Synergies and Trade-Offs between Biodiversity and Carbon in Ecological Compensation

Eshetu Yirdaw (), Markku Kanninen and Adrian Monge
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Eshetu Yirdaw: Viikki Tropical Resources Institute (VITRI), Department of Forest Sciences, University of Helsinki, P.O. Box 27, FI-00014 Helsinki, Finland
Markku Kanninen: Viikki Tropical Resources Institute (VITRI), Department of Forest Sciences, University of Helsinki, P.O. Box 27, FI-00014 Helsinki, Finland
Adrian Monge: Viikki Tropical Resources Institute (VITRI), Department of Forest Sciences, University of Helsinki, P.O. Box 27, FI-00014 Helsinki, Finland

Sustainability, 2023, vol. 15, issue 15, 1-14

Abstract: Ecological compensation, which is widely applied, is presumed to be an important mechanism to address environmental degradation that commonly occurs due to activities related to development projects and resource use. The objectives of this review are to investigate synergies and trade-offs between biodiversity and carbon offset, the challenges in their implementation, and the potential of biodiversