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Biodiversity Offsetting in Victoria

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Institute of the Environment

Victoria, Australia has implemented a biodiversity offsetting program since 1989 to regulate native vegetation clearing for development projects. Over time, the program has established policies, improved biodiversity mapping, developed metrics to quantify losses and gains, and established an offset market. Under current policy, developers must avoid and minimize native vegetation impacts, and any remaining impacts require offsets that achieve no net loss of biodiversity. Offsets are secured via long-term agreements that improve the quality and management of lands to increase habitat scores over time, ensuring offsets are permanent and additional to what would have occurred without the development. Recent revisions aim to streamline the process and increase flexibility while maintaining the goal of no net loss of biodiversity.

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Biodiversity Offsets in Canada Conference Biodiversity offsetting in Victoria Michael Crowe February 2014
Native Vegetation Controls Year: 1788 to 2012
Evolution of Offsetting in Victoria 1989 – Initial regulation of native vegetation clearing • an end to large scale clearing However offsetting was sporadic and not codified 1998 - Biodiversity mapping • Extant vegetation, 1750 vegetation, bioregions, threatened species Provided state-wide information base 2002 - Policy - the Native Vegetation Management Framework • No net loss, like-for-like, metrics ….. However developers found it hard to find their offsets 2007 – Offset market based on credit trading • Third party suppliers, brokers, credit register 2013 – Some policy amendments and technical improvements
The Regulation Regulation of native vegetation clearing: • A planning permit required to clear native vegetation • Assessment of permit applications based on the biodiversity significance of the impact • Applications must demonstrate ‘avoid’ and ‘minimise’ steps of the mitigation hierarchy • The permit (if granted) requires an offset
Offset policy in Victoria - 2002 The nature and size of the offset was set by Native Vegetation Management Framework policy (statutory document): – Avoid, minimise, offset – No Net Loss – Quality/area metric - habitat hectares – Offsets to be secure and ongoing – Additionality – Like for like rules – Biodiversity importance
No net loss – quality is important
Measuring site quality – 10 attributes in habitat hectares reduced cover of trees reduced recruitment reduced understorey diversity increased cover of weeds Habitat score = 0.50
Increased quality at the offset site tree canopy cover size & connectivity of the patch large old trees understorey diversity recruitment of young trees logs & organic litter Habitat score = 0.90
Estimating Gain Total gain = area x quality increment/ha • Improvement gain Increments in quality attribute scores resulting from restoration actions (eg revegetation) • Management gain Increments in quality attribute scores resulting from actions to control threatening processes (eg pest & weed control) • Security gain Increments in overall quality score depending on the changes in land use (eg establish protected areas) • Gain scoring includes rules for additionality
Secure and ongoing • The landowner agreement – private land − permanent statutory contract − binds future landowners – on title − actions and commitments in the management plan − reporting and monitoring • Land surrender − private land donated to a permanent protected area • Upgrade to Protected Area − government re-classifies public land to higher security category through legislation
The offsetting process - summary Developers Developers required to provide offsets • first party • third party (market) Loss site assessment, Permit application Local Government Determine small impacts Refer large impacts to State Government Permit may be granted Permit includes offset conditions – offset plan
BushBroker price history Offset market Bioregion Number of Agreements credit prices Total number of Habitat Hectares Average price per Habitat Hectare * (of total Agreements) Habitat Hectare price range * (more than 80% of Agreements) Central Victorian Uplands 8 10 $110,000 $46,000 - $143,000 Gippsland Plain 21 29 $149,000 $85,000 - $250,000 Goldfields 39 38 $45,000 $25,000 - $66,000 Victorian Riverina 10 11 $101,000 $80,000 - $110,000 Victorian Volcanic Plain 29 54 $170,000 HighlandsSouthern Fall 14 74 $34,000 Other bioregions 11 25 $370,000 • $20,000 - $38,000 $206,000 $380,000 Third party offsets estimated 25-50% savings over first party • $49,000 $267,000 Estimated market turnover up to $100m Prices vary by bioregion, EVC, location, rarity, demand and urgency of developer, landowner needs. Also initial trade, small or large trades
2013 Revisions New provisions were recently announced: • Like for like  Threatened species – distribution models  Everything else – increased flexibility • Use of maps for site assessment  reduced transaction cost  assessment consistency  accuracy of maps? • Transaction cost reduction  more ‘over the counter’
Biodiversity offsets in Canada Conference Biodiversity offsetting in Victoria Thank you mlacrowe@gmail.com

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Biodiversity Offsetting in Victoria

  • 1. Biodiversity Offsets in Canada Conference Biodiversity offsetting in Victoria Michael Crowe February 2014
  • 3. Evolution of Offsetting in Victoria 1989 – Initial regulation of native vegetation clearing • an end to large scale clearing However offsetting was sporadic and not codified 1998 - Biodiversity mapping • Extant vegetation, 1750 vegetation, bioregions, threatened species Provided state-wide information base 2002 - Policy - the Native Vegetation Management Framework • No net loss, like-for-like, metrics ….. However developers found it hard to find their offsets 2007 – Offset market based on credit trading • Third party suppliers, brokers, credit register 2013 – Some policy amendments and technical improvements
  • 4. The Regulation Regulation of native vegetation clearing: • A planning permit required to clear native vegetation • Assessment of permit applications based on the biodiversity significance of the impact • Applications must demonstrate ‘avoid’ and ‘minimise’ steps of the mitigation hierarchy • The permit (if granted) requires an offset
  • 5. Offset policy in Victoria - 2002 The nature and size of the offset was set by Native Vegetation Management Framework policy (statutory document): – Avoid, minimise, offset – No Net Loss – Quality/area metric - habitat hectares – Offsets to be secure and ongoing – Additionality – Like for like rules – Biodiversity importance
  • 6. No net loss – quality is important
  • 7. Measuring site quality – 10 attributes in habitat hectares reduced cover of trees reduced recruitment reduced understorey diversity increased cover of weeds Habitat score = 0.50
  • 8. Increased quality at the offset site tree canopy cover size & connectivity of the patch large old trees understorey diversity recruitment of young trees logs & organic litter Habitat score = 0.90
  • 9. Estimating Gain Total gain = area x quality increment/ha • Improvement gain Increments in quality attribute scores resulting from restoration actions (eg revegetation) • Management gain Increments in quality attribute scores resulting from actions to control threatening processes (eg pest & weed control) • Security gain Increments in overall quality score depending on the changes in land use (eg establish protected areas) • Gain scoring includes rules for additionality
  • 10. Secure and ongoing • The landowner agreement – private land − permanent statutory contract − binds future landowners – on title − actions and commitments in the management plan − reporting and monitoring • Land surrender − private land donated to a permanent protected area • Upgrade to Protected Area − government re-classifies public land to higher security category through legislation
  • 11. The offsetting process - summary Developers Developers required to provide offsets • first party • third party (market) Loss site assessment, Permit application Local Government Determine small impacts Refer large impacts to State Government Permit may be granted Permit includes offset conditions – offset plan
  • 12. BushBroker price history Offset market Bioregion Number of Agreements credit prices Total number of Habitat Hectares Average price per Habitat Hectare * (of total Agreements) Habitat Hectare price range * (more than 80% of Agreements) Central Victorian Uplands 8 10 $110,000 $46,000 - $143,000 Gippsland Plain 21 29 $149,000 $85,000 - $250,000 Goldfields 39 38 $45,000 $25,000 - $66,000 Victorian Riverina 10 11 $101,000 $80,000 - $110,000 Victorian Volcanic Plain 29 54 $170,000 HighlandsSouthern Fall 14 74 $34,000 Other bioregions 11 25 $370,000 • $20,000 - $38,000 $206,000 $380,000 Third party offsets estimated 25-50% savings over first party • $49,000 $267,000 Estimated market turnover up to $100m Prices vary by bioregion, EVC, location, rarity, demand and urgency of developer, landowner needs. Also initial trade, small or large trades
  • 13. 2013 Revisions New provisions were recently announced: • Like for like  Threatened species – distribution models  Everything else – increased flexibility • Use of maps for site assessment  reduced transaction cost  assessment consistency  accuracy of maps? • Transaction cost reduction  more ‘over the counter’
  • 14. Biodiversity offsets in Canada Conference Biodiversity offsetting in Victoria Thank you mlacrowe@gmail.com