BIODIVERSITY OFFSETS IN SA The Potential, the Reality & Conservation Banking as an option for realizing the benefits.

Transcription

1 BIODIVERSITY OFFSETS IN SA The Potential, the Reality & Conservation Banking as an option for realizing the benefits KZN BIODIVERSITY & BUSINESS INDABA South African Sugar Association, Mt Edgecombe, KwaZulu-Natal 17 March 2017

2 BIODIVERSITY OFFSETS The Concept, the Need and its Potential

3 BIODIVERSITY OFFSETS - mechanism for addressing the unavoidable, significant residual impact of development on biodiversity. NB Offsets provide a mechanism for internalizing the full project cost & addressing cumulative impacts. HOW restore/rehabilitate degraded AND/or protect high quality habitat (offsite).

4 OFFSET PRINCIPLES 1) Strict application of the mitigation hierarchy. 2) Offset must be secured & managed in the long term/perpetuity. 3) Apply a landscape approach. 4) No-net loss. 5) Like for Like. 6) Consider ecosystem services in determining loss failing of EIA. 7) There are limits to what can be offset. 8) Address risks of failure. 9) Stakeholder consultation is NB. 10) Offset prior to Impact

5 BIODIVERSITY OFFSETS IN SA Status Quo

6 OFFSET CONTEXT IN SA Examples of conditions of authorizations (EIA, WULA) in SA for last years. Poor implementation: Of the approximately 100 documented offsets few successes. REASONS Delayed & fragmented policy framework Several DRAFT provincial policies. National wetland offset guideline (ecosystem service/functional & biodiversity focus). National framework & policy due for gazetting. Terrestrial focus - rivers not accounted for.

7 Fragmented regulatory leadership. Poor co-ordination/leadership within regulatory authorities. Lack of understanding amongst consultants and officials. Inconsistent, poorly worded conditions. NTABELANGA DAM The holder of the authorization must contribute to existing conservation projects in the area. SPRING GROVE DAM : (l) A detailed plan for the rehabilitation of off-site wetlands in the Mooi and Mgeni catchments to mitigate the loss of wetland function and habitat (including base monitoring.. (m) A detailed plan of action to establish offset areas to compensate for the loss of biodiversity and habitat, and for their management during the operational phase of the MMTS-2.

8 PRIMARY REASON Offsets are considered ad hoc/post Authorization & development. Developers don t have skills/inclination. Finding sites and securing is lengthy process. Offset hasn t been built into project CAPEX. Governance arrangements for financial flows, and institutional mechanisms for securing and overseeing long term management differ in most cases and are often complex. CONCLUSION: Currently not achieving intended BENEFITS of offsets actually having negative impact. REQUIRE A PROACTIVE APPROACH

9 THE ANSWER? CONSERVATION BANKING A market-based scheme that provides a streamlined biodiversity assessment process for development, a credible offsetting scheme as well as an opportunity for rural landowners to generate income by managing land for conservation... (NSW Government)

10 How does BB Work? Register and Audit Banks BANKER Creates bank by restoring, enhancing, protecting biodiversity assets - & securing/ managing in perpetuity Credits = Improvement in site value* area Cost of credit includes: o Land, o Restoration, o L/t management, o Opportunity cost Annual report/audit Purchase Credits AUTHORITY Establishes methodology for establishing loss and setting credits. Set offset rules (like-like, offset area) Establish & manage register. Annual review of sites & scheme report. Compliance of all parties. Coordinate involvement from other agencies Local Government, etc Planning/ Environmental Authorization establishes Offset Requirement DEVELOPER Apply mitigation hierarchy. Undertake assessment to identify nature, extent and type of impact. Identify offset requirements. Purchase appropriate biodiversity credits

11 Benefits of Banking over Ad Hoc Offsets Avoid impact associated delays. Reduce risk of failure by ensuring the credit has been achieved. Focus on large, strategic priorities (cost efficient and higher biodiversity value). Cost of offset is known. Ensures consistency and transparency. Take responsibility out of the hands of developers. Establishes incentives to do it correctly.

