Impact Assessment and Project Appraisal

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Biodiversity tradeoffs and offsets in impact

assessment and decision making: can we stop the
loss?

Susie Brownlie , Nicholas King & Jo Treweek

To cite this article: Susie Brownlie , Nicholas King & Jo Treweek (2013) Biodiversity tradeoffs and
offsets in impact assessment and decision making: can we stop the loss?, Impact Assessment and
Project Appraisal, 31:1, 24-33, DOI: 10.1080/14615517.2012.736763

To link to this article: https://doi.org/10.1080/14615517.2012.736763

Published online: 21 Nov 2012.

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Impact Assessment and Project Appraisal
Vol. 31, No. 1, March 2013, 24–33

Biodiversity tradeoffs and offsets in impact assessment and decision making: can we stop
the loss?
Susie Brownliea*, Nicholas Kingb and Jo Treweekc
a
deVilliers Brownlie Associates, 21 Menin Ave, Claremont, 7708, South Africa; bSouth Africa
c
Treweek Environmental Consultants, Devon, England
(Received 1 August 2012; final version received 2 October 2012)

The healthy functioning of ecosystems is fundamental to human wellbeing, but sustainable development policies have failed
to reverse global decline in biodiversity and ecosystem services. Accepting loss of biodiversity as a tradeoff for socio-
economic gains means that the global ecological deficit continues to grow, with attendant risks for human wellbeing. While
impact assessment has become more effective at identifying potential impacts on biodiversity, it has generally retained a
‘damage limitation’ focus, rather than striving to sustain, or even enhance, important biodiversity and ecosystem services.
This paper recommends changes in how biodiversity is addressed in impact assessment to avoid increasing the ecological
deficit. It considers whether, and how, integration of biodiversity offsets, namely measurable conservation outcomes to
compensate for significant residual loss of biodiversity, can achieve ‘no net loss’ outcomes for biodiversity. It also reviews
some of the implementation challenges. These challenges include obtaining the information needed to assess impacts on
biodiversity and ecosystem services at appropriate spatial and temporal scales, and recognizing when impacts might be
impossible to offset or compensate in practice, thus setting limits to tradeoffs.
Keywords: biodiversity offsets; ecosystem services; compensation; tradeoffs; mitigation hierarchy

Introduction 5th Global Environmental Outlook (UNEP 2012) of the

Impact assessment is intended to inform decision making
and support progress towards sustainable development. It
requires consideration of mitigation measures, but seldom
makes important tradeoffs explicit.
The planet’s ecological carrying capacity and human
needs, quality of life and equity are central to definitions of
sustainable development (e.g. Goodland and Daly 1996;
Holdren et al. 1995). Progress towards sustainability
requires recognition of the interdependence of human
wellbeing and environment, and efforts to ensure mutually
reinforcing gains on all fronts when development is
planned (Gibson et al. 2005; Gibson 2006). However,
despite the fact that many countries have pursued
sustainable development policies for some time and
introduced formal environmental impact assessment (EIA;
and in some cases, strategic environmental assessment or
SEA) requirements, progress against key indicators of
sustainability has been poor: overall levels of poverty have
increased despite economic growth, and the condition of
natural resources and ecosystems has continued to decline
(e.g. English 1999; Raworth 2012; UNEP 2010, 2012).
Global studies tracking the state of the natural
environment have shown failure to reach sustainability
goals and targets, and highlight continuing decline in
biodiversity and ecosystems. They include the 2005
Millennium Assessment (MA 2005), the IUCN’s Red Data
listing process (www.iucn.org) and the World Wildlife
Fund’s bi-annual Living Planet Index (2012), the Fourth
Assessment Report of the Intergovernmental Panel on
Climate Change (IPCC 2007) and various updates, the
Third Global Biodiversity Outlook (UNEP 2010) and the
United Nations Environment Programme, and Röckstrom
et al.’s (2009) ‘safe operating space for humanity’. Much
‘development’ continues to degrade the functioning of
natural systems, placing large numbers of people in
vulnerable positions of compromised health, wellbeing
and livelihoods. This suggests that inappropriate tradeoffs
are being made, with gains in some areas taking place at
the expense of biodiversity and ecosystem services (BES).
A principal consideration is the balance between different
types of capital: financial, natural, produced, human and
social (Goodwin 2003). ‘Weak sustainability’ allows
natural capital to be traded for other forms of capital,
contrary to arguments for ‘strong sustainability’ that the
maintenance of natural capital at or above current levels
is the enabling condition for achieving sustainability
(e.g. Costanza and Daly 1992; Sadler 1996).
‘Sustainability assessment’, as advocated by Gibson
et al. (2005), Gibson (2006) and Bond et al. (2012), is a
recent and distinct framing of impact assessment that
is applicable to a range of practice, from strategic to
project levels (Bond et al. 2012). It involves the use of
sustainability criteria and rules to guide tradeoffs and
improve outcomes in terms inter alia of social – ecological
system integrity, livelihood sufficiency and opportunity,
intra- and inter-generational equity, resource maintenance
and efficiency, socio-ecological civility, precaution and
adaptation, and immediate and long-term integration;
ecological considerations are central to most of these
criteria.
With respect to biodiversity, the Business and
Biodiversity Offset Programme (BBOP) Standard for

