Environmental Impact Assessment Review 55 (2015) 21–34

Contents lists available at ScienceDirect

Environmental Impact Assessment Review

journal homepage: www.elsevier.com/locate/eiar

Mitigation for one & all: An integrated framework for mitigation of

development impacts on biodiversity and ecosystem services
Heather Tallis a,⁎,1, Christina M. Kennedy b,⁎,1, Mary Ruckelshaus c, Joshua Goldstein b, Joseph M. Kiesecker b
a
The Nature Conservancy, 415 Alta Vista Dr., Santa Cruz, CA 95060, United States
b
The Nature Conservancy, 117 East Mountain Ave., Ft. Collins, CO 80524, United States
c
The Natural Capital Project, 371 Serra Mall, Stanford, CA 94305, United States

a r t i c l e i n f o a b s t r a c t

Article history: Emerging development policies and lending standards call for consideration of ecosystem services when mitigat-
Received 4 March 2015 ing impacts from development, yet little guidance exists to inform this process. Here we propose a comprehen-
Received in revised form 17 June 2015 sive framework for advancing both biodiversity and ecosystem service mitigation. We have clarified a means for
Accepted 20 June 2015
choosing representative ecosystem service targets alongside biodiversity targets, identified servicesheds as a use-
Available online 8 July 2015
ful spatial unit for assessing ecosystem service avoidance, impact, and offset options, and discuss methods for
Keywords:
consistent calculation of biodiversity and ecosystem service mitigation ratios. We emphasize the need to move
Mitigation hierarchy away from area- and habitat-based assessment methods for both biodiversity and ecosystem services towards
Strategic environmental assessment functional assessments at landscape or seascape scales. Such comprehensive assessments more accurately reflect
Conservation planning cumulative impacts and variation in environmental quality, social needs and value preferences. The integrated
Environmental compensation framework builds on the experience of biodiversity mitigation while addressing the unique opportunities and
Biodiversity offsets challenges presented by ecosystem service mitigation. These advances contribute to growing potential for eco-
Land use planning nomic development planning and execution that will minimize impacts on nature and maximize human
wellbeing.
© 2015 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).

1. Introduction To help inform impact mitigation, the scientific community has

responded with decades of research establishing best practices for ap-
Governments, health organizations, aid agencies, and more recently, plying the mitigation hierarchy to biodiversity impacts (Race and
conservation organizations, have goals to improve the lives of people Fonseca, 1996; Geneletti, 2002; Landis, 2003; BenDor et al., 2008;
through development that also preserves the life support systems of Canter and Ross, 2010; BBOP, 2012b). Despite these efforts, the ap-
the planet. Simultaneously achieving these goals is challenging and proach has fallen short in practice for both biodiversity and the benefits
nearly all countries have approached this dilemma by creating legal it provides to society—ecosystem goods and services (collectively re-
and policy requirements for mitigating the environmental impacts of ferred to as ecosystem services, or ES, for simplicity). Minimizing and
development (Morgan, 2012). Impact mitigation frameworks applied offsetting impacts on biodiversity and ecosystem function have been
by many governments and lending institutions around the world are the primary focus of mitigation historically, but such efforts can fail to
consistent in their strong support for the mitigation hierarchy, which in- avoid impacts on critical habitats (Clare et al., 2011), often do not ac-
volves first evaluating whether avoiding and minimizing these impacts count for cumulative impacts at a landscape scale (Canter and Ross,
are possible, and where not feasible or sufficient, offsetting or compen- 2010; Kiesecker et al., 2010), inconsistently and inadequately account
sating for residual effects (Lawrence, 2003; McKenney and Kiesecker, for ecological equivalency in losses and gains (Quétier and Lavorel,
2010). The stakes for implementing strategic development goals are es- 2011) and seldom succeed in returning lost biodiversity and ecosystem
pecially high: the rate at which energy, water, and infrastructure devel- function (Zedler and Kercher, 2005; Maron et al., 2012). These short-
opment projects are growing is accelerating with total investments comings largely stem from a historic approach to mitigation that is reac-
expected to exceed $53 trillion between 2010 and 2030 (OECD, 2012). tive, with actions focused at small spatial scales and on a project-by-
project basis.
To address these shortcomings, biodiversity mitigation policies
⁎ Corresponding authors.
and programs are now moving away from site-based, piecemeal mit-
E-mail addresses: [email protected] (H. Tallis), [email protected] (C.M. Kennedy). igation to a scale that can more comprehensively account for cumu-
1
Authors contributed equally. lative impacts of development within a region (Saenz et al., 2013a,

http://dx.doi.org/10.1016/j.eiar.2015.06.005
0195-9255/© 2015 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
22 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34

