Conservation decisions all involve assumptions about what would happen in absence of a particular intervention. Judging the benefit of a given conservation intervention relies equally on envisaging the future in which the intervention occurs, and the future in which it does not—that is, the counterfactual scenario (Box 1; Ferraro and Pattanayak, 2006, Maron et al., 2013). For example, the expected benefit from gazetting a new protected area implicitly assumes some probability that biodiversity in that location would ultimately be lost in absence of protection (Wilson et al., 2005).Defining baselines.
Counterfactual scenario: the scenario expected to occur in the absence of some defined action or set of actions. The counterfactual scenario cannot be directly observed and must be inferred by reference to control locations.
Baseline: a state or trajectory (e.g., of a system) used as a comparator. The term is used in many contexts: shifting baseline is often used to refer to the way in which our concept of what is ‘normal’ or ‘pre-impact’ changes over time (e.g. Papworth et al., 2009, Pauly, 1995); baseline data often refers to data that reflect the starting-point or reference state of a system before some expected perturbation (or restoration) (e.g. Downs et al., 2011); a baseline site can refer to a ‘control’ or ‘reference’ site in an experimental design or natural experiment (e.g. Brinck and Frost, 2009, Golding et al., 1997); a baseline trajectory is a counterfactual trajectory that describes how a system is expected to behave in the absence of some perturbation or action (e.g. Costa et al., 2000).
Crediting baseline: a counterfactual scenario against which the benefit derived from an action is measured (Angelsen, 2008). In this paper, it refers to the baseline against which offset credit is calculated.
Declining crediting baseline: a crediting baseline that represents an expectation of declining biodiversity over time in the absence of the action that is intended to generate a benefit (in this case, in the absence of the offset action).
Debiting baseline: a counterfactual scenario against which the impact of an action is measured.
Static/dynamic baseline: a baseline can be either a fixed (static) value, or a (dynamic) baseline, the value of which changes with time (Costa et al., 2000).
Specifying the counterfactual scenario is critical, as without it, the extent to which outcomes are attributable to the conservation intervention cannot be known (Ferraro, 2009). The assumed counterfactual scenario or baseline (Box 1; Angelsen, 2008, Ferraro, 2009) can be extremely influential in calculation of the benefit of a conservation intervention as it determines the reference against which gains are measured (Bull et al., 2014a, Ferraro and Pattanayak, 2006, Maron et al., 2013). Yet counterfactual scenarios are often ignored in calculating conservation benefits, and when they are used, they are rarely explicitly described or justified in terms of their plausibility, were the intervention not to occur (Ferraro, 2009, Miteva et al., 2012).
This issue has started to receive more attention, with discussion in the literature around appropriate counterfactuals for evaluating the outcomes of conservation interventions increasing in recent years (Bull et al., 2014a, Ferraro and Pattanayak, 2006, Maron et al., 2013). A particular focus has been on biodiversity offsetting, which is emerging as one of the most rapidly-growing and controversial conservation approaches—and one in which baseline assumptions play a central role (Bayon and Jenkins, 2010, Whiteman et al., 2010). The core principle behind biodiversity offsetting is that of ‘no net loss’, whereby conservation benefits generated at a site must compensate fully for any impacts on biodiversity at another site. The question remains, however: no net loss compared to what (Salzman and Ruhl, 2010, Virah-Sawmy et al., 2014)? In order to identify whether gains at an offset site are indeed equivalent to a given loss, plausible counterfactual scenarios must be developed against which both the expected gains at the offset site and the losses at the impact site can be estimated. The counterfactual scenario against which offset gains are measured is the ‘crediting baseline’ (sensuAngelsen, 2008; Box 1; Fig. 1).
Gordon et al. (2011) and Bull et al. (2014a) have demonstrated that the choice of crediting baseline is a fundamental determinant of whether a biodiversity offset policy delivers its intended biodiversity outcomes. They show how different but plausible baselines could lead to either a net loss or a net gain, relative to ‘business as usual’. Specification of crediting baselines is therefore a particularly high-stakes exercise for biodiversity offsetting, because the estimated gains from an offset determine the amount of losses that can occur elsewhere (Gordon et al., 2015). Thus, ensuring baselines are appropriate is arguably more critical in offset exchanges than for other types of conservation decisions (such as prioritising properties for land stewardship payments), where overestimation of benefits is not linked to equivalent losses (Fig. 1; Gordon et al., 2015).
A crediting baseline that assumes no change in biodiversity over time in the absence of the offset action allows credit to be generated only by ‘restoration gain’ resulting in improvement in habitat values at a site over time (Maron et al., 2012). However, most baselines used for generating offset credit assume (often implicitly) that there will be a decline in biodiversity over time in the absence of the offset action (Pawliczek and Sullivan, 2011, Salzman and Ruhl, 2010). Where such declining baseline scenarios are used, it is possible to generate offset credit via ‘averted loss’ (Maron et al., 2013), whereby the conservation benefit of an offset is derived from a reduction in the loss of biodiversity, relative to what would have been likely to occur in absence of the offset.
Despite their importance for determining whether biodiversity benefits gained through offset exchanges are commensurate with the losses associated with a development impact, crediting baselines are rarely explicitly stated. However, offset policies often permit the generation of at least some offset credit through protecting biodiversity that already exists without making any other improvements (Brown et al., 2014, U.S. Fish & Wildlife Service, 2003, Wilcove and Lee, 2004). In these cases, it can be inferred that a declining crediting baseline is assumed, either implicitly or explicitly, to allow the generation of the averted loss credit.
The use of a declining crediting baseline in offsetting involves some risks (Angelsen, 2008, Gordon et al., 2015). Critically, the consequence of specifying a crediting baseline in ‘no net loss’ biodiversity offsetting is the maintenance of that baseline. This is because maintenance of the baseline trajectory becomes the target net outcome from offset trades. Thus, a baseline of decline effectively locks in that decline as the net effect of impact-offset exchanges (assuming the debiting baseline [Box 1] is similar) (Gordon et al., 2015).
Nevertheless, there are circumstances in which an assumption of background decline of biodiversity is realistic (Kormos et al., 2014), and in these situations averted loss offsets could potentially result in better outcomes from offsets than restoration offsets only, which often have a high risk of failure (Maron et al., 2012). For example, if a species’ decline is due to an introduced predator, that decline would therefore be expected to continue even in the absence of any development impact. However, the use of an implausibly steep baseline of decline results in exacerbating biodiversity loss, as the net outcome from impact-offset trade is to maintain this overly steep baseline of decline (Gordon et al., 2015). Whilst concerns about poorly-constructed crediting baselines have been raised elsewhere, the extent to which steep declining baselines are embedded in currently active offset policies, and the discrepancies between such baselines and more plausible counterfactuals, have not yet been explored.
In this paper, we examine the often-implicit assumptions about crediting baselines in a range of offset policies, in order to reveal the designed-in consequences of offset trades for biodiversity. We explore this issue for a country considered well-advanced in offset policy implementation: Australia, which has biodiversity offset policies in operation (or in development) nationally, in each of its six States and two Territories, and in some Local Council regions (McKenney and Kiesecker, 2010). Specifically, we (1) explore the extent to which a baseline from which to measure offset gains is clearly articulated for nine offset policies in eight Australian jurisdictions; (2) for cases where a baseline is not explicitly stated, we explore whether a declining baseline is implied based on the rules specified for calculating offset credit under that policy and/or actual offset trades that have occurred, and if so, estimate the implied rate of decline; and (3) compare the baseline rates of decline to recent rates of vegetation loss for each of the jurisdictions to identify the degree to which the decline assumptions inherent in the policy correspond to available evidence of vegetation loss.
