The concept of offsetting environmentally damaging practices, like emitting carbon dioxide, has met with mixed reviews. But the success of the voluntary offset market in the United States, coupled with the strong compliance market overseas, demonstrates that many believe in the positive effects of carbon offsets. Fueled by offset dollars, projects that reduce or avoid CO2 emissions have been popping up steadily.
However, an even more controversial form of offsetting has emerged: biodiversity offsets. Companies like Shell and Rio Tinto, a large mining company, often harm wildlife habitats in the course of their projects. Once attempts to restore the project site to its former natural state have been exhausted, they have experimented in funding other wildlife conservation projects elsewhere. In the same sense as offsetting CO2 emissions, these projects offset residual damage to one area by conserving another.
Proponents of the setup assert that conservation projects can often be implemented more cost-effectively elsewhere, and would increase the overall focus on biodiversity from the private sector. Opponents point out that wildlife conservation is an intensely local process, with no two habitats exactly alike. This makes it extremely difficult to quantify the environmental benefit of biodiversity offset projects, and calls into question an offsetting scheme designed for undifferentiable emissions of CO2.
For any offset scheme to work, it needs to have many participants. If biodiversity offsets are ever to make real improvements in wildlife conservation, they must gain traction within the larger environmental community, not to mention among the worst offenders in the private sector. Like other market-based environmental efforts, supply and demand from these groups will ultimately dictate the impact of biodiversity offsets.