BBOP-EU NNL WORKSHOP Biodiversity offsets and the credit market Victoria, Australia Michael Crowe May 2013
Outline 1. Biodiversity offsetting in Victoria 2. Implementation of offsets the credit market 3. Evolution of offsetting in Victoria
Regulation of native vegetation clearing Loss of native vegetation Native vegetation cover changes: 80% lost on private land compared to pre- 1750 The response: Net gain target for native vegetation Legal mechanism for No Net Loss offsetting Regulation to control losses and require offsets A planning permit is required to clear native vegetation Applicants required to demonstrate avoid and minimise The permit can include a condition requiring an offset The regulation: o is tailored to the task o provides certainty offset outcomes are predictable
Regulation tailored to task Exempt Small Medium Large Impacts eg fire protection fence lines emergency works simple process local government EIA State government
Predictable offset outcomes The nature and size of the offset is set by Native Vegetation Management Framework policy (statutory document): offsets to be ongoing and legally secure like for like rules graduated on biodiversity value No Net Loss in context of overall net gain target a metric for quantifying impacts and offsets the metric combines area and quality known as habitat hectares
No Net Loss The metric enables the application of No Net Loss Gain at the offset site = area x quality score increment/ha Must equal or exceed Loss at the development site = area x quality score (habitat hectares)
Types of Gain Three types of gain: Security gain where the offset is located: On private land with an on-title management agreement On public land with greater security (protected area) Surrender private land to public protected area Maintenance gain Forego entitled uses Control weeds Improvement gain Supplementary planting Reduce weed cover
Assessing loss and gain on site Site assessment by accredited officer Site definition, habitat zones Habitat type Large old trees Quality score Threatened species Conservation Significance Loss score; or Management plan & gain score Relies on state-wide information
Like for like Key elements of like for like matching the offset site to the impact site Vegetation or Habitat type Quality of the vegetation Vicinity of the offset site Conservation Significance Four significance levels based on: Rarity of vegetation type Quality of vegetation Threatened species Other attributes Ramsar, - National Estate... Offset
Like for like - example Conservation Significance Very High High Medium Low Vegetation or habitat type of offset The same vegetation/ habitat type in same bioregion Same vegetation/hab itat type OR a VERY HIGH type in same bioregion Any type in OR a VERY HIGH in same or Bioregion the Bioregion or HIGH type adjacent Trading Up
Offset system and the credit market Developers required to offset (first or third party) Credit Register Offsets considered through standard statutory planning process Planning authorities small impacts ratios - local govt larger impacts full metrics - state agency Brokers Over the counter Create credits landowner agreements land surrender upgrade protected areas Conservation Banks Landowners
Credit creation Credits represent a gain in the quality or extent of native vegetation 3 ways to create credits: 1. Landowner Agreement permanent statutory contract, binds future landowners on title management actions specified in detail reporting and monitoring, site access, progress payments 2. OR Land surrender private land donated to a Protected Area 3. OR Upgrade Protected Area government re-classify public land to higher security All are subject to standards and recorded on government credit register
Market facilitation Brokers find buyers and sellers for bespoke deals match using like-for-like rules facilitate price negotiation Over The Counter credits available at fixed price based on trading up less complex offsets offset details specified in the permit condition walk in and buy - feels like in lieu payment Conservation Banks large credit sites established by investors scale and landscape benefits
Credit market - prices BushBroker price history Bioregion Central Victorian Uplands Number of Agreements Total number of Habitat Hectares Average price per Habitat Hectare * (of total Agreements) Habitat Hectare price range * (more than 80% of Agreements) 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 Highlands- Southern Fall 29 54 $170,000 $49,000 - $267,000 14 74 $34,000 $20,000 - $38,000 Other bioregions 11 25 $370,000 $206,000 - $380,000 Prices vary by bioregion, EVC, location, rarity, demand and urgency of developer, landowner needs. Also initial trade, small or large trades
Evolution of Offsetting in Victoria 1989 - Regulation of native vegetation clearing an end to broad scale clearing However offsetting was sporadic and unquantified 1998 - Biodiversity mapping Extant vegetation, 1750 vegetation, bioregions, threatened species Provided statewide information base 2000 Auction-based incentive program BushTender Introduced site assessment, landowner agreements Development of key techniques outside regulatory environment 2002 - Policy - the Native Vegetation Management Framework No net loss, like-for-like, metrics However developers found it hard to find their offsets 2007/8 Offset market based on credit trading Third party suppliers, brokers, credit register
Lessons learnt NNL offsets won t happen without regulation Use the market to deliver offsets New local and regional enterprises will emerge Offsets a new income source for landowners Government involvement required for: market startup standards and Register statutory agreements System evolves: 23 years and still going! New developments with NaturePrint.
Thank you Questions and comments Michael Crowe mlacrowe@gmail.com