2013b, Villarroya et al., 2014) and even at a national scale (Kormos Clearly this integrated treatment of BES in mitigation is challenging
et al., 2014). There is general consensus now among researchers given that BES are unique, non-interchangeable, and determined by re-
and practitioners that biodiversity and ecosystem function mitiga- lated, but often different environmental factors. As such, there are few
tion should consider whole systems, anticipate impacts, and proac- places in the mitigation hierarchy where the same data, analytical pro-
tively recommend compensatory actions (Kiesecker et al., 2010; cesses, and activities can be applied consistently for both components.
Hayes, 2014). This larger-scale approach is supported by researchers Here we review the current state of the art for biodiversity mitigation
and practitioners and is expected to more accurately capture ecolog- and compare and contrast biodiversity approaches with the conceptual
ical dynamics, and allow for more strategic and proactive mitigation challenges of ecosystem service mitigation. We discuss each step of the
planning. Instead of simply requiring replacement of impacted re- mitigation hierarchy in detail below, highlighting potential BES syner-
sources in similar sites in close proximity to the impacts, compensa- gies and outstanding research needs with the goal of advancing inte-
tory mitigation can be steered to priority areas for both ecological grated best practices for impact mitigation that more holistically
and socio-economic investment, likely resulting in better outcomes account for people and nature.
(Wilkinson et al., 2009).
At the same time that improvements in biodiversity mitigation have 2.1. Siting
been recognized and solutions put forth, there is growing recognition
that ecosystem services have largely been forgotten (Brownlie et al., In the first phase, development options (both individual and suites
2012; Bos et al., 2014). Ironically, many of the laws that establish miti- of projects) would best be placed within a landscape or seascape con-
gation requirements were designed to protect people from environ- text to guide their appropriate siting. Targets are selected, the spatial ex-
mental degradation associated with development: in other words, to tent is determined, and conservation plans (Fig. 1A) can be used to
guard against ecosystem service loss (Villarroya et al., 2014). The lan- capture potential cumulative impacts and guide the selection and
guage in these laws ranges from the general to the specific. For example, avoidance of development sites.
Australia's National Strategy for Ecologically Sustainable Development
is designed to “enable development that improves the total quality of 2.1.1. Selection of targets
life, both now and in the future, in a way that maintains the ecological Although a comprehensive consideration of BES would be ideal
processes on which life depends”. In much more detail, the U.S. Clean (Geneletti, 2011; IFC, 2012), data and resource limitations will ultimate-
Water Act §404 that establishes the foundation for wetland and stream ly restrict the number of species, habitats, and ES that can be considered
mitigation states that “management programs shall conserve such in impact mitigation assessments. Despite such constraints, it is impor-
[clean] waters for the protection and propagation of fish and aquatic tant to recognize that biodiversity and ES are not interchangeable, either
life and wildlife, recreational purposes, and the withdrawal of such wa- across their own respective elements or across groups. A woodpecker is
ters for public water supply, agricultural, industrial and other purposes”. not the same ecologically or in terms of social value as a leopard, and
In addition to these legal precedents, there is a growing demand for water for irrigation is not the same as crop pollination. Beyond this ob-
ecosystem service impact assessment and mitigation by international vious statement of uniqueness, BES often exhibit different spatial and
organizations and multi-lateral lending agencies. For example, the Or- temporal patterns, and so should not be considered as consistent surro-
ganization for Economic Co-operation and Development (OECD) has gates for each other (e.g. Egoh et al., 2008; Naidoo et al., 2008; Cardinale
developed guidance for addressing ecosystem services in Strategic Envi- et al., 2012). Given the hundreds to thousands of options for targets to
ronmental Assessment (SEA) (OECD, 2008). Within the financial sector, use in a BES impact assessment, and the fact that the choice of targets
the Performance Standards of the International Finance Corporation greatly determines the outcomes of mitigation (Eiswerth and Haney,
(IFC) now require that projects they finance adhere to the mitigation hi- 2001), a systematic selection procedure is needed to ensure that the
erarchy for both biodiversity and ecosystem service impacts (IFC, 2012). subset of BES targets chosen is as representative as possible.
Current implementation, however, does not meet the intent of these Biodiversity targets should be selected based on their ability to ap-
laws and new standards. For example, in the U.S., wetlands damaged proximate the complete biological diversity of a region or site and to in-
by development in urban centers are being mitigated for in more rural dicate key changes in ecological conditions due to predicted local or
areas with lower population densities. Even if these mitigation actions landscape-scale changes including development impacts and climate
meet biodiversity mitigation needs, they will still fail to return change. Common approaches for selecting adequately representative
wetland-related ecosystem service benefits to the people who have biodiversity targets have been reviewed and discussed extensively
lost them (BenDor et al., 2008). (Margules and Pressey, 2000; Poiani et al., 2000; Groves et al., 2002;
Kiesecker et al., 2009) (Fig. 2a). In practice, mitigation tends to focus
2. An integrated framework for biodiversity and ecosystem on sites and species with protected status (e.g. nature reserves, Sites
service mitigation of Special Scientific Interest, IUCN Red List taxa), on economically im-
portant game species or charismatic species, or on at-risk habitats and
Although suggestions have been made for how to include biodiver- species (e.g., rare, threatened, or endemic species). Greater adherence
sity or ecosystem services separately for specific kinds of assessments to existing recommendations, such as a focus on multiple ‘umbrella spe-
(e.g., SEAs, Geneletti, 2011) and in specific contexts (e.g., Kiesecker cies’ that span different development threat categories (Roberge and
et al., 2010; Tallis and Wolny, 2010), a systematic and unified approach Angelstam, 2004), will better capture the full suite of biodiversity im-
for integrating services with biodiversity into the mitigation hierarchy is pacts in the development region (Geneletti, 2002; Gontier et al., 2006).
lacking. To address this gap, we build on previous work to propose an As with biodiversity, we face a major challenge in effectively
integrated framework that allows regulators to determine potential, cu- representing the diverse set of ES provided in any given area. Provi-
mulative impacts on biodiversity and ecosystem services (BES) at a sioning services, such as food production, water supply and timber
landscape, watershed, or seascape scale and to assess the compatibility production, are over-represented in research and data collection
of development with environmental and social goals. Our recommenda- (Millennium Ecosystem Assessment, 2005; Russell et al., 2013). The
tions stem from decades of research on best practices for mitigating de- selection of representative targets in the ES realm can be achieved
velopment impacts on biodiversity in terrestrial landscapes, which are in part by considering a suite of services that fall under the broad cat-
relevant for and can be tailored to freshwater and marine systems egories of provisioning, regulating, and cultural services as defined
(Bos et al., 2014). The framework addresses development siting, impact by the Millennium Ecosystem Assessment (Millennium Ecosystem
estimation and offset assessment, which are all iterative steps in an Assessment, 2005; Fig. 2b). Not all ES will be relevant in all develop-
adaptive assessment and mitigation process (Fig. 1). ment contexts, but consideration of all categories will help to ensure
 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34 23

Fig. 1. Integrated framework for biodiversity and ecosystem service (BES) mitigation for development impacts. Siting would be done in the context of a landscape- or seascape-scale as-
sessment so that areas critical for BES priorities are avoided and cumulative impacts can be considered. Targets are the species, habitats, genes, and ecosystem goods or services prioritized
in any region or case. A landscape-scale assessment of critical habitat avoidance areas in Mongolia's Gobi Desert shows the landscape (A) and project (B) view of biodiversity avoidance and
ecologically equivalent offsite sites. For more details see Heiner et al., 2013.

that major benefits are not overlooked. Assessors may consider the activities. Target services may also be chosen if they have high social or
use of stakeholder engagement approaches to help identify locally commercial value for their continued delivery (e.g. access to spiritually
preferred or important services (e.g., Rosenthal et al., 2014), though significant gathering places, commodity food production, high-value tim-
Agency or Ministry mandates and regulatory context will also fea- ber production) (Luck et al., 2012).
ture heavily in the selection of focal ES. Best practice suggestions de- Expanding the ‘umbrella species’ concept from biodiversity theory,
veloped for the United States federal government offer useful ES whose provision corresponds well with a myriad of others may be
considerations for choosing focal ES (Olander et al., 2015). used as ‘umbrella services’ (Daily, 2000), to presumably capture the
Within ES categories, further effort will be needed to select a repre- trends and potential losses of other non-target services. For example,
sentative subset of targets. Both the number and characteristics of regulating services were found to be highly correlated with the most di-
beneficiaries (or people who receive a specific service) are important verse set of services in Quebec, Canada, indicating that they could serve
considerations. Services impacting a larger proportion of the affected as proxies for other services in this region (Raudsepp-Hearne et al.,
population or particularly vulnerable cohorts (e.g., poor, women, elder- 2010). However, careful consideration of local conditions must be
ly, indigenous groups) may be prioritized. Additionally, services could used when choosing service targets in this way, as inter-relationships
be targeted if they are expected to suffer the greatest losses from devel- are often unknown and can vary with biophysical conditions, land use,
opment to ensure that the most. and socio-political context, among other factors (Anderson et al., 2009;
significant social or ecological damages are avoided or at least Nelson et al., 2009; Cardinale et al., 2012). For example, in southwest
accounted for. Targets may represent services with a disproportionate Australia, water quality regulation and carbon sequestration are positively
amount of their supply within the proposed development zone (Luck correlated, making either service representative of the other, but the two
et al., 2012), or services that are highly sensitive to proposed development are negatively correlated in the Argentinian pampas making them poor
24 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34

Fig. 2. Frameworks for biodiversity (a) and ecosystem service (b) target selection. Priorities for impact mitigation should be selected to ensure representation of non-target species, hab-
itats, or ecosystem goods and services. Representation across spatial scales and levels of biological organization from local to regional has been advocated in biodiversity conservation plan-
ning (reprinted Poiani et al., 2000, with permission). For ecosystem goods and services, we suggest representation across types of services as defined in the Millennium Ecosystem
Assessment (reprinted from Millennium Ecosystem Assessment, 2005).

surrogates there (Jackson et al., 2005). These correlations also may not be 2.1.2. Delineate spatial extent
stable over time as climate and other global drivers change ecosystem Spatial boundaries for impact mitigation are conventionally attribut-
functions and inter-relationships between ES. ed to the local impact site(s) and any reference or control sites if evalu-
In addition to these general criteria for ES selection, concepts for ated (Atkinson et al., 2000; Gontier et al., 2006). Expansion in scope
the selection of biodiversity targets are relevant in cases where the from this single project-scale to a larger, landscape-scale has been rec-
production of ES is tightly tied to specific species or habitat types. ognized as essential for cumulative impact assessments of multiple
For example, commercial and recreational fishing services and stressors in complex socio-ecological systems (Margules and Pressey,
value are usually dominated by a few socially preferred species 2000; Geneletti, 2002; Groves et al., 2002; Landis, 2003; Landis and
(Holmlund and Hammer, 1999). Carbon storage and sequestration Wiegers, 2007). We further suggest that to effectively mitigate BES im-
benefits are tightly associated with vegetation communities, which pacts of development, this scale should capture not only the estimated
can be characterized relatively well by habitat or land cover types extent of influence(s) for the proposed development activities at hand,
(Gibbs et al., 2007). Moreover, the provisioning of some ES is corre- but also the net extent of current and forecasted future development
lated with the biodiversity of a system (Cardinale et al., 2012). (as done in Copeland et al., 2009).
When relationships between services and species are known, posi- In order to capture the distributions and dynamic processes
tive, and sufficiently strong, biodiversity target selection criteria supporting biodiversity targets across that larger landscape or sea-
can be applied to services as well. scape scale, the spatial extent needs to coincide with ecoregional or
 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34 25

watershed boundaries and allow for assessments of habitat function or and no institutions or physical barriers prevent any people from benefit-
condition, species' population viabilities, community assemblages, and ting. Existence value is another service where physical and institutional
larger-scale processes like fragmentation (Gontier et al., 2006; Groves accesses are not key in defining the serviceshed, as existence is enjoyed
et al., 2002). Overall, in order to maintain the collection of biodiversity non-physically. In other words, beneficiaries do not need to be in con-
targets, their spatial extent should include joint boundaries that capture tact with a species to enjoy it, and so there are no physical or institution-
the spatial units for all targets (as explained above) as well as the eco- al limits to the serviceshed boundary. As such, the serviceshed for
logical processes that support them. existence value of a given species is simply defined as the habitat
The core spatial unit for ES targets is the area that can provide the range for that species (or the area of biophysical supply for that species'
same benefits to the same people, termed the ‘serviceshed’ (Fig. 3) population).
(Tallis and Polasky, 2009). The spatial extent of a serviceshed is deter- Physical and institutional constraints can be more relevant for
mined by the area that supports biophysical service production, and al- more locally provided services, such as drinking water quality or es-
lows beneficiaries both physical and institutional access to the service thetic value. Both require people to be able to physically and legally
(Tallis and Polasky, 2009). If there is no biophysical supply of a service access the supply (e.g. the clean water or a pleasing view) for the
(e.g. no water purification taking place, no fish that can be caught, no benefit to flow. The watershed upstream from an extraction or use
forest views to enjoy), then there is no benefit. If formal (laws, regula- point captures the drinking water quality serviceshed, as it captures
tions) or informal (social norms, cultural practices) institutions restrict the area supporting water quality and regulation processes, and can
beneficiaries' ability to access the biophysical supply, then there is no be drawn as appropriate to reflect both institutional and physical ac-
benefit. Institutions that limit or promote access can be very diverse, cesses. To extend this example, if source watershed areas include
and can include protected areas, irrigation rights, land tenure, tradition- inter-basin diversions, then the serviceshed incorporates all perti-
al rights, hunting or fishing seasonal closures, and many others. Institu- nent upstream contributing areas above all water diversion infra-
tions may also be variably applied to different groups of people, structure (McDonald et al., 2014). If a city relies on water piped in
emphasizing the need to map out such institutions to accurately ac- from a reservoir 50 km away, that city's drinking water regulation
count for impacts on or potential mitigation benefits for specific groups serviceshed is the watershed upstream of the reservoir, not the wa-
of people. Finally, if people cannot physically access services that require tershed upstream of the city itself.
such access then no human benefits can accrue. If clean water is flowing The serviceshed for crop pollination (Fig. 3a) would be the area
in a river, and no institutions limit access to it, but there are no pipes, around a pollinator-dependent crop field within the flight
roads or paths to allow access, then no one may be able to garner use distance(s) of local, wild pollinators in relation to habitats (foraging
benefits from that clean water. Physical access also often varies among and nesting resources) in a landscape. Habitats that lie outside the flight
social groups (e.g. wealthier people may access water via delivery range of pollinators would house those pollinators, but would not be
pipes to their homes while poorer people may use footpaths to wells providing a pollination service. The serviceshed for water quality regu-
or rivers), again emphasizing that these spatial relationships must be lation to support recreational fisheries (Fig. 3b) captures the up-
clearly defined for impact assessment and mitigation. stream catchments from lakes 1) containing desirable recreational
All three of these elements (biophysical supply, institutional access, fish species, 2) within a tolerable driving distance of beneficiaries,
physical access) can apply to use and non-use services alike. However, 3) where recreational fishing is legally and/or culturally allowed,
serviceshed boundaries, and the importance of each factor in determin- and 4) where physical access is possible (e.g. boat launches, piers
ing them, can vary dramatically among services. Some services, such as or fishing access points exist) (Fig. 3b). Lakes too far away, without
carbon sequestration, encompass the planet, as the atmosphere is well access, without desirable fish, or with restricted fishing rights
mixed (so supply anywhere provides benefit to all people equally) would not fall within this serviceshed boundary.

Fig. 3. Hypothetical serviceshed boundaries. Serviceshed boundaries for crop pollination (a) are determined by the flight distance(s) of pollinators in relation to crop fields and habitat
areas. Darker colored farm and native habitat are within the serviceshed area, while lighter habitats are not. Pollinators may live outside the serviceshed boundary but will not provide
pollination service to the focal farm. The serviceshed for recreational fisheries (b) is determined by the lakes (or rivers) with harvestable recreational fish species that are within an ac-
ceptable travel time and that allow physical access (public access, boat launches, etc.). Lakes 4 and 5 are outside the example serviceshed because potential beneficiaries lack physical ac-
cess or are too far away, respectively. Lake 3 is within the potential serviceshed area but is protected, so access is denied due to institutional restrictions.
26 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34

Other proposed definitions for the spatial units of ES have focused Kiesecker, 2010). Although information, guidance, and tools exist to in-
largely on the ecological entry points and have been based on eco- form the identification of avoidance areas for biodiversity, they are
systems (Hein et al., 2006) or service providers (Luck et al., 2009a, seldom applied in practice (Clare et al., 2011), leading to a net loss
2009b). These definitions scale ES appropriately to their ecological of species, critical habitats, and functioning ecosystems (Race and
production areas, but fall short by not including elements like infra- Fonseca, 1996).
structure, access or restriction zones, locations of markets, and other Priorities and thresholds for impact are often based on two key
social and economic factors that determine the amount and value of factors: irreplaceability (or uniqueness) and vulnerability (or threat)
services enjoyed by people (Boyd and Wainger, 2003; Guerry et al., (Margules and Pressey, 2000; BBOP, 2012a; Pilgrim et al., 2013). In a
2015). A relevant assessment unit for services would allow for clear biodiversity mitigation context, irreplaceability refers to the spatial
estimation of any distributional effects, accounting for factors like extent of options that will be lost if a particular site is impacted by
these among others. A consequence of avoiding these social distribu- development. Vulnerability refers to the likelihood that mitigation
tional factors is illustrated as described above with the US Clean actions will return the same biodiversity benefits as those that
Water Act (Ruhl and Salzman, 2006). were impacted given current losses and impending threats. Several
Serviceshed boundaries can be delineated for any prioritized service general factors determine the irreplaceability and vulnerability of
and related beneficiaries just as boundaries for biodiversity can be proxied biodiversity in any given mitigation context (Fig. 4).
by ranges, occurrences, densities, numbers, and interactions of species The irreplaceability of biodiversity in a site typically is assessed
and habitats (Luck et al., 2009a, 2009b; Tallis et al., 2012a; Mandle and based on the prevalence of rare, unique, endemic or geographically re-
Tallis, 2012; Arkema et al., 2013). Ultimately, the spatial extent of impact stricted species or habitats, the extent of remaining intact and undis-
assessment and mitigation should be defined as the fullest extent needed turbed critical habitats, and the importance of an area in supporting
to capture both biodiversity (and associated ecological processes) and the key source populations and/or evolutionary processes (e.g., key migra-
servicesheds (and associated beneficiaries) of all services targeted. tory routes or unique genetic diversity) (Fig. 4) (BBOP, 2012a; IFC,
2012; Margules and Pressey, 2000). In simple terms, the irreplaceability
2.1.3. Avoidance criteria of an area increases with the percentage of the global range or overall
Once the targets and boundaries are set for mitigation analysis, de- population of biodiversity target(s) it contains (Langhammer, 2007;
termination of how and where to avoid impacts is the first formal step Pilgrim et al., 2013).
in the mitigation hierarchy. This step is meant to avoid creating negative Ecosystem service avoidance has not been addressed systematically
environmental and social impacts from the outset through careful de- in the mitigation literature although the relevance of irreplaceability
sign and placement of development activities (Nichols and McElfish, and vulnerability has been recognized (Brownlie et al., 2012; Gardner
2009). Here, we focus on the spatial aspect of avoidance: the locations et al., 2013). We extend the same concepts from biodiversity mitigation
where the risks of development are likely to be too high for mitigation guidelines to ES and propose that several factors are likelyto affect the
efforts to achieve a no net loss (or ideally net gain) in biodiversity or availability of alternative areas for mitigation of services if a given site
ecosystem services (BBOP, 2012b, Gardner et al., 2013, McKenney and is impacted (Fig. 4).