*Corresponding author. Email: susie.brownlie@dbass.co.za

ISSN 1461-5517 print/ISSN 1471-5465 online
q 2013 IAIA
http://dx.doi.org/10.1080/14615517.2012.736763
http://www.tandfonline.com

biodiversity offsets (BBOP 2012a) and the International
Finance Corporation’s Performance Standard 6 (IFC 2012)
require ‘no net loss’ (NNL), or ‘net gain’ outcomes for
biodiversity in certain circumstances. Rajvanshi et al.
(2011) call for an approach that delivers ‘net benefit’ for
biodiversity beyond NNL, or ‘ecological enhancement’.
While we concur with the intent expressed, the
achievement of net gain or NNL is extremely challenging
in practice.
Tradeoffs occur in development when two or more
conflicting objectives are being pursued in a situation
where resources are limited, and result in a specific
negative outcome being exchanged for another positive
outcome in time and/ or space (Wright and Burns 2007).
Both sustainability assessment and the BBOP Standard
recognize that tradeoffs may be inevitable, but that some
tradeoffs would be considered unacceptable.
In this paper we examine BES tradeoffs in impact
assessment and decision making, in working towards
sustainability. We discuss the challenges of taking due
account of biodiversity at different spatial and temporal
scales, of achieving equitable benefits from ecosystem
services, and the risks associated with tradeoffs in the
context of the current standards of EIA practice. We
conclude with recommendations for impact assessment
practice, to improve decisions involving BES tradeoffs.
Biodiversity, ecosystem services and sustainable
development
Biodiversity is described as ‘the life insurance of life itself’
(CBD 2005). The quest for sustainability must recognize
the ‘ecological limits on human systems and the inherently
ecological nature of the human enterprise’ (Burger et al.
2012, p. 6). The economic benefits of biodiversity and the
growing costs of biodiversity loss are drawing increasing
attention (e.g. TEEB 2010a). The importance of biodiver-
sity in ecosystem resilience, sustaining desirable ecosystem
states and helping to maintain multiple ecosystem services
in the face of change is widely recognized (e.g. Cardinale
et al. 2012; Carpenter et al. 2006; Hannah 2011; The Royal
Society 2008; TEEB 2010b).
The exploitation of natural resources has resulted in
substantial gains in human wellbeing and economic wealth
but an ongoing decline in natural capital (e.g. World
Wildlife Fund 2012). Of the 24 ecosystem services
assessed in the Millennium Ecosystem Assessment, 15
were in serious decline and five hung in the balance (Irwin
and Ranganathan 2007). The IPCC (2007) predicts that the
resilience of many ecosystems is likely to be exceeded this
century. Recent analyses suggest that three Earth-system
processes (climate change, rate of biodiversity loss and
interference with the nitrogen cycle) have transgressed
the ‘safe boundaries’ for humanity; other boundaries are
being approached (Rockström et al. 2009). According to
Cardinale et al. (2012), the impacts of diversity loss on
ecological processes might be sufficiently large to rival the
impacts of many other global drivers of environmental
change. Despite this growing recognition, the associated
Impact Assessment and Project Appraisal 25
risks and costs of BES loss are barely reflected in decision
making or impact assessment practice.
While it is generally accepted that the consequences of
biodiversity loss will be severe on many fronts (e.g. TEEB
2010a) it is not yet clear how best to control that loss and
direct conservation effort; there is no simple or linear
relationship between biodiversity and ecological function
or ecosystem services (Cardinale et al. 2012). Importantly,
direct, cumulative local-scale changes are triggering
indirect, global-scale change; ‘biological forcing’ on one
scale can cause a critical transition to occur on another
scale as impacts accumulate (Barnosky et al. 2012). For
impact assessment at strategic and project levels to be
effective as a tool, it is essential to be able to recognize
when critical tipping points are being reached and address
impacts that are individually insignificant but collectively
damaging. This issue has proved intractable; beyond
general recognition of the risks associated with biodiver-
