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Of sets of offsets: Cumulative impacts and strategies for compensatory restoration


  • Thébaud, Olivier
  • Boschetti, Fabio
  • Jennings, Sarah
  • Smith, Anthony D.M.
  • Pascoe, Sean


Biodiversity offsets are increasingly advocated as a flexible approach to managing the ecological costs of economic development. Arguably, however, this remains an area where policy-making has run ahead of science. A growing number of studies identify limitations of offsets in achieving ecologically sustainable outcomes, pointing to ethical and implementation issues that may undermine their effectiveness. We develop a novel system dynamic modelling framework to analyze the no net loss objective of development and biodiversity offsets. The modelling framework considers a marine-based example, where resource abundance depends on a habitat that is affected by a sequence of development projects, and biodiversity offsets are understood as habitat restoration actions. The model is used to explore the implications of four alternative offset management strategies for a regulator, which differ in how net loss is measured, and whether and how the cumulative impacts of development are considered. Our results confirm that, when it comes to offsets as a conservation tool, the devil lies in the details. Approaches to determining the magnitude of offsets required, as well as their timing and allocation among multiple developers, can result in potentially complex and undesired sets of economic incentives, with direct impacts on the ability to meet the overall objective of ecologically sustainable development. The approach and insights are of direct interest to conservation policy design in a broad range of marine and coastal contexts.

Suggested Citation

  • Thébaud, Olivier & Boschetti, Fabio & Jennings, Sarah & Smith, Anthony D.M. & Pascoe, Sean, 2015. "Of sets of offsets: Cumulative impacts and strategies for compensatory restoration," Ecological Modelling, Elsevier, vol. 312(C), pages 114-124.
  • Handle: RePEc:eee:ecomod:v:312:y:2015:i:c:p:114-124
    DOI: 10.1016/j.ecolmodel.2015.04.022

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    References listed on IDEAS

    1. Vaissière, Anne-Charlotte & Levrel, Harold, 2015. "Biodiversity offset markets: What are they really? An empirical approach to wetland mitigation banking," Ecological Economics, Elsevier, vol. 110(C), pages 81-88.
    2. Clark, C. W. & Lamberson, R., 1982. "An economic history and analysis of pelagic whaling," Marine Policy, Elsevier, vol. 6(2), pages 103-120, April.
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    5. Edward Barbier & Ivar Strand & Suthawan Sathirathai, 2002. "Do Open Access Conditions Affect the Valuation of an Externality? Estimating the Welfare Effects of Mangrove-Fishery Linkages in Thailand," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(4), pages 343-365, April.
    6. Call, Isabel L. & Lew, Daniel K., 2015. "Tradable permit programs: What are the lessons for the new Alaska halibut catch sharing plan?," Marine Policy, Elsevier, vol. 52(C), pages 125-137.
    7. Vatn, Arild, 2014. "Markets in environmental governance — From theory to practice," Ecological Economics, Elsevier, vol. 105(C), pages 97-105.
    8. Lynne, Gary D. & Conroy, Patricia & Prochaska, Frederick J., 1981. "Economic valuation of marsh areas for marine production processes," Journal of Environmental Economics and Management, Elsevier, vol. 8(2), pages 175-186, June.
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