Net Present Biodiversity Value and the Design of Biodiversity Offsets
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There is an urgent need to develop sound theory and practice for biodiversity offsets to provide a better basis for offset multipliers, to improve accounting for time delays in offset repayments, and to develop a common framework for evaluating in-kind and out-of-kind offsets. Here, we apply concepts and measures from systematic conservation planning and financial accounting to provide a basis for determining equity across type (of biodiversity), space, and time. We introduce net present biodiversity value (NPBV) as a theoretical and practical measure for defining the offset required to achieve no-net-loss. For evaluating equity in type and space we use measures of biodiversity value from systematic conservation planning. Time discount rates are used to address risk of non-repayment, and loss of utility. We illustrate these concepts and measures with two examples of biodiversity impact–offset transactions. Considerable further work is required to understand the characteristics of these approaches.
KeywordsNet present value Conservation planning Time discounting Benefit functions No-net-loss
S. Walker improved the manuscript, and A. Austin edited the manuscript. J.M.O. was funded by the Biodiversity Offsets Programme, a Cross Departmental Research Pool science program and by the FRST Capability research fund. Comments from two anonymous reviewers improved the manuscript.
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