sity decline, clear thresholds have proved elusive. The
alternative strategy is to take a precautionary approach
strongly grounded in achieving NNL of biodiversity as a
minimum, using impact assessment to ensure that the
scope of BES specialist studies is adequate and that the
mitigation hierarchy is rigorously applied to avoid
inappropriate tradeoffs; that is, ‘sequentially avoiding
impacts, minimizing impacts, and compensating for
remaining unavoidable impacts’ (US EPA 1995).
Tradeoffs involving loss of biodiversity and ecosystem
services
Tradeoff rules have been proposed for decision making in
the context of sustainability assessment (Gibson et al.
2005; Gibson 2006): maximizing net gains and avoiding
any significant adverse effects unless the alternative means
accepting even more significant negative impacts;
protecting the future; and requiring explicit justification
for tradeoffs in an open process, placing the burden of
justification for tradeoffs on the tradeoff proponent.
Environmental management decisions are matters of
societal choice. They are expressions of preference, values
and understanding, and need to be discussed, made and
justified openly as public judgments (e.g. Gibson 2006). The
emphasis in sustainability assessment on seeking gains on
all fronts points to the need to avoid tradeoffs to the extent
possible; Gibson et al. (2005) also advocate restricting
cross-category tradeoffs to discourage crude balancing.
Over the past two decades, advances have been made in
ecosystem services science, tools and decision making
approaches (Sukhdev 2009), frameworks for quantifying
the tradeoffs associated with alternative scenarios and
choices (Ehrlich et al. 2012), and in studies on biodiversity,
ecological function and services (Cardinale et al. 2012).
While these studies and new tools are useful when data are
available and impacts are quantifiable and predictable, they
are far less useful for processing tradeoffs associated with
‘directional’ rather than absolute policy issues (Wright and
Burns 2007); working towards sustainability is one such
example. Importantly, ‘non negotiables’ in tradeoffs must
26 S. Brownlie et al.
be clarified, rejecting the notion of full intersubstitutability
of capital; all tradeoff decisions should be based on an
understanding of environmental resources that are ‘critical’
for sustainable development. At present, much integrated
assessment does not identify these ‘non-negotiables’
(Wright and Burns 2007), although Morrison-Saunders
and Pope (2012, p. 4) state that, ideally, ‘non-negotiable’
impacts would be established ‘as part of the identification
of sustainability goals and criteria’ for the specific case and
context.
Tradeoffs in ecosystem services either mean accepting
loss of a particular ecosystem service or reducing one or
more ecosystem services over time and space to increase
others. There are options for some substitutability in
making tradeoffs between ecosystem services, but caution
must be taken concerning irreversible processes that might
cause a decrease in wellbeing (UNU-IHDP and UNEP
2012). Shifting ecosystem services inevitably implies
changes in biodiversity and may affect rates of biodiversity
loss. While a number of recent studies have tackled the
valuation of provisioning services, there is less information
on regulating services, and a dearth of information on the
value of many cultural services (TEEB 2010b). Tradeoffs
favour provisioning services; supporting services are more
likely to be ‘taken for granted’ (Rodriguez et al. 2006). The
evaluation of the impacts of tradeoffs between ecosystem
services is thus incomplete at best.
There is indisputably a need to work towards ‘desired
sustainable futures’ (Gibson 2006), but the challenge of
weighing up the disparate desires of different groups is not
trivial. Rather than having shared values and common aims,
societies are becoming increasingly heterogeneous and
differentiated; this rising pluralism aggravates problems of
equity (Rittel and Webber 1973) and poses a question
central to sustainability assessment and tradeoffs: who
decides ‘societal values’, both now and for future society?
Making tradeoffs is akin to taking the benefits here and
now, while transferring the costs to others, later and
elsewhere (e.g. Slootweg et al. 2010), and may result in a
‘some win, others lose’ scenario (McNeill 2007). Values
are linked to stakeholders; different ecosystem services
have different stakeholders at different spatial scales with
potentially conflicting social, financial or economic and/ or
ecological values (Slootweg et al. 2010). The costs and
benefits of ecosystem degradation are often not equitably
distributed; the benefits go to ‘the more concentrated
winners’ and the costs to the ‘more diffuse losers’ (Irwin
and Ranganathan 2007, p. 24). The need to incorporate
technical and value-based priorities in comparing devel-
opment options, and to evaluate tradeoffs associated with
each option, is thus crucial to biodiversity outcomes
(Failing and Gregory 2003). Tradeoffs are complicated by
the need to take into account not only the views and
preferences of current generations, but also of future
generations and absent stakeholders (UNEP 2006).
Linked to the challenge of equity in decisions on BES
is the issue of scale; for example, local vs global interests.
Because local ecosystems are embedded in the global
system, the flows of critical resources that sustain socio-
economic systems at these scales are jeopardized by
unsustainable consumption at the scale of the biosphere
(Burger et al. 2012). As noted by Cardinale et al. (2012,
pp. 65– 66):
many tradeoffs among services occur at very different
spatial and temporal scales. The gains from simplifying
ecosystems are often local and short term, whereas the
costs are transmitted to people in other locations, or to
future generations. For society to make informed choices
about land uses that have mixed effects, the science
linking biodiversity to ecosystem functioning and services
must be extended to explore tradeoffs between services at
multiple temporal and spatial scales so that information
can be incorporated into models of optimal land use.
Humanity as a whole, including future generations with an
interest in the integrity of Earth-system functioning, should
not have to bear the burden of ill-considered tradeoffs that
benefit a few, now, at local scale, and disadvantage many,
potentially forever.
Sustainability assessment appears to be an improvement
in impact assessment practice (e.g. Gibson 2011). However,
significant challenges remain: there is a fear that the pursuit
of integration ‘could dilute attention to ecological
imperatives and other too often neglected concerns, thereby
imperilling some of sustainability’s own objectives’ (Gibson
2006, p. 261). Even where sustainability objectives are
understood, competing interests are likely to reach different
conclusions about which tradeoffs may be justified (Salzman
and Ruhl 2000).
To date, many tradeoffs have been made at the expense
of the environment (Pope et al. 2004). In this context,
offsets are increasingly being seen as a mitigation tool to
achieve NNL of biodiversity and thus to minimize
tradeoffs.
Biodiversity offsets
Offsets are activities which are carried out to mitigate, and
in order to counterbalance, adverse environmental
impacts; the purpose is to achieve a ‘no net environmental
loss’ or a ‘net environmental benefit’ outcome (Suvantola
2005). They may be ‘in kind’ or ‘like for like’ (loss and
gain in the same attribute), ‘out of kind’ (loss of one
attribute, gain in another ‘substitute’ attribute), or ‘like for
better’ or ‘trading up’ (loss of one attribute, gain in another
attribute of greater societal importance) (BBOP 2012b).
Biodiversity offsets are defined (BBOP 2012a, p. 13)
as:
measurable conservation outcomes resulting from actions
designed to compensate for significant residual adverse
biodiversity impacts arising from project development after
appropriate prevention and mitigation measures have been
taken. The goal of biodiversity offsets is to achieve no net
loss and preferably a net gain of biodiversity on the ground
with respect to species composition, habitat structure,
ecosystem function and people’s use and cultural values
associated with biodiversity.
The NNL and preferably ‘net gain’ goal of biodiversity
offsets is supported by many voluntary organizations and
professional bodies (e.g. IAIA 2005; IEEM 2006), some
country policies (e.g. the United States), reflected in
performance standards of major financial institutions
 Impact Assessment and Project Appraisal 27

