Ecological and Economic Implications of Alternative Metrics in Biodiversity Offset Markets

Katherine Simpson* (Corresponding Author), Frans de Vries, Martin Dallimer, Paul Armsworth, Nick Hanley

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)
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Policy tools are needed which allow us to reconcile human development pressures with conservation management priorities. Biodiversity offsetting is a tool that can be used to compensate for ecological losses caused by development activities. Landowners can choose to undertake conservation actions including habitat restoration to generate biodiversity offsets. Consideration of the incentives facing landowners as potential biodiversity offset providers, and developers as potential buyers of credits, is critical when considering the ecological and economic landscape scale outcomes of alternative offset metrics. There is an expectation that landowners will always seek to conserve the least profitable land parcels and in turn, this determines the spatial location of biodiversity offset credits. We developed an ecological-economic model to compare the ecological and economic outcomes of offsetting for a habitat-based metric and a species-based metric. We were interested in whether these metrics would adequately capture the indirect benefits of offsetting on species not defined under the no net loss policy. We simulated a biodiversity offset market for a case study landscape, linking species distribution modelling and an economic model of landowner choice based on economic returns of the alternative land management options (restore, develop, or maintain existing land use). We found that neither the habitat nor species metric adequately captured the indirect benefits of offsetting on related habitats or species. The underlying species distributions, layered with the agricultural and development rental values of parcels, resulted in very different landscape outcomes depending on the metric chosen. Where policymakers are aiming for the metric to act as an indicator to mitigate impacts on a range of closely related habitats and species, then a simple no net loss target is not adequate. Furthermore, if we wish to secure the most ecologically beneficial design of offsets policy, we need to understand the economic decision-making processes of the landowners.
Original languageEnglish
Article numbere13906
Number of pages11
JournalConservation Biology
Issue number5
Early online date14 Mar 2022
Publication statusPublished - 1 Oct 2022

Bibliographical note

We thank the Leverhulme Trust for part-funding this work, as well as the European Commission under the Horizon 2020 project “EFFECT” (Grant Agreement 817903).

Data Availability Statement

Additional supporting information can be found online in the Supporting Information section at the end of this article.


  • biodiversity loss
  • biodiversity metrics
  • biodiversity offsets
  • no net loss
  • simulation model


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