Fig. 4. Factors influencing avoidance for mitigation of biodiversity and ecosystem service (BES) impacts. Avoidance areas should be defined as those where impacts cannot be mitigated
effectively and equivalently elsewhere. Conditions where mitigation will likely be difficult (all else equal) are identified in the “AVOID if…” box. Factors pertinent only to biodiversity are
shown in green, for ecosystem services in blue, and overlapping considerations in orange. These factors are offered as general guidelines, but landscape- and site-level quantitative assess-
ments are needed to identify specific avoidance areas (or thresholds) for a given region.
 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34 27

Irreplaceability will be higher in areas where target ES are linked Given that our understanding of development impacts on BES is
with specific species or habitat types than in those dominated by service quite limited for a wide variety of human land uses and activities
targets that can flow from a broader range of species or habitats. For ex- (Alkemade et al., 2009; Carpenter et al., 2009; de Groot et al.,
ample, a site harboring a rare fish species used in a traditional ritual 2010), and that there are capacity constraints to conduct regular
practice for a localized indigenous tribe will be more difficult to replace and consistent assessments for development proposals (Morgan,
than a site where the largest service benefit stems from carbon storage 2012), the most risk-averse approach is to proactively conduct
(since the latter can be provided, to varying degrees, from a multitude of landscape-scale assessments of candidate avoidance areas. Once
habitat types at any location on the globe). Similarly, services provided avoidance areas are identified, they can be given systematic consid-
within smaller servicesheds are likely to be more irreplaceable because eration as new projects are proposed and can be used to inform de-
they are reliant on spatially constrained variables, thereby reducing the velopment options in the further stages of the mitigation hierarchy.
mitigation options to conserve or restore other service provision areas
within the same serviceshed. For example, water-related ES that de- 2.2. Impact
pend on catchment-scale hydrologic functions must be mitigated with-
in the same catchment (serviceshed) to provide the same benefits to the Proposed development, when compatible with landscape-level con-
same people (Tallis and Wolny, 2010). servation plans, will have the least impact if it follows best management
The vulnerability of biodiversity at a site is determined in part by practices to minimize impacts at the site and to mitigate for the un-
how quickly and reliably target species or habitats can recover from dis- avoidable impacts using strategic compensatory actions. During the im-
turbances given their sensitivity and exposure to threats and their cur- pact stage, projected impacts are assessed and efforts to minimize,
rent (background) rates of loss (Fig. 4) (BBOP, 2012a; IFC, 2012; Wilson restore and offset impacts are considered.
et al., 2005). Already threatened or at-risk species and habitats are com-
mon examples of highly vulnerable biodiversity targets (Langhammer,
2007; Pilgrim et al., 2013). This same rationale holds for ES, such that 2.2.1. Minimize and reduce impacts
sites with higher rates of services loss or that support services with Minimization seeks to reduce the duration, intensity, and/or extent
slower or less likely recovery trajectories should be avoided for develop- of impacts that cannot be completely avoided. Once a site is chosen
ment. The level of vulnerability is also influenced by the ability of for development, impacts can be minimized by reducing the size of
beneficiaries to respond to service loss and their access to substitutes. area impacted, relocating or focusing site activities in less sensitive
Beneficiaries are likely to be less vulnerable to loss if the ES provided areas, and/or adopting less damaging activities within the site's active
in an area are not directly contributing to basic needs or strongly held areas. While the factors that determine sensitivity vary, all of these ap-
values. In addition, if people have access to viable and affordable alter- proaches are applicable for both biodiversity and ES minimization. On-
natives for the same services, either naturally or technologically, they site minimization represents the most widely used approach for biodi-
will be less vulnerable to the loss of those services. Holding all else con- versity, with design and engineering solutions the most active area of
stant, we propose that avoidance is more appropriate where environ- practice (The Energy and Biodiversity Initiative, 2004). After attempts
mental impacts occur to places providing ES directly linked to basic to avoid or minimize impacts are made, measures can be taken to reha-
human needs and strongly held values, and where few alternatives bilitate or restore degraded ecosystems or reclaim cleared land post-
exist. impacts. Like minimization, restoration techniques for biodiversity im-
Ideally, the irreplaceability and vulnerability of sites in relation to pacts are an active area of research and practice (The Energy and
proposed and cumulative development projects would be assessed at Biodiversity Initiative, 2004).
each site within a broader, landscape context (Gardner et al., 2013). Too little work has focused on ES minimization to identify leading
As the impacts on any given site and its role in maintaining BES varies practices. However, much can be gleaned from techniques developed
based on local context and socio-environmental conditions, universal for related processes such as water quality regulation, water supply,
thresholds for avoidance factors do not exist. Therefore well-informed air pollution and flooding (Nichols and McElfish, 2009). We also suggest
decisions are based on project-specific assessments within a regional that ES may benefit more so than biodiversity from on-site activities
context that include population and habitat viability, habitat fragmenta- that use engineered options to minimize impacts. For example, water
tion and connectivity, and ES assessments in conjunction with scenario quality regulation may be impacted on a site where surface vegetation
analyses informed by landscape-level conservation and development is cleared and soil is disturbed. Built water filtration and treatment facil-
planning exercises. When practical limitations prohibit such detailed as- ities could replace these benefits to the broader water supply system,
sessments, practitioners often base decisions on the best available and in so doing, reduce off-site service losses. Air quality regulation,
science and on best judgment about the likely risk of development. soil fertility, fish production, carbon sequestration and coastal protec-
Standards have been established to identify important areas for biodi- tion are among the other ES that may benefit from on- or near-site tech-
versity that include both the occurrence of threatened species (e.g. ac- nological alternatives, though this area has received little research
cording to IUCN Red List) and certain percentages of species' attention to date.
populations (Langhammer, 2007; Ricketts et al., 2005). These thresh-
olds have also been proposed as criteria to determine critical areas 2.2.2. Impact assessment
that should be avoided for development (IFC, 2012; Pilgrim et al., 2013). Once development plans are adjusted to reduce and minimize im-
Equivalent decision criteria with a focus on ES attributes and how pacts on-site, the residual impacts of activities can be estimated. Many
they respond to human induced pressures are only in the early stages quantitative tools exist to estimate the potential development impacts
of development. Concepts have been proposed to identify ES thresholds, on biodiversity. Functional assessments are ideal, and include methods
such as the “safe minimum standard” or the minimum quantity of eco- for assessing the condition and functioning of habitats like wetlands
system structure and process …that is required to maintain a well- (Kusler, 2003) and biological and ecological models for assessing spe-
functioning ecosystem capable of supplying services” (p. 2053 in cies and community persistence (Gontier et al., 2006). Ideally, impact
Fisher et al., 2008). The goal of these efforts is to establish a minimum is assessed over the projected lifetime of the project, and other land or
conversion benchmark that ensures sustainable service provision (anal- sea-scape trajectories are considered such that estimated impact takes
ogous to minimum viable population) (Kontogianni et al., 2010). But in into account likely future development or other (e.g. climate) changes
reality, these thresholds are difficult to validate or put into practice given at broader scales that influence the degree of impact that will be expe-
the uncertainty around predicting future ES demand and the fact that BES rienced at a given site. These methods have been reviewed elsewhere
interactions are likely to influence resilience (Bennett et al., 2009). (Geneletti, 2002).
28 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34

Despite guidance for best practice on biodiversity impact assess- because it is unlikely that the total service amount will be lost as the re-
ments, common practice fails to implement the state of the art tools sult of land conversion or degradation, and such methods could inad-
and methods (Gontier et al., 2006), most commonly failing to estimate vertently overestimate the impacts of development. It is also
cumulative impacts and estimating impacts on the basis of area alone. important to estimate the marginal impacts on each target service and
Area-based impact assessment considers impacts equivalent in all acres beneficiary independently. As discussed above, services do not always
of a given habitat type (e.g. wetland) regardless of the quality or function- have the same relationships with each other (e.g. tradeoffs or synergies)
ing of the habitat or the services it provides (e.g. in retaining species diver- or to human benefits, so any use of one service as a proxy for another
sity or providing sediment and nutrient retention benefits for water must be established as valid in any given context.
quality). This area-based assessment approach has been widely criticized
for its inability to adequately compensate for development impacts (Ruhl
and Salzman, 2006; Wilkinson et al., 2009). In response, functional assess- 2.2.2.2. Methods for ES impact assessment. Given these requirements,
ments have been recommended as a means to more effectively capture some methods and tools developed for biodiversity assessment are ap-
ecological variability and function (McKenney and Kiesecker, 2010; propriate for ES impact assessment, while others are not. Area-based or
Quétier and Lavorel, 2011). habitat-based assessments have limited utility (Olander et al., 2015), as
they seldom allow for the estimation of marginal impacts or of the im-
2.2.2.1. Basic principles for ES impact assessment. An equivalent conceptu- pacts on individual services. They instead commonly focus on ‘total
al basis for ES impact assessment does not yet exist, but relevant ecosystem value’ and rely on the lumping of services that may not
methods have been advanced in several other contexts. In general, it is accurately reflect the set of services flowing from the focal analysis
recognized that ES can be assessed for their potential to benefit people area. They also commonly assume a consistent delivery or value of ser-
(supply), the amount of service actually used or enjoyed by people (de- vice from a given area (unit) of habitat; for many services, the amount of
livery), or for people's preference for receiving the amount of service service provided varies within habitats as a function of biophysical con-
(value) (Tallis and Polasky, 2009; Granek et al., 2010). ditions, demand, institutions and physical access that limits or allows
In a mitigation context, rigorous functional ES impact assessments services to be realized (Barbier et al., 2008; Koch et al., 2009; Ricketts
focus not only on how supply is disrupted but also on how the delivery et al., 2008). Tools and databases focused on benefits transfer ap-
of services will be impacted over the lifetime of the project, and how proaches (e.g. Natural Assets Information System™, Wildlife Habitat
much those changes are likely to matter to people (value). Ideal ES im- Benefits Estimation Toolkit, parts of Toolkit for Ecosystem Service Site-
pact assessments calculate impacts of a given project in the context of based Assessment) often use area-based and habitat-based studies, so
other land- or sea-scape scale changes likely to happen over the lifetime any application of values from these sources must be done with care
of the project, such that they capture cumulative effects of development to extract service-specific, marginal change information matched to
and other changes (e.g. climate) along with human population and the study site (Plummer, 2009).
other changes that alter the demand for and value of a given ecosystem The ideal method for ES impact assessment is to use a functional
service. Estimates of impact on supply alone will miss the important assessment (e.g. Diaz et al., 2011), preferably in the form of ecologi-
connection to people, and as such, do not accurately reflect an impact cal production functions to estimate ES flows and to directly tie them
on people's ability to receive and benefit from an ES. For example, devel- to beneficiaries are ideal for impact assessment (Slootweg et al.,
opment that reduces surface water flows reduces the potential supply of 2001; Boyd and Wainger, 2003; NRC, 2005; Olander et al., 2015).
drinking water, but if no people are using those surface water flows for These methods use equations that capture key factors and relation-
drinking, then there is no impact on service delivery. Ideally, impact as- ships that allow for the calculation of marginal impacts and the esti-
sessments seek to focus on changes in ES value, but value data are often mation of service-by-service impacts, as well as reflect the variability
more limited than biophysical data on service delivery, and a strict focus in ecological and socio-economic conditions both among sites and
on service value may un-necessarily restrict the set of services that can over time.
be assessed (Tallis et al., 2012b). As such, ES impact assessments will at Several tools have been developed on this basis (ARIES, InVEST,
best estimate impact on value, and at least include an assessment of im- MEASURES, MIMES), and their strengths and weaknesses have been
pact on ES delivery. reviewed elsewhere (Vigerstol and Aukema, 2011; Bagstad et al., 2013;
For services that are provided by a single species or habitat type, Waage et al., 2011). Data limitations are often a challenge in the use of
functional biodiversity impact assessment methods can be reliably production function approaches, and several available tools have over-
used to estimate impacts on service supply. However, even for these come these limitations by using land use/land cover (LULC) data as a
services, additional methods are needed to assess impacts on service de- key input to ES models (Nelson et al., 2009; Raudsepp-Hearne et al.,
livery or value. For example, population (or habitat) viability analysis 2010). This differs from a simpler habitat-based approach (e.g. x services
may indicate how development will impact pollinator populations, provided by y acres of wetland habitat) because LULC data are combined
but such an analysis does not indicate how much pollination service is with other data that reflect key variability in service provision within a
likely to change. In this context, the service-provider unit (SPU) concept LULC type (e.g. soils, elevation, climate, management data), and connects
can be useful for impact assessment (Luck et al., 2009b). When there is a these ecological factors to the location and intensity of human demand for
tight link between services and particular species, as in the case of pol- the service (e.g. via travel time models for recreation, or infrastructure ac-
lination, it makes sense to link the appropriate measure of biodiversity cess points for drinking water).
(population density, functional diversity, etc.) and the levels of service A production function approach is currently limited for many ser-
delivery. However, these clear links between species identity or diversi- vices by an absence of critical secondary data, high resource or capacity
ty exist for only a subset of services, and have been described for an even demands for primary data collection, and/or the absence of practical
smaller subset of services (Cardinale et al., 2012). For example, carbon production function-based assessment models (but see Kareiva et al.,
sequestration, water quality regulation, flood mitigation and air pollu- 2011; Guerry et al., 2015). These challenges have led some to suggest
tion regulation are among the many services that can be provided to dif- the use of ES indicators in other decision contexts (e.g. de Groot et al.,
fering degrees by a diverse set of species and habitat types. 2010 for land use planning) and some efforts have been made to com-
In all cases, ES impacts are best estimated as the marginal change in pile lists of such indicators. However attractive the use of proxies or in-
ES delivery or value to each beneficiary (Tallis and Polasky, 2009). Mar- dicators may be, their utility for creating marginal impact estimates is
ginal change is the difference between ES delivery or value under base- tenuous at best, and the relationships between services and their poten-
line conditions and under proposed development scenarios. Simply tial proxies remain largely untested for most services (Naidoo et al.,
assessing the current level of service delivery or value is insufficient 2008).
 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34 29