Table 1. Differences between offsets and compensation, and tradeoff implications.

Term Target of action Tradeoff implications

‘Offset’ All values and related key biodiversity components
addressed. Explicit objective of achieving NNL or
net gain in amount or type of biodiversity. Losses
owing to residual impacts and gains owing to offsets
are compared using the same currency.
‘Compensation’: (1) Exchanges involve same type of biodiversity but
a spectrum of options accept substitutions in time and space. Losses and
gains are not compared explicitly to ensure NNL.
(2) Substitutions in type of biodiversity, but still within
natural capital, in time and space.
(3) Substitutions between different types of capital,
in time and space.
Should be negligible if offsets are designed to
achieve an ‘in kind’, ‘like for like’ exchange of
biodiversity and can be successfully delivered
‘on the ground’ in appropriate timeframes and
spatial scales.
Potentially significant BES loss; the scale of
losses may not be clear.
as above
Probable significant BES loss; the scale of
losses may not be clear.

(e.g. IFC 2012), and multinational businesses (e.g. Rio
Tinto’s goal1 is a ‘net positive impact on biodiversity’).
The goal in mitigating impacts on ecosystem services is
similar: impacts should be compensated to ensure that the
benefits derived from ecosystem services are enhanced or
at the very least maintained (Landsberg et al. 2011). The
use of biodiversity offsets is growing rapidly, with a
proliferation of methodologies: there are already well over
100 different loss –gain methods used to look at habitat
and species offsets (BBOP 2012b).
However, the boundaries between compensation,
offsets and other mitigation measures are often blurred
(e.g. Darbi et al. 2009), and they imply tradeoffs to
a greater or lesser extent. Biodiversity offsets deal with
exchanges in type, time and space; in order to be equitable,
they need to be of the same type, and within a comparable
timeframe and spatial scale (Salzman and Ruhl 2005).
BBOP distinguishes between an ‘offset’ (full compen-
sation that can realistically expect to achieve NNL and
preferably net gain) and other forms of ‘compensation’
(e.g. BBOP 2012a). The difference between these terms is
explained in Table 1. Provided that a ‘like for like’ offset
was based on the full set of values attached to the impacted
BES, was delivered before impacts were experienced and
more than compensated those parties adversely affected by
impacts, tradeoffs should be negligible. ‘Compensation’
reflects potentially significant tradeoffs; it may allow
substitutions for resources being lost and ‘unlike for like’
or ‘out of kind’ exchanges. These substitutions may
involve natural capital (e.g. different habitat) or other
forms of capital (e.g. money for habitat loss).
To ensure equivalent trades in an offset, the metric and
currency used to track biodiversity lost and gained in any
exchange must accurately capture the key components that
current and future society wants to protect. They may be
species, habitat, ecosystems, ecological or evolutionary
processes, or ecosystem services underpinned by
biodiversity.
It is crucial to identify losses and gains using a
consistent approach and reliable evidence so that they can
be compared directly. While offsets should address all
residual impacts, biodiversity surrogates are often used in
offset design since it is rarely possible or practical to take all
components and dimensions of structure and function into
account (BBOP 2012b). Practical constraints such as time,
costs and technical complexity have worked against the use
of sophisticated methodologies and adequate currency and
metrics of exchange (Salzman and Ruhl 2005). Experience
from US wetlands ‘mitigation’ (offsets) is that, although
measures appear to be efficient, the distributional equity
and effectiveness measures are questionable. Biodiversity
offset schemes are also often undermined by a poor track
record of compliance (e.g. Gibbons and Lindenmayer 2007;
Quigley and Harper 2006).
The use of crude currencies, poor biodiversity
surrogates and over-simplified metrics in offsets fails to
account for the significant environmental and social welfare
values across space, type and time (e.g. Walker et al. 2009).
These shortcomings, together with the frequent failure of
restoration as a core offset mechanism to achieve planned
biodiversity gains (Maron et al. 2012), and time lag effects
between offsets and impacts on threatened biodiversity
(Bekessey et al. 2010), means that there is a high risk of
‘invisible tradeoffs’ in each exchange. Even ‘best practice’
offsets involve contraction in area of natural systems at a
wider landscape level (e.g. Gibbons and Lindenmayer
2007). Finding offsets that fully compensate for each and
every residually impacted biodiversity attribute presents a
major challenge; in practice, imperfect or incomplete
offsets are usual in many contexts. Biodiversity offsets at
project level cannot address cumulative adverse impacts on
biodiversity, and given difficulties in measuring indirect
impacts, they are unlikely to be quantified. Unfortunately,
according to Quigley and Harper (2006), offsets are at best
slowing down, not halting, the rate of habitat loss; Walker
et al. (2009, p. 149) concur, stating that ‘Biodiversity offsets
to date have facilitated development while perpetuating
biodiversity loss’. Legitimate concerns exist that an early
focus on biodiversity offsets, rather than their use as a ‘last
resort’ diverts attention from rigorous application of the
mitigation hierarchy in planning, impact assessment and
decision making, with proper emphasis on prior impact
avoidance, minimization and restoration (Walker et al.
2009; Clare et al. 2011).
Biodiversity and ecosystem services in impact
assessment and decision making
Morrison-Saunders and Pope (2012) note that impact
assessment processes involve substantive and process
28 S. Brownlie et al.
decisions that may contribute to tradeoffs. Decisions
involving substantive tradeoffs of BES arise where
negative impacts on BES remain at the end of an impact
assessment process, where studies have not adequately
identified, assessed or mitigated these impacts.
Guiding principles on biodiversity-inclusive impact
assessment (e.g. IAIA 2005; UNEP 2006) reflect
international biodiversity conventions (e.g. CBD) that
aim for conservation and NNL of biodiversity, and
sustainable use and equitable sharing of the benefits
derived from biodiversity. Impact assessment must there-
fore consider effects of development on the use and non-
use values of biodiversity as well as the distribution of costs
and benefits of ecosystem services across different sections
of society, across localities, and over time (TEEB 2010a).
To date, the quality of biodiversity information in EIAs
has been weak (Rajvanshi et al. 2010; Slootweg et al.
2010) and the mitigation hierarchy poorly applied (Clare
et al. 2011; Darbi et al. 2009). The consideration of
cumulative and indirect effects on BES has generally been
poor; this seemingly intractable problem has been
documented for many years (Treweek 1996; Slootweg
et al. 2010). The connections between biodiversity, the
health and livelihoods of dependent communities have, to
date, been superficially addressed if at all, and stakeholder
engagement is often weak (e.g. Rajaram and Das 2007).
Moreover, the values of biodiversity may not be explicitly
recognized by beneficiaries of ecosystem services, thus
being ‘invisible’. While ecosystem services span global to
local scales, stakeholder engagement and impact assess-
ment often look solely at implications for local ecosystem
services.
Ecological considerations are central to sustainability
criteria and tradeoff rules. However, these criteria and
rules generally assume a ‘reliable enough’ information
base for evaluating tradeoffs, although – notably –
emphasizing precaution. In our view, the biodiversity,
ecological function and BES information in impact
assessment is frequently inadequate, providing an unreli-
able basis for the use of biodiversity offsets and informing
tradeoff decisions. Moreover, practical limitations in data
availability and technical expertise in many countries
(e.g. Brownlie and Botha 2009; King et al. 2012)
exacerbate these shortcomings. It is foreseeable that, in
many instances, actions intended as offsets in EIA will
result only in compensation, with ongoing loss of
biodiversity. Clearly, a precautionary approach is crucial.
In addition, independent review would help in giving
quality assurance to ensure that the information for
decision makers is sufficient, scientifically accurate and
addresses all relevant impacts (Rajvanshi et al. 2010).
A precautionary approach to trading biodiversity and
ecosystem services
The need to recognize uncertainty and the limits to our
current knowledge, and apply precaution in decision
making, is stipulated in numerous global texts (e.g. Rio
Declaration: UNCED 1992; Convention on Biological
Diversity: CBD 1992; TEEB 2010a) and impact assess-
ment literature (e.g. Slootweg et al. 2010; Precautionary
Principle Project 2005; Gibson et al. 2005).
The combination of uncertainty, penalty and irreplace-
ability summarizes the challenge to decision making with
regard to the sustainable use and development of natural
systems (Sadler 1996). Simply stated, if there is little
certainty about the consequences of doing something, it
would be prudent to avoid taking any risks that could lead
to irreplaceable loss of natural capital or significant
penalty for human wellbeing.
The cause – effect relationships between biodiversity,
ecological function and ecosystem services are complex
and poorly understood. There are mismatches of scales
at which research on biodiversity, ecological function
and ecosystem services is undertaken, ecosystems are
managed and decisions taken (Cardinale et al. 2012).
Research on biodiversity and ecological function has
routinely ‘measured functions without extending those to
known services’, whereas the BES field has ‘described
services without understanding their underlying ecological
functions’ (Cardinale et al. 2012, p. 63). Impact
predictions are often fraught with uncertainty, as science
cannot yet explain some complex functioning of
ecosystems and biodiversity. The non-linear responses of
ecosystems to changes in, for example, climate, and the
uncertainty about ‘tipping points’ make it difficult to
predict reliably the consequences of actions or change
(TEEB 2010b).
Ecological changes can alter the flow and reliability of
the supply of ecosystem services, changing the vulner-
ability of people; maximizing ecosystem resilience over
time is thus crucial (e.g. Walker et al. 2004). Preserving the
diversity of species and functional groups, and the diversity
of spatial pattern and processes across a wide range of
scales confers resilience and provides ‘insurance’ against
environmental change, particularly when our understand-
ing of ecological and social change is inadequate to predict
what the consequences of our actions will be (Carpenter
et al. 2006; Elmqvist et al. 2003).
Relative to other forms of capital, assets embodied in
ecosystems are poorly understood, scarcely monitored,
typically undervalued, undergoing rapid, unchecked
degradation and recognized ‘only upon their loss’ (Ehrlich
et al. 2012, p. 70). Thus, gaps in our understanding of the
implications of biodiversity loss highlight the need for
a strict precautionary approach and limits to tradeoffs
involving BES.
Limits to what can be traded off or offset
Tradeoff rules have been proposed for decision making in
the context of sustainability assessment, indicating that
tradeoffs would be unacceptable if they entailed further
decline or risk of decline in a major area of concern or
deepened problems in any sustainability requirement area,
or if stronger mitigation resulting in better outcomes might
be feasible. These rules suggest that sacrificing important
long-term gains for minor short-term benefit does not

Figure 1. Limits for offsets, compensation and tradeoffs (adapted from BBOP 2012b).
contribute to sustainability (Gibson et al. 2005; Gibson
2006).
According to Ehrlich et al. (2012, p. 68), ‘In some
senses, the environmental demand pillar of sustainability
is non-negotiable’. Moreover, it is considered imprudent to
assume that suitable technology for replacing whatever
environmental services are lost will become available in a
timely manner and at a needed scale (Holdren et al. 1995):
‘humans have approached or surpassed the capacity of the
biosphere to provide essential and often non-substitutable
natural resources’; ‘For most of them, all known
substitutes are inferior, scarcer, and more costly’ (Burger
et al. 2012, pp. 4, 6). The assumption of ‘strong
sustainability’ in respect of certain important aspects of
natural capital appears consistent with the scientific
evidence and with the suggestion that an assumption of
‘absolute substitutability’ is not realistic (UNU-IHDP and
UNEP 2012). This reinforces the position that limits to
what impacts can be offset must be established; adverse
impacts on critical environmental resources may be
unacceptable because of their significance, scarcity or
irreplaceability (Suvantola 2005).
The need to ensure that biodiversity offsets are not used
to make inappropriate tradeoffs is clearly reflected in new
standards (e.g. BBOP 2012b). Importantly, offsets should
only be considered as the ‘last resort’ in the mitigation
hierarchy (e.g. Morrison-Saunders and Pope 2012). Offsets
are based on a key principle that limits exist to what can be
offset; simply stated, some loss of biodiversity (e.g.
extinction) cannot be compensated, whether because of the
irreplaceability or vulnerability of affected biodiversity,
and/ or because the risks of achieving a successful offset
are unacceptably high (BBOP 2012b, c). These risks relate
mainly to the metrics or currency used, ecological
uncertainty, uncertainty of implementation success and
time lags (BBOP 2012d). Increasing the risk associated
with any one or a combination of these variables points to a
Impact Assessment and Project Appraisal 29
proportionately greater risk of – and need to prevent or
avoid – undesirable tradeoffs (Figure 1). There is no single
definitive limit for offsets; limits need to be determined on
a case- and context-specific basis.
As a rule, impacts that cannot be offset (‘non-
offsetable’) should only be considered permissible in
exceptional cases where there are no feasible alternatives
and where there are ‘imperative reasons of overriding
public interest’ (e.g. Article 6(4) of the Habitats
Directive2). In some instances, it may be decided that
there is no need for offsets. This decision is generally
linked to the conservation status of affected biodiversity or
the ‘insignificance’ of adverse impacts (BBOP 2009).
Three key considerations dominate decisions on limits
to ecosystem services tradeoffs, namely the reversibility
of the change, the substitutability of the reduced services
and the levels of dependence of beneficiaries on these
services. Although challenging to determine precise
limits, increasing the risk of any one or a combination of
these three variables indicates a proportionately greater
risk of – and need to prevent – undesirable tradeoffs
(Figure 1).
Implications for impact assessment
Impact assessment alone cannot resolve global challenges
of biodiversity loss and deterioration of ecosystem
services that underpin human wellbeing; these issues
must be dealt with at a strategic political level. To this end,
however, we believe that a commitment across the
planning spectrum, and in impact assessment at strategic
and project levels to ‘net gain’ for BES from development,
is crucial.
Despite pressure to facilitate economic growth, we
believe that there is a need for the utmost precaution in
tradeoffs involving biodiversity, given the history of poor
EIA practice regarding BES, limitations in our knowledge
30 S. Brownlie et al.
and understanding of biodiversity, ecosystem functioning
and resilience, and ecosystem services, the difficulty in
reconciling values between different groups at different
scales, and the risk of significant consequences for human
wellbeing at global to local scales.
The practice of biodiversity offsets is growing rapidly.
However, there are many concerns about their use (e.g.
Walker et al. 2009; Maron et al. 2012). We believe that it is
essential to clarify the desired outcomes for BES and the
appropriateness of different forms of tradeoffs in a
sustainability context, and to set limits accordingly.
Ideally, planning policy should articulate a ‘net gain’
outcome and clear parameters for dealing with BES
tradeoffs in impact assessment. Moreover, priorities and
‘irreplaceables’ for BES should be made spatially explicit
to direct future development, inform best application of
the mitigation hierarchy (e.g. avoidance vs offsets) and
focus offsets and compensation effort (e.g. Kiesecker et al.
2009). Crucially, the way in which impact assessment
addresses BES must be substantially improved if ongoing
loss is to be curtailed, and ideally reversed. Towards this
end, we recommend:
(1) Aiming for ‘net gain’ outcomes for BES – given
uncertainties and risks associated with further loss of
biodiversity and the implications for ecosystem
services delivery, resilience and our ability to adapt
to climate change, NNL is believed to be the ‘bare
minimum’ and a ‘net gain’ outcome optimal. We
recognize that this objective needs to be embedded in
policy and planning, but we believe that process and
substantive decisions within EIA should support this
goal (Figure 2).
(2) Applying the full mitigation hierarchy and iteratively
considering feasible alternatives that would prioritize
Figure 2. The mitigation hierarchy, offsets, compensation and enhancement.
avoidance or prevention of impacts that could not
confidently be offset or compensated.
(3) Addressing non-offsetables and the ‘no go’ alterna-
tive – impacts on biodiversity that are likely to be
‘non offsetable’ must be identified at the earliest
possible stage of the planning process by biodiversity
specialists, and impacts on ecosystem services for
which adequate compensation is improbable (Figures
1 and 2) must be identified collaboratively by social
and biodiversity specialists, engaging stakeholders to
ensure that their values are taken into consideration.
‘Non-offsetable’ impacts, and impacts on ecosystem
services that cannot be compensated, constitute ‘non-
negotiables’ that must be excluded from tradeoffs.
They must be avoided or prevented, or, if this is not
possible and they are of sufficient magnitude, they
should determine that the ‘no go’ alternative is
selected.
(4) Identifying whether or not there is a need for offsets or
compensation during the scoping phase of the EIA,
drawing both on biodiversity and social specialists’
input on the potential significance of impacts, and on
stakeholder values.
(5) Assessing impacts at relevant scales – assessment of
impacts on BES must be undertaken by relevant
technical specialists, taking into account trends in
loss, direct, indirect and cumulative effects in
different timeframes (from short to long term) at
local to global (Earth system) scales, and addressing
ecological function and resilience in addition to
ecosystem services.
(6) Engaging stakeholders to identify the values attached
to BES at different spatial scales must be rigorous.
A precautionary approach must be taken where there
is uncertainty about predictions or outcomes, and/ or

