Getting Biodiversity Offsets Right

A Research Agenda for Canada

In Canada, both our culture and our economy are linked to biodiversity: our economy is in large part underpinned by the extraction of natural resources while our cultural identity is often linked to our abundant biodiversity and large areas of wilderness. Biodiversity offsets offer promise as one tool, among a suite of others, that could enable better protection of biodiversity than would otherwise occur under most existing processes, while promoting sustainable development.

Key Messages:

  • Biodiversity contributes to human wellbeing in a number of ways; human health benefits from clean air and fresh water, economic activity relies on nature to supply natural resources, and people derive enjoyment and spiritual value from being in nature and having access to recreation. However, biodiversity is in rapid decline, due in large part to pressures from economic activity like resource development and land-use conversion.
  • Canadians want both economic activity and biodiversity. While the amount of resource development and economic activity forecast for the coming decade is substantial, there is a strategic window now, prior to development, to set biodiversity conservation goals and to implement policies that address the environmental impacts of economic activity.
  • Biodiversity offsets have the potential to be used as one tool to help achieve biodiversity conservation goals. While Canada is generally lacking policy frameworks for biodiversity offsets, there is real world experience and practical knowledge upon which to build biodiversity offset policies tailored for Canada.
  • In addition to moving forward now with biodiversity offsets where appropriate, ongoing research is required to ensure the best possible environmental and economic outcomes. This research agenda should be based on conservation science and should draw on interdisciplinary collaboration from political, financial, social, legal and economic experts. A starting point would be the 10 priority research areas identified by participants at the February 2014 conference Biodiversity Offsets in Canada: Getting it Right, Making a Difference.

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About the Project

The goal of this project is to shed light on the relationship between economic activity and the environment by exploring the linkages between changes in our natural capital and our measures of productivity generally, and through the construction of an environmentally adjusted measure of productivity specifically.

While it is now commonly accepted that economic activity and the state of our environment are linked, many economic measures still fail to incorporate the environment – both the things we draw from it and the pollution we release into it. By developing and calculating measures of productivity that include natural capital, Canada may be able to better understand these linkages. This, in turn, may lead to the identification of strategies that can help Canada become more efficient and innovative in the use and protection of natural capital, and thus more productive and more prosperous.

Using the forestry sector as a case study, this project aims to construct an environmentally adjusted measure of multifactor productivity. In doing so, we aim to add another layer of understanding to the environmental and economic performance of this sector. The proposed measure will have relevance to the Canadian economy as a whole.