2.3. Offset conservation priority than that affected by the development. For ex-
ample, limitations on the availability of offset sites that can provide
Even when development is consistent with landscape-scale conserva- in-kind mitigation can lead to the allowance of a different approach
tion goals, and best practices are used to minimize impacts, some impacts called out-of-kind mitigation where impacts on one biodiversity tar-
are unavoidable. Offsets can take the form of positive management inter- get are allowed to be replaced by improvements in a different biodi-
ventions such as restoration of degraded habitat, or protecting areas versity target (Bull et al., 2013). In addition a regional landscape
where there is imminent or projected loss (BBOP, 2012a). For BES, offset perspective may provide opportunities to identify situations in
design methods need to ensure that the targeted actions provide addi- which “trading up” offsets offer valuable alternatives that deliver
tional replacement for unavoidable negative impacts, involve measurable, better conservation outcomes from out-of-kind offsets. Whether
equivalent gains and target effective and efficient placement. To address in-kind or out-of-kind mitigation is allowed affects how offset sites
these issues we suggest a two step process, where 1) the potential bene- are selected.
fits of mitigation actions are estimated across a large area, and 2) offset Guidance on ES offsets is in early stages of development (Brownlie
sites are chosen based on that potential to efficiently meet the mitigation et al., 2012). We offer three key considerations: whether interchange
requirement (Kiesecker et al., 2009; Tallis and Wolny, 2010). among services will be allowed (e.g. water quality regulation impacts
offset by pollination benefits), whether interchange between beneficia-
2.3.1. Estimate offset potential ries will be allowed (e.g. impacts to one city replaced by benefits to an-
Estimating the additionality – or benefit – of an offset is the concep- other city, or impacts to indigenous people offset by benefits to non-
tual inverse of impact assessment, and as such, the same principles used indigenous people), and whether monetary or other compensation for
in impact assessment apply to offset potential estimation. In this step, lost services will be allowed (e.g. payments for lost services or techno-
the intent is to estimate the marginal improvements in BES expected logical provision of an alternative such as bottled water for lost water fil-
from identified mitigation actions. For internal consistency, the same tration services). Ultimately, what is allowed is likely to be dictated by
methods need to be used for both impact and offset assessment. As political preference. However, it must be clearly recognized that offsets
with impact assessment, guidance for estimating ES offset potential that provide different services than those lost in development or that
is less developed, but the principles outlined above hold. Area- and focus on different beneficiaries than those impacted will, by definition,
habitat-based methods are not sufficient for capturing the likely dif- create ecosystem service ‘winners’ and ‘losers’, and very likely create
ferences in ecological condition associated with biodiversity targets, or deepen social inequities with regard to service delivery. This poten-
the change in ES attributable to mitigation actions, nor for capturing tial has been demonstrated through the Clean Water Act in the United
variation in those benefits associated with differences in ecological States, where failing to require in-kind offsets of ES to the same benefi-
and social conditions. Functional assessments again will provide ciaries has led to the redistribution of wetland-related benefits from
the most robust and informative estimates of how offset benefits low-income city dwellers to relatively higher income rural dwellers
are likely to vary across land- and seascapes, and will be most effec- (BenDor et al., 2008).
tive if applied to estimate the marginal gains between a scenario
where development proceeds without offsets and one where offsets 2.3.3. Spatially combining biodiversity and ecosystem service offsets
are implemented. With a clear view of how offset benefits for BES vary over space, and
knowledge of whether in-kind or out-of-kind options are allowed, prac-
2.3.2. Offset design titioners can then identify which offset sites are likely to meet offset
Once offset potential has been estimated across the assessment re- requirements most efficiently. Relatively sophisticated prioritization
gion, locations can be selected that meet the mitigation requirements. approaches exist for biodiversity targets, building heavily on conserva-
Many resources have been developed to guide biodiversity offset design tion planning practice (Groves et al., 2002; Possingham et al., 2000;
specifically (BBOP, 2012b) and other sources of information can be Kiesecker et al., 2009, 2010) and these same methods can be adapted
adapted for this use (e.g. ecoregional assessments, watershed manage- to information identifying how ES benefits vary across space (Chan
ment plans and other conservation planning exercises (Kiesecker et al., et al., 2006).
2009; Wilkinson et al. 2009; Kiesecker et al., 2010; Weber and Allen, Any prioritization exercise will need to follow a logical order for
2010)). Despite the availability of information to guide offset design, choosing BES offsets. There are three options for how prioritization
the use of biodiversity offsets in practice remains limited (Salzman could address these two sets of targets. In one option, biodiversity off-
and Ruhl, 2005; McKenney and Kiesecker, 2010) and most biodiversity sets could be prioritized first, using classic methods to identify the
offsetting that is done is focused on-site. This narrow focus on activities suite of sites that most efficiently meets biodiversity mitigation require-
near or at the site of impact means that opportunities on the broader ments. Then, that set of sites could be assessed for the benefits it returns
land- or seascape that may contribute more to overall biodiversity con- to ES. If the biodiversity offset sites do not return sufficient ES benefits, a
dition are missed. In other words, the best place for mitigation on the second round of prioritization could be done to identify the best sites to
impact site may have much less ecological potential or be much less fill in the remaining ES offset requirements. This method was followed
cost-effective at returning the lost biodiversity than activities at a site in a case where ES considerations were added to existing biodiversity
elsewhere on the landscape. For both biodiversity and ecosystem ser- regulations in Colombia (Tallis and Wolny, 2010). In another option,
vices, we strongly recommend a comprehensive land- or seascape- this approach could be reversed such that ES offsets are prioritized
scale approach to find the most effective mitigation opportunities. In first, choosing sites that efficiently meet the ES offset need. These sites
fact areas identified for avoidance in many cases will serve as the best could then be assessed for biodiversity benefits, and a second prioritiza-
offset options if identified thru a landscape-scale assessment account- tion used to fill in additional area needed to meet unfilled biodiversity
ing for cumulative impacts (Kiesecker et al., 2009; Kiesecker et al., offset requirements.
2010). The third option is the most truly integrated prioritization, in which
biodiversity and ecosystem service offsets are considered in a joint pri-
2.3.2.1. In-kind vs. out-of-kind offsets. For biodiversity offsets, most poli- oritization. In this approach, sites would be chosen based on their ability
cies include a requirement for like-for-like or in-kind offsets: those to meet both biodiversity and ecosystem service offsets. This method
that conserve similar attributes of biodiversity to those affected by the was applied to identify areas to conserve habitat in the Brazilian Cerrado
development (Salzman and Ruhl, 2005; McKenney and Kiesecker, to bring lands into compliance with the Forest Code in a way that ben-
2010). There are some situations in which better conservation re- efits both biodiversity (bird and mammal species) and water-related
sults may be obtained by placing the offset in an ecosystem of higher ecosystem services (nutrient and sediment retention). In this case, a
30 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34