where stakeholder engagement may be inadequate to
identify reliably these values.
(7) Requiring offsets, rather than weaker forms of
compensation (Table 1), where biodiversity impacts
are unavoidable and fall within the range of impacts
that can reliably be offset (Figure 1).
(8) Compensating impacts on ecosystem services –
where impacts on ecosystem services are not
irreversible, full and fair compensation should be
provided for parties who benefit from these services.
Compensation should aim to be ‘in kind’ to avoid
further loss of biodiversity and minimize tradeoffs.
(9) Involving ‘the right’ specialists and using appro-
priate metrics – ‘offsetable’ impacts on biodiversity
and negative impacts on BES that must be
compensated must be identified and explicitly
addressed by relevant specialists using metrics and
currency that accurately account for all of the key
biodiversity components being impacted (Figures 1
and 2). Precaution is needed when determining the
outcomes of minimization or rehabilitation/restora-
tion actions to avoid underestimating the quantum of
negative impact and/or offset required. Best available
guidance on offsets should be used (e.g. BBOP
2012).
(10) Using independent review and validation – inde-
pendent review of specialist studies on BES gives
additional assurance that decisions about offsets,
compensation and/or tradeoffs are in the best
interests of sustainability. The design of offsets and
compensation should be independently validated by
relevant experts to give assurance that all key
biodiversity components and values have been
addressed using appropriate currency and metrics,
taking into account uncertainties, risks and time lags,
and equity in the proposed exchange;
(11) Requiring assurance of the success of the offset and
follow-up compliance before a decision is taken on
the proposed development; where insufficient
assurance can be provided, a ‘no go’ or other
alternative should be selected. Sufficient provision
must be made, and guarantees given, for the legal,
technical, financial and other human resource aspects
required for successful and equitable implementation
of offsets and compensation within a set timeframe.
A ‘beyond reasonable doubt’ assurance should be
required in cases where impacts are likely to be
significant and where there are risks of irreplaceable
loss of biodiversity or irreversible impacts on
ecosystem services.
(12) Fully disclosing tradeoffs – explicit attention must
be drawn in the EIA to the tradeoffs associated with
the proposed development, describing impacts on
biodiversity that cannot be offset but only compen-
sated, the type and any substitution implicit in the
exchange, as well as tradeoffs likely to result in
irreplaceable loss of biodiversity and/ or irreversible
impacts on ecosystem services.
(13) Finally, following up – implementation of offsets
and compensation must be monitored to inform
Impact Assessment and Project Appraisal 31
performance and adaptive management. Independent
auditing of offsets and compensation is required over
the long term.
Notes
1. http://www.riotinto.com/ourapproach/17194_environmental
_stewardship.asp (accessed 1 August 2012).
2. Directive 92/43/EEC of 21 May 1992.
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