Biodiversity Offsets

Rachel Fitzhardinge, Convenor Park Management Committee

NPA recently made a statement to the Legislative Council Inquiry into Biodiversity Offsets. Rachel reviews the background and key points in NPA’s position.


An “offset” is compensation for the loss of biodiversity when development destroys habitat. Biodiversity offsetting is based on the assumption that biodiversity values gained at an offset site will compensate for biodiversity values lost to development at another location, thereby, resulting in “no net loss” of biodiversity. Some offsetting schemes, including in NSW, allow for monetary payments or other forms of compensation in addition to, or instead of, offsets of land.

The current Biodiversity Offsets Scheme (BOS) commenced in 2018 under the Biodiversity Conservation (BC) Act 2016. Under the BOS scheme, developers and landholders generate a credit obligation when impact on biodiversity occurs from development or vegetation clearing. The obligation triggers the need to offset their activity. Landholders, who establish a biodiversity stewardship on their land, create credits that can be sold to developers or landholders who have a credit obligation. Land under a biodiversity stewardship is to be protected in perpetuity.

The Fundamental Problem with Offsetting

The premise on which offsets are based – that they can fully compensate for the loss of biodiversity when habitat is destroyed, is fundamentally flawed, a bureaucratic accounting trick. However much the biodiversity on one parcel of land is “improved”, it cannot compensate for the loss of habitat elsewhere. NPA member, Roger Lembit of Gingra Ecological Surveys has expressed the problem as follows:  “the problem is that no two areas of bushland are identical, … So you’re losing. Regardless of whether you’re improving management of one area, you’re losing bush land and habitat in the areas you are affecting.”[1]

Offsetting and Double Dipping

There have been instances where land set aside as an offset or for conservation purposes under an offsetting or planning scheme has later been used as an offset to compensate for the impacts of another development project. This is referred to as  “double dipping”. 

Examples of double dipping include land, which is offset under the Cumberland Plain Conservation Plan (CPCP) for the extension of the M7, that was already designated as an offset under the Environment Protection and Conservation of Biodiversity Act 1999, which also permits offsetting. Land, which was acquired by the Sydney Regional Development Fund to become the Upper Georges River National Park, is also an offset under the CPCP.

Double dipping highlights that the BOS is just one of a number of schemes that have set aside land to compensate for the impact of developing other land and that there is no central register listing land, which has been offset or reserved from development. Such a register would reduce the likelihood of double dipping occurring.

NPA and the Upper House Inquiry into the Integrity of the NSW Biodiversity Offsets Scheme

NPA’s E0, Gary Dunnett, made a presentation to the Legislative Councils’ Inquiry into the Integrity of the NSW Biodiversity Scheme on 22nd October 2021. NPA had previously made a submission to the Inquiry.

In his presentation, Gary indicated that for over sixty years NPA has lobbied for the permanent protection of areas of exceptional natural and cultural significance.  The network, that is, our national parks, nature reserves, marine parks and other gazetted reserves are critical in retaining healthy biodiverse areas.  The permanent management of such areas for the protection of biodiversity, ecosystem and landscape values is recognised as the ‘gold standard’.

While many protected areas need to be thousands or even millions of hectares to capture the full range of ecosystem processes, habitats and species, there are many examples of vastly smaller protected areas, such as the extraordinarily biodiverse Shiprock Aquatic Reserve at barely half a hectare.  Relatively small reserves are in the protected area network, offering protection to habitats and species that naturally occur within restricted areas. 

Offsets have been used to make additions to the protected area network in NSW. In most instances, the additions have been small, adding to existing reserves, however, in a few cases, major additions, and even an entire reserve (the proposed Colobee Nature Reserve) have been offsets. NPA regards such additions to the NPWS’ reserve system as being the most positive outcome from offsetting.

NPA, however, is very concerned about offsets being used to compensate for the impact of developments in the protected area network.  Several major developments have been approved in national parks subject to the payment of offsets.  This undermines the purpose of protected areas, reducing them to nothing more than the sum of the threatened ecological communities and threatened species that they contain, and ignoring their primary purpose in protecting the integrity and function of entire ecosystems and natural landscapes.  Additionally, no private lands contain the unique ecological communities or habitats found in many national parks including Kosciuszko and the Greater Blue Mountains. Therefore, there is no potential to make an offset of land if development impacts these unique habitats. Instead, a financial payment is the only option for such an offset.

Allowing offsets to “compensate” for the ecological damage that Snowy 2.0 and Warragamba Dam projects will inflict sets an extremely dangerous precedent for the future of the protected areas in NSW.  To provide a strong disincentive to carrying out major developments in protected areas, the cost of offsets should be substantially higher, say tenfold higher, for development carried out in NPWS’ reserves compared to other areas. This would provide a strong signal that development in protected areas is unacceptable and should not occur.

NPA considers that the current BOS is fundamentally flawed in concept and operation.  It results in a net loss of biodiversity in NSW.  It demonstrably fails to ensure no net loss of biodiversity values at any scale – local regional or state. Under any sound biodiversity conservation scheme the State should have an obligation to protect all areas of biodiversity value. It is only in the most exceptional of circumstances that the destruction of threatened ecological communities or species’ habitats should be countenanced. 

As indicated above, the scheme is based on the false premise that an agreement to abstain from future development in one area of high biodiversity value can mitigate the destruction of biodiversity values in another area of similar biodiversity value.  In reality, such offsetting significantly reduces the extent of threatened ecological communities and threatened species habitats in NSW.  The outcome is also a reduction in the resilience and future viability of those communities and habitats.

In conclusion, if the BOS continues, it is imperative that it be amended to ensure that agreed offsets are permanently managed for conservation purposes. The most secure long-term arrangement is the transfer of offset sites to public ownership and management.  Landowners should be appropriately compensated for such transfers. Landholders who chose to retain private ownership of the offset land should receive appropriate conservation incentives.

[1] ‘It’s an ecological wasteland’: offsets for Sydney toll road were promised but never delivered

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