third objective, minimizing agricultural opportunity cost, was also in- as a proxy for BES may be expedient but is seldom effective, as it over-
cluded in the prioritization to help increase the feasibility of identified, looks many factors that cause each target to vary within a habitat
optimal offset options (Kennedy et al., in review). type. Most factors traditionally used to calculate biodiversity offset ra-
In contexts where biodiversity and ecosystem service targets have tios are introduced to try to correct for these oversights, and establish
high spatial correlation, any of the above spatial prioritization options more accurate impact estimates or more accurate equivalency between
will give similar results, and selection of a method is less significant. In impact and offset sites. However, functional assessment approaches ne-
areas where there is little spatial overlap among targets, choice of meth- gate the need for these factors when they are directly incorporated into
od will strongly influence the selection of sites, and will require serious the assessment of impacts and offsets. For example, because area-based
consideration. For example, a mitigation assessment of a proposed road approaches do not estimate marginal impact, but rather assume full bio-
through the Peruvian Amazon compared how different offset options diversity loss, some ratio factors are used to adjust the actual impact
affected indigenous and non-indigenous communities in the impact re- based on the type of development (e.g. a higher ratio for a more damag-
gion, emphasizing how offset placement would affect social equity ing kind of development). If impact assessment accounts for the mar-
(Mandle and Tallis, 2012). In this case, ecologically driven offsets with ginal change through a functional assessment, little adjustment would
ES fill in were compared to jointly targeted offsets for several water be needed via an offset ratio. Similarly, habitats of the same type, but
quality regulation services. Neither approach could fully compensate farther away from the impact site may be assigned a higher offset
for lost ES benefits, but including services information in the spatial pri- ratio because of the chance that the habitat is too dissimilar to support
oritization reduced projected residual impacts to drinking water quality the biodiversity lost. A functional assessment that accounted for the ac-
more than 4-fold for sediment loads, 16-fold for nitrogen pollution and tual differences in habitat would not need to rely on a ratio to reflect this
nearly 40-fold for phosphorous pollution. Given the minimal availability possibility. When such comprehensive functional assessments are not
of such studies, research is insufficient to identify which method is most possible, ratio factors can be used to correct any shortfalls.
informative or efficient under different ecological and social conditions. Some factors are relevant for ratio calculation even if a comprehen-
In addition to scientific considerations of where offsets for BES can sive functional assessment method is used, as they are difficult to ac-
be most efficiently sited, policy rules will be important in defining the count for. For example, all assessment methods are associated with
degree to which it is desirable to promote overlapping BES offsets. some uncertainty, and best practice would be to increase the offset
This issue relates to the “stacking” debate in the ES literature regarding ratio in cases where it is known that datasets or models are more uncer-
whether policymakers should allow or prevent compensation for spa- tain (Bull et al., 2013). As another example, it is possible to capture the
tially overlapping services as separate units, each compensating for dif- risk of losing offset benefits due to natural disturbances or stochastic
ferent impacts (Robertson et al., 2014). In designing mitigation policies, events in functional assessments, but likely challenging due to model
policymakers need to determine whether to allow stacking, a decision and capacity limitations. This, and other similar factors may need to be
that may influence whether offset activities deliver a credible environ- accounted for in a ratio even when functional assessments are done.
mental benefit without unintended of un-assessed ES. For ES, the inclusion of some factors in ratio calculation will depend
on whether the impact and offset assessments include value, or stop at
2.3.4. Mitigation replacement ratios service delivery. For example, all impact assessments have some as-
Offset policies generally seek no-net-loss or net-gain outcomes for sumed timeframe into the future over which the impact of the develop-
conservation (McKenney and Kiesecker, 2010; Quétier and Lavorel, ment is being captured. For ES impacts, the longer into the future the
2011; Gardner et al., 2013). For these outcomes to be achieved, practi- impact will persist before the offset fully restores the benefit to society,
tioners need to develop a framework that estimates how much an offset the more value is lost. Economists generally agree that people value a
project compensates for project impacts and to help identify which off- benefit more if they are able to experience it today than if they were
sets maximize conservation return by delivering the highest-value to experience it in the future. To reflect this preference economists com-
conservation at the lowest cost and risk. Under existing policies, offset monly use discount rates to reflect the difference in value attributed to
benefits are often estimated using mitigation replacement ratios, benefits received today versus in the future. Ecosystem service impact
which establish the number of credit units that must be created by and offset assessments that do monetary valuation of services and in-
an offset action to compensate or replace one unit of loss at the clude a net present value estimate account for this difference in value
project site. The most common current practice is to define offsets preference, while impact assessments that do not use this method will
in habitat area units. For example, a ratio of 4:1 would mean that miss it. Put another way, if ES impacts and offsets are not compared in
100 impacted hectares of habitat would need to be offset by 400 ha value terms and a discount rate is therefore not used, then the assess-
of the same habitat elsewhere. ment implicitly applies a discount rate of zero meaning that stake-
There are no standard practices for establishing mitigation ratios, holders do not have any preference for the timeframe of impacts and
and ratios vary dramatically. Common values are reported below 10:1, offsets that occur today relative to in the future. Many standard eco-
reaching higher ratios in some cases (Moilanen et al., 2009; McKenney nomic valuation methods include discounting, and some tools for com-
and Kiesecker, 2010; Saenz et al., 2013a). Ratios are often negotiated, in- pensation calculation do as well (e.g. Habitat Equivalency Analysis
consistently representing the many factors that are likely to determine (HEA) and the Resource Equivalency Analysis (REA) (Snyder and
the actual match between impact levels and offsets. Both biodiversity Desvousges, 2013)). When such methods or tools are used, additional
and ecosystem service ratio calculations would benefit from a consis- factors are not needed to adjust ratios for this concern.
tent approach that considers a standard set of variables, and matches Non-value based assessments could potentially approximate time
the importance and relevance of those variables to the context and the rate preferences through mitigation ratios (as is done in some biodiver-
assessment methods used. sity assessments, e.g. Denne and Bond-Smith, 2012), though this would
Based on a literature review of commonly considered offset factors, need to be explicitly discussed among stakeholders to ensure clarity on
we introduce a factor set that can serve as the starting point for a stan- the purpose of this approach and context-specific preferences. The need
dard approach to BES ratio calculation (Table 1). Factors fall into three for time discounting has also been recognized for biodiversity impacts
general categories: the magnitude of impact, the quality of both the im- given that the losses to species and habitats are often more certain
pact site and the potential offset site and the mitigation method used to than are the offset benefits in the future (e.g. given restoration time
create the offset. lags and uncertainty of success) (Overton et al., 2013).
The relevance of nearly all commonly-considered factors seems to Overall, there is no conceptual reason that the potential set of factors
be determined by the method used to calculate impacts and offset po- used in ratio determination for BES should vary dramatically from site to
tential. As discussed above, the common practice of using habitat area site. A consistent approach can be developed, and could start by
 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34 31

Table 1
Biodiversity mitigation ratio factors and their applicability for ecosystem services offsets.
Modified with permission from Mandle et al. 2013.

Condition Relevance to biodiversity Relevance to ecosystem services

associated
with a Production Production
higher Area- or Functional Area- or function, function,
Concept Factor Example metric offset habitat-based assessment habitat-based delivery value Ecosystem service considerations

More
Type of Mine, road, damaging
Yes No Yes No No
development agriculture type of
development
Wetland
function at site
prior to impact,
value of service
Impact site x at site prior to Higher
condition impact function Yes No Yes No No
Target loss
rate(s) from
other drivers,
sensitivity of More
target(s) to type vulnerable
Vulnerability of development targets Yes No Yes No No
Time frame of Longer
Magnitude
Duration of proposed development
of impact
impact development term Yes No Yes No No
Rarity is conceptually equivalent to
service scarcity, where a service
that is more scarce is more
valuable. Valuation impact
Number of rare More rare estimates would capture any
species at species or stronger social preference for a
Rarity of target(s) impact site habitats Yes No Yes Yes No more scarce service.
Strength of Monetary impact assessments that
desire to serve included a future time frame of
Intergenerational future Stronger impact and a discount rate would
equity generations desire Yes Yes Yes Yes No directly capture this.
Most ecosystem service impact
assessments are likely to have
Variance in associated uncertainty that should
Uncertainty of impact Higher be considered when setting an
impact estimate estimates uncertainty Yes Yes Yes Yes Yes offset requirement.
Similarity of site Poorer
conditions Habitat type, match
Yes No Yes No No
(in-kind vs. level of function between
out-of-kind) sites
Production-function approaches
generally link services to
beneficiaries in space, so would
Distance, within capture important serviceshed
Distance from impact Farther from context. Area- or habitat-based
impact site watershed impact site Yes Yes Yes No No assessments likely would not.
Probability of This is not currently applied to
development Higher biodiversity, but is relevant. Most
Quality of
shifting to probability assessments do not capture
offset
Leakage another area of leakage Yes Yes Yes Yes Yes probability of leakage.
Even functional assessments of
Frequency of Higher biodiversity and ecosystem services
Risk of natural fire, freqeuncy frequency of may not include natural disturbances
disturbance of floods disturbance Yes Maybe Yes Maybe Maybe in impact and offset estimates.
Functional assessments of offsets
may not include future scenarios of
cumulative impacts or losses due to
Probability of other drivers of change. If these are
development, captured in the offset estimate,
deforestation Lower risk of then they do not need to be
Additionality rate development Yes Maybe Yes Maybe Maybe included in a ratio.
Historical
Lower rate of
Risk of failure success rate of Yes No Yes No No
success
method
Time period to
recover Longer
Mitigation
Time lag of target(s) to recovery
method
recovery desired level time Yes No Yes No No
Historical Shorter
average period of
duration of outcome
Perpetuity method success persistence Yes No Yes No No
32 H. Tallis et al. / Environmental Impact Assessment Review 55 (2015) 21–34

choosing factors for ratio calculation based on what is not captured in Further, many countries stop their legal requirements at the impact as-
impact and offset assessments (e.g. Table 1). We have provided a sessment stage, failing to require compensatory mitigation for allowed
starting point for such an approach, but further work is needed to devel- impacts. Similarly missing are government regulations and capacity to
op a method for combining relevant factors into defensible equations move ES mitigation requirements from law into practice.
that can be used to assign ratios in a rigorous and replicable approach. Despite the remaining challenges, impact assessment and mitigation
processes provide one of the best opportunities to incorporate BES in-
3. Conclusions formation into land use decisions through widely adopted environmen-
tal regulations. The establishment of ES concepts and approaches has
Many calls have been made for the inclusion of ecosystem services in brought renewed attention and opportunity to the improvement of im-
the mitigation hierarchy (Boyd and Wainger, 2003; Geneletti, 2011; pact assessment methods. The integrated framework we present builds
Baker et al., 2013), yielding policy requirements in some arenas (IFC, on the experience of biodiversity mitigation and address the unique op-
2012; Villarroya et al., 2014). We propose a comprehensive framework portunities and challenges presented by ES mitigation. By conducting
for advancing both biodiversity and ecosystem service mitigation. De- integrated BES impact assessments and mitigation actions, we will
spite challenges with implementing biodiversity mitigation, work to have a more robust opportunity to meet the joint environmental and
date forms a useful starting point for ES mitigation. Within the uni- social intents of most laws that call for them.
fied framework we present, we offer a means for choosing represen-
tative ES targets alongside biodiversity targets, define and identify
servicesheds as a useful spatial unit for ES impact and offset assess- Acknowledgements
ment, and initiate a means for consistent calculation of BES mitiga-
tion ratios. We emphasize the need to move away from area- and This work has been funded by an anonymous foundation and The
habitat-based assessment methods for BES and towards functional Gordon and Betty Moore Foundation (#2996).
assessments at landscape or seascape scales that more accurately
and comprehensively reflect cumulative impacts and variation in en-
vironmental quality, social needs and value preferences. References
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Alkemade, R., van Oorschot, M., Miles, L., Nellemann, C., Bakkenes, M., ten Brink, B., 2009.
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tle about how to define appropriate BES thresholds that can help iden- sity loss. Ecosystems 12, 374–390.
tify critical areas to avoid development (Huggett, 2005; Chaplin- Anderson, B.J., Armsworth, P.R., Eigenbrod, F., Thomas, C.D., Gillings, S., Heinemeyer, A., et
al., 2009. Spatial covariance between biodiversity and other ecosystem service prior-
Kramer et al., 2015). Worth special attention is the challenge in setting ities. J. Appl. Ecol. 46, 888–896.
ES thresholds of how we weigh and capture potential future ES needs Arkema, K.K., Guannel, G., Verutes, G., Wood, S.A., Guerry, A., Ruckelshaus, M., Kareiva, P.,
that will evolve with human population trajectories and shifting social Lacayo, M., Silver, J.M., 2013. Coastal habitats shield people and property from sea-
level rise and storms. Nat. Clim. Chang. 3, 913–918.
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Heather Tallis is the first female lead scientist in the history of The Nature Conservancy,
velopment by design in Colombia: making mitigation decisions consistent with con-
where she founded and directs the organization's Human Dimensions Program (HDP),
servation outcomes. PLoS One 8, e81831.
an initiative to bring human well-being considerations into conservation practice from
Slootweg, R., Vanclay, F., van Schooten, M., 2001. Function evaluation as a framework for
the planning stage forward. HDP advances the use of ecological, social and economic sci-
the integration of social and environmental impact assessment. Impact Assessment
ences in conservation and natural resource decision-making. Heather's current scientific
and Project Appraisal 19, 19–28.
inquiries focus on expanding our understanding of how nature intersects with every-
Snyder, Joan P., Desvousges, William H., 2013. Habitat and Resource Equivalency Analyses
day life, focusing on education, health and water consumption.
in Resource Compensation and Restoration Decision Making. Nat. Resour. Environ. 28
Before joining the Conservancy in 2013, Heather was a lead scientist at the Natural Capital
(1), 3.
Project, where she led the development of a pioneering software application (InVEST) that
Tallis, H., Polasky, S., 2009. Mapping and valuing ecosystem services as an approach for
reveals the ecosystem service costs and benefits of land and water use decisions. At the
conservation and natural resource management. Ann. N. Y. Acad. Sci. 1162, 265–283.
Natural Capital Project, Heather also helped develop a new free software tool – RIOS –
Tallis, H., Wolny, S., 2010. Including ecosystem services in mitigation. Report to
which uses biophysical, ecological and social data to help policymakers and others maxi-
Colombian Ministry of the Environment Mines and Territorial Development. Natural
mize the feasibility and effectiveness of watershed investments. RIOS will be used to de-
Capital Project, Stanford.
sign 40 new water funds in Latin America and Africa.
Tallis, H., Polasky, S., Lozano, J.S., Wolny, S., 2012a. Inclusive wealth accounting for regu-
Beyond model development, Heather has worked with governments, corporations and
lating ecosystem services. Inclusive Wealth Report 2012a: Measuring Progress To-
non-government groups to use science about nature's benefits to inform environmental
wards Sustainability. Cambridge University Press, Cambridge.
impact assessment, national accounting, land use planning, payment for ecosystem ser-
Tallis, H., Mooney, H., Andelman, S., Balvanera, P., Cramer, W., Karp, D., Polasky, S., Reyers,
vice design, and monitoring. She has guided research with diverse stakeholders across Lat-
B., Richetts, T., Running, S., Thonicke, K., Tietjen, B., Walz, A., 2012b. A global system
in America as well as in China, Indonesia, Malaysia, India, Tanzania and the United States.
for monitoring ecosystem service change. Bioscience 62, 977–986.
On the international stage, she holds leadership and expert advisory roles with the World
The Energy and Biodiversity Initiative, 2004. Good Practice in the Prevention and Mitiga-
Bank and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem
tion of Primary and Secondary Biodiversity Impacts. Conservation International Pub-
Services.
lications, Washington, D.C.
She received an M.S. in chemical oceanography from the University of California, Santa
Vigerstol, K., Aukema, J.E., 2011. A comparison of tools for modeling freshwater ecosystem
Cruz, an M.S. in marine ecology from the University of Otago in New Zealand and a Ph.D.
services. J. Environ. Manag. 92, 2403–2409.
in zoology from the University of Washington. Heather is a co-editor of the book, Natural
Villarroya, A., Barros, A.C., Kiesecker, J.M., 2014. Policy development for environmental li-
Capital: The Theory and Practice of Mapping Ecosystem Services, released by Oxford Uni-
censing and biodiversity offsets in Latin America. PLoS One 9 (9), e107144. http://dx.
versity Press in 2011.
doi.org/10.1371/journal.pone.0107144.