12 International Experience US Wetland banking scheme in existence since the 1970s. Developers or banking companies restore, establish or enhance an aquatic resource. More than 400 wetland banks Market worth $3 billion annually. NB selected banking over other options ad hoc offsets and in lieu contributions Australia Launched habitat banking scheme in known as BioBanking, Scheme operationalized in New South Wales by State Department

13 UK Credit scheme run by a private company (Environment Bank Ltd), Developers purchase shares in a 100m project to restore conservation land around the river Thames. Contribute to bigger conservation projects rather than common practice on 'small, poorly maintained plots'. SOUTH AFRICA WRC Investigation Wetland Mitigation Banking (2008 WRC Report K8/700) - led to small pilot in Olifants catchment Pilot banking project in ethekwini current.

14 CONSERVATION BANKING SYSTEM FOR S.A. How to Optimize the Benefits & Limit Risk?

15 REQUIREMENTS REQUIRMENT 1. Supply - Know where critical biodiversity is. 2. Demand - Know where development pressure is. 3. Assessment tools define loss and define credits. Met/NOT High quality conservation planning. SIPS, Mining, Water resources planning (dam sites), Municpal scale - SDFs, EIA applications. Wetlands delineation guidelines, WRC rehab series, offset guideline & calculator. Grasslands veld condition scoring. River- SASS, etc 4. Experience in restoration/ rehabilitation. 5. Strong regulatory framework. 20 years of experience, systems and skills from NRM programmes. Comprehensive legal framework. Will require additional specific regulatory tools. 6. Mechanisms to secure offsets. Stewardship (PAAct) & Conservation servitudes. 7. Adequate capacity to implement & enforce. Significant risk

16 BIODIVERSITY CONSERVATION IN SA Inadequate funds to manage existing PAs. Don t have adequate finance to purchase land meet PA targets. Large proportion of key biodiversity located on private land. Stewardship - provides an answer BUT Lack of capacity to establish new sites. Lack capacity (personnel and finance) to manage existing in the long term (massive risk). Relies on landowner willingness lack of adequate financial incentives limits access to key sites.

17 OPTION 1 -FREE MARKET (NSW MODEL) Banker Existing landowners or entrepreneurs establish banks according to rules of the game. Government Regulator (Environmental Affairs) Develops rules of the game setting of credits Maintains offset register. Audits banks Develops Risks/Benefits Not core to existing landowner business. 3rd parties develop inferior credits. Inadequate govt capacity to review and enforce compliance across multiple banking institutions e.g. US 400 wetland banks.

18 OPTION 2 - ADAPTED STEWARDSHIP Banker Government (Conservation Authorities) Sites secured through stewardship. NRM Programmes establish credits (restore sites) costs for ongoing support built into cost of credit to sustain follow up (current issue) Government Regulator (Environmental Affairs) Develops rules of the game setting of credits Maintains offset register. Audits banks Landowner Manages according BM Agreement Opportunity cost and or benefits of maintaining Ecosystem Services built into cost of credit receives annual payment thereby creating REAL incentive. Risks (Fatal Flaws) Govt acting as player and referee. Government Bureaucracy/lack of capacity/corruption. Capacity to monitor. NRM - Capacity/flexibility to implement & more costly labour intensive model.

19 OPTION 3 - SINGLE BANKER SYSTEM Banker Single purpose, non profit entity (land trust?) Sites secured through stewardship/servitude (avoid land costs) Restoration according to most effective methods (reduce time/cost). Landowner Manages according BM Agreement Opportunity cost and or benefits of maintaining Ecosystem Services built into cost of credit receives annual payment thereby creating REAL incentive. Government Regulator (Environmental Affairs) Develops rules of the game setting of credits Maintains offset register. Audits banks Risks/Benefits Initial capital to establish institution and bank. Capacity/flexibility to implement/operate. Compliance monitoring demand reduced as banker is single entity.

20 CONCLUDING COMMENTS 1. Development pressure will only increase -Offsets only way to address unavoidable loss & internalise full development cost. 2. Offsets - Here To Stay. We have gone to far down this road. BUT current practice is generally unsuccessful, particularly on pvt land. 3. Capacity and financing challenges in securing key biodiversity & stewardship as key response to PA expansion. 4. Conservation Banking: Has potential to realise benefits of Offsets, Address shortcomings in conservation sector. Much in place.

21 WAY FORWARD 1. ID and test best option for SA via comprehensive Pilot study - with focus on Risk Assessment 2. In the meantime as far as possible get offsets right!