Ecological compensations

An addition to the policy instrument mix

The basic idea of ecological compensation (biodiversity offsetting) is simple: whenever developers degrade biodiversity, an improvement in biodiversity must be provided elsewhere so that the lost ecological value is compensated. Offsets are designed to compensate for unavoidable biodiversity loss only: in accordance with a mitigation hierarchy, developers must always avoid and minimise harm and restore biodiversity on the development site first. Some impacts are impossible to compensate, and offsetting cannot be applied to extremely vulnerable habitats and endangered species. Ecological compensations can be mandatory or voluntary. A common objective for ecological compensation is no net loss of biodiversity, but especially in voluntary cases, an objective can also be partial compensation. Compensatory measures must be additional to existing biodiversity conservation efforts: restoration or nature protection can only be counted as compensation if they would not have been produced otherwise.

Kuva: Riku Lumiaro

‘Spoiler pays’ principle to biodiversity conservation

Ecological compensation resembles the ‘polluter pays’ principle, as the party responsible compensates the damage caused. The developers needing offsets can carry out compensatory measures themselves or purchase them from a landowner who produces ecological gains. Compensatory measures can include restoring degraded habitats, and, in some cases, preserving existing valuable ecosystems. Also companies who indirectly degrade biodiversity can compensate their adverse impacts.