers

22. Summary
 Government Needs to
 Set plans and objectives (TARGETS
FOR HABITAT/DISTURBANCE)
 Distinguish Protected Areas vs Working
lands Objectives
 Replace mitigation hierarchy with an
offsets market that prices avoidance

23. SUMMARY
 Government needs to
 Establish Consistency between Departments and
Acts for how offsets will be used
 Equivalence - Methods, Metrics, requirements
 Infrastructure
 Reduce uncertainties around transfer of liability
 Clarify responsibilities of Industry vs Government
 Eliminate barriers to participation on public lands
 New dispositions for creating public values on public
lands
Thankyou