Clive Palmer’s China First Coal Project is entering the last stages of review for its proposed coal mine in Queensland’s Bimblebox Nature Refuge. As part of the Supplementary Environmental Impact Statement (SEIS), the proposal suggests protecting about two hectares of remnant bush for every one hectare of the nature refuge that is affected by the mine. That sounds like we’re getting two for one - but biodiversity offsets aren’t that simple.

Biodiversity offsetting is an increasingly popular means to balance out the impact developments have on the environment. Just as many of us will purchase a carbon offset to compensate for the emissions we generate when we take an overseas flight, biodiversity offsetting aims for “no net loss” of biodiversity values from a development project.

Like carbon offsets, biodiversity offsetting is a controversial topic. Recent media in the UK has highlighted how contentious it can be, with the UK government’s trial of its new biodiversity offsetting scheme decried by some as “a license to trash nature”.

One of the problems for biodiversity offsetting is working out whether “no net loss” is actually being achieved. Despite the widespread and growing use of offsets, very little evidence is available to demonstrate what those offsets deliver.

A recent paper is one of few to evaluate the outcomes from a biodiversity offset. When frog habitat was destroyed during development in Sydney Olympic Park, more habitat was created as an offset. The authors monitored the population size of the vulnerable green and golden bell frog (Litoria aurea) before and after development. They found that an area of habitat 19 times larger than the habitat area affected had to be created to ensure there was a no net loss of frogs.

This is an example of an offset working. But the amount of habitat that had to be created relative to the habitat lost (known as the “offset ratio”) was 19:1 - much greater than initially expected, and this was only discovered after intensive monitoring over more than a decade.

Often, proposed offset ratios are closer to 2:1, such as what has been proposed for the loss of the 8,000 hectare Bimblebox Nature Refuge. Is this enough? We can estimate whether an offset ratio is likely to be sufficient by calculating its conservation benefit.

To do this, we need to know two things: what is the risk the offset habitat would be lost if we don’t protect it? And what is the risk of its loss if we do protect it?

We’ll assume that the risk of loss of the offset site is about 1% over the next 20 years (based on the current rate of loss of remnant vegetation in Queensland). If the offset site is protected, we assume the risk of loss is zero (although this might be a bit optimistic).

The difference between the expected area of the offset site with protection, and the expected area of the offset site without protection, must equal the impact of 8,000 ha if we are to achieve no net loss. Based on this model, about 800,000 hectares would need to be protected to offset the loss of Bimblebox Nature Refuge. That means an offset ratio closer to 100:1!

http://onlinelibrary.wiley.com/doi/10.1111/j.1442-8903.2007.00328.x/abstract

We make a number of assumptions to get this figure, like the risk of losing a patch of remnant bush if is unprotected or protected. If, for example, we had considered regrowth vegetation with its 20-year risk of loss at about 10%, this would bring the offset ratio down closer to 10:1 (although the quality of the offset would be lower).

But even with the most generous assumptions, a simple exchange of two hectares protected for every hectare destroyed is unlikely to achieve a no net loss outcome in our example. Unfortunately this illustrates that in many cases, we are pushing the limits of what can realistically be considered “offsettable”.

With any major development, the proponent must detail in its Environmental Impact Statement how threatened environmental values contained within the project area (in this case, within Bimblebox) are to be avoided, mitigated, rehabilitated or offset. The total sum of offsets required by State and Federal policies for individual environmental values, such as the black-throated finch and the koala, may provide a very large offset area when combined. But without calculating the conservation benefit of offsets like we have here, its not clear whether it will be enough to achieve no net loss.

If the China First Coal Project goes ahead, it will be the first time an entire protected area is lost to development in Australia, so there’s currently no policy that requires an offset for a protected area in its own right. Based on our example, a 2:1 offset would likely not achieve the “no net loss” standard for the loss of Bimblebox Nature Refuge.

Ultimately, governments can revoke the protected status of any conservation area, and compensation isn’t necessarily required. The question is whether the Australian public considers the loss of publicly-funded conservation areas to be a fair exchange for the benefits provided by a development. But to make this judgement, we need to fully understand and acknowledge the limitations of biodiversity offsetting. Otherwise, we may unknowingly accept an exchange that could result in the loss of effectively irreplaceable biodiversity.