State of Biodiversity Markets Offset and Compensation Programs Worldwide

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State of Biodiversity Markets Offset and Compensation Programs Worldwide 2011 Update State of Biodiversity Markets Offset and Compensation Programs Worldwide Offset and Compensation Programs Worldwide i Donors and Sponsors Acknowledgements This report is public and freely available due The following pages represent a compilation of to the financial contributions from Ecosystem the resources, insights and knowledge of dozens Marketplace Donors: the United Nations of individuals. They include: Naoki Adachi, Development Program and the Global Giovana Baggio, Joost Bakker, Tricia Bancroft, Environment Facility. Michael Bennett, Claude Brassard, Susie Brownlie, Anne Buchan, Jan Cassin, Constance Disclaimer Cassler, Bobby Cochran, Amanda Cornwall, Matthew Cranford, Marianne Darbi, Craig Ecosystem Marketplace is a project of Forest Denisoff, Paul Dettmann, Ian Dickie, Jennifer Trends. Any reference to Forest Trends or Feick, Andrew Fisher, Grant Furness, Todd Ecosystem Marketplace in this disclaimer Gartner, Amrei Von Hase, Slayde Hawkins, Kii includes Forest Trends, Ecosystem Marketplace, Hayashi, Scott Hickie, David Hill, Ryan Hilperts, and all of their respective affiliates, partners, Marian Honeczy, Stefan Hörmann, Kyle Hunt, officers, directors, and employees. Brad Jakowyna , Kerry ten Kate, Kristine Koster, Patrice LeBlanc, Laure Ledoux, Sheri Lewin, The information in this report is provided for Nick Lewis, Patrick Maguire, Jeffrey Manuel, general informational purposes only and should Steve Martin, Brenda McAfee, Lucian McElwain, not be construed to contain legal, business, Deblyn Mead, Jessica Miles, Karen Mulligan, Bob accounting, tax, or other professional advice. Norman, Joe Obad, Takahiro Ota, Bob Pett, Jim No one should act or refrain from acting on the Perry, Alwyn Rose, Eric Sprague, Akira Tanaka, basis of any information contained in this report David Urban, Phuc Xuan To, Gerri Ward, Steven without seeking appropriate professional advice Ward, Carla Gomez Wichtendahl, Mitch Wine. based on his or her particular circumstances. While Ecosystem Marketplace strives to provide We also wish to thank Michael Jenkins, President accurate and timely information, all information of Forest Trends, for his guidance and the entire in the report is presented “as-is,” without any staff of Forest Trends for their continued support representation as to its accuracy, suitability, and contributions. timeliness, completeness, or continued availability. ii 2011 Update - State of Biodiversity Markets 2011 Update State of Biodiversity Markets Offset and Compensation Programs Worldwide Preferred Citation Madsen, Becca, Nathaniel Carroll, Daniel Kandy, and Genevieve Bennett, 2011 Update: State of Biodiversity Markets. Washington, DC: Forest Trends, 2011. Available at: http://www. ecosystemmarketplace.com/reports/2011_update_sbdm. Contributors Jemma Denny (New Zealand School of Forestry, University of Canterbury) and Michelle Gane (Institute for Sustainable Resources, Queensland University of Technology) Offset and Compensation Programs Worldwide iii About Ecosystem Marketplace Ecosystem Marketplace, a project of the non-profit organization Forest Trends, is a leading source of information on environmental markets and payments for ecosystem services. Our publicly available information sources include annual reports, quantitative market tracking, weekly articles, daily news, and newsletters designed for different payments for environmental services stakeholders. We believe that by providing solid and trustworthy information on prices, regulation, science, and other market-relevant issues, we can help payments for ecosystem services and incentives for reducing pollution become a fundamental part of our economic and environmental systems, helping make the priceless valuable. Ecosystem Marketplace 1050 Potomac St., NW Washington, DC 20007 [email protected] www.ecosystemmarketplace.com www.forest-trends.org iv 2011 Update - State of Biodiversity Markets Executive Summary In today’s climate of rapid biodiversity focus on programs (laws or policies) which loss, decreasing philanthropic and public require offsets or compensation for impacts conservation dollars, and the growing to biodiversity . recognition that conservation must address Our research finds 45 existing compensatory the scale of economic drivers it seeks to mitigation programs around the world, correct, governments and businesses are ranging from programs with active mitigation seeking new ways to balance economics and banking of biodiversity credits to programs ecology. And as governments and businesses channeling development impact fees to explore and adopt market-like instruments to policies that drive one-off offsets. There are strike this balance, it is as important as ever another 27 programs in various stages of to understand what is happening, where, and development or investigation. Within each how the tools work. active offset program, there are numerous Here at the Ecosystem Marketplace, it is individual offset sites, including over 1,100 our mission to provide to the public reliable mitigation banks worldwide. information at no cost, to enable all market The global annual market size is USD 2.4-4.0 participants to make more informed decisions, billion at minimum, and likely much more, as learn from the experiences of others, and 80% of existing programs are not transparent ultimately allow stable, equitable, and enough to estimate their market size. The effective conservation markets to develop. conservation impact of this market includes at To address the vital need for more and better least 187,000 hectares of land under some sort information, we have written this update to of conservation management or permanent our initial State of Biodiversity Markets report legal protection each year. to provide a succinct answer to the question “What is currently happening in biodiversity North America continues to dominate offset and compensation programs around activity in biodiversity markets, with 15 the world?” active programs and 4 in development. The US aquatic compensatory mitigation and As such, this report is a companion paper conservation banking programs account for to the initial report that highlights the the greatest volume of payments and area to key developments over the past year. If the global biodiversity market, bringing in you haven’t read the initial report,1 we USD 2.0-3.4 billion and over 15,000 hectares encourage you to download here or from (37,700 acres) annually. US mitigation EcosystemMarketplace.com and read it in banking is still showing increases, with a parallel with the 2011 Update. The initial total of 1,044 active and sold-out wetland, report is still relevant and lays out the stream and conservation banks. The lagging fundamentals of biodiversity markets, with a economy and reduced federal investments 1 Becca Madsen, Nathaniel Carrol, Kelly Moore Brands, State of in infrastructure projects may, however, Biodiversity Markets Report: Offset and Compensation Programs Worldwide, 2010, http://www.ecosystemmarketplace.com/documents/acrobat/sbdmr. pdf. Offset and Compensation Programs Worldwide v create a glut in supply of mitigation credits In Asia, the past year has seen some countries, that will outstrip demand until the economy including Vietnam and Japan, make progress rebounds. In Canada, we are seeing increased on frameworks for biodiversity payment transparency of fish habitat banking mechanisms. In Japan, a number of initiatives nationally and new policy developments were launched to explore the feasibility on environmental mitigation and offsets in of biodiversity offsets in the country, British Columbia, while Alberta’s policy on while Vietnam’s new decree outlining a wetland mitigation has seen back-sliding in compensation process for environmental the principle of “no net loss.” damages took effect in early 2011. The biggest development in Central and Finally, over in Oceana, Australia continues to South America are the recent changes in develop unconnected state-level biodiversity Brazil’s Forest Code that limit the impact and offset and banking programs. In New scope of the law. On the positive side, the UN South Wales, BioBanking continues to gain Development Program has highlighted the momentum and now boasts five BioBank sites. value of ecosystems and potential for habitat BushBroker, the “matchmaker” of Victoria’s banking in two major research reports, ”The native vegetation offsets, is now in its sixth Importance of Biodiversity and Ecosystems year of existence and has assisted around in Latin America and Caribbean: A Regional 300 transactions cumulatively. The Northern Economic Valuation of Ecosystems” and Territory released a new draft Environmental ”Habitat Banking in Latin America and Offsets Policy in October 2010. In New Caribbean: A Feasibility Assessment.” Zealand, a National Biodiversity Policy Statement is expected to go into effect in June In Africa, countries are continuing to of this year and could provide a national push explore and develop biodiversity offsets for greater implementation of the mitigation policy but little progress has been made in hierarchy and the “no net loss” principle. implementation. Several policies are still in This Policy Statement could eventually development in South Africa, and Namibia trickle down into local, council, and district is incorporating offset concepts in strategic policies – like those being developed in the planning to address a boom in uranium progressive Waikato and Gisborne Districts. mining. Many regions around the world are
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