Increasingly Colliers’ Alternative Infrastructure business is being engaged by property groups and businesses to provide advice on how to navigate biodiversity and carbon offsetting, writes George Wragge, Director of Alternative Infrastructure at Colliers. Understanding the liabilities generated through ‘business as usual’ activities, or as a direct impact of anticipated development activity, is quickly becoming one of the most sought after pieces of advice requested. The underlying question our clients are asking is, “what is the most cost effective way to offset liabilities?”
Under new development guidelines imposed by state government, all new developments, whereby a natural landscape is being impacted, are required to produce a Biodiversity Development Assessment Report (BDAR). In circumstances where threatened or endangered species are displaced, a BDAR will look at how to work through minimising/avoiding the impacts on the local ecosystem ensuring that there is no net loss of biodiversity, and if need be, recommend that biodiversity credits are purchased to supplement development activities. When it comes to purchasing these credits, many developers and businesses want to be advised of the most efficient and cost effective way forward.
Once a developer or business understands the landscape and anticipated development liabilities, the next question they ask is, “do we buy an ‘off the shelf’ solution or are we able to develop our own project?”
The Biodiversity Conservation Trust (BCT) acts as a marketplace for ‘off the shelf’ solutions and has a range of offsets available through other local landholders putting in place stewardship agreements. Stewardship agreements are established between landholders and the BCT whereby the landholder agrees to manage and protect their defined project for perpetuity and in doing so counteracts the displacement of another local ecosystem disturbed by development. The value of credits set is based on a species’ vulnerability and the extent to which those credits are being sought after. The biggest challenge for many developers in purchasing credits is the associated cost as well as any potential impacts on the project’s feasibility.
The alternative to buying ’off the shelf’ solutions is for the developer to initiate their own stewardship agreement on land in close proximity to the development site; assuming that the land in close proximity is home to the same species and ecosystem being impacted. Whilst this way forward can produce significant savings (anywhere from 50-70%), there are a number of responsibilities that the project developer must adhere to. For example, the requirement to search for, acquire and develop a suitable piece of land and responsibly manage that land to foster the project for perpetuity. Whilst these tasks are somewhat onerous, owning and developing your own project has a number of tangible benefits such as education and stakeholder engagement, the ability to develop a distinct marketing angel, and the opportunity to add value through eco-tourism.
Whilst the development process has undergone significant changes recently, forward thinking developers and businesses are looking at turning their liabilities into assets through tangible stakeholder and community projects. For more information on how to offset anticipated liabilities through carbon and biodiversity credits, please reach out to our Alternative Infrastructure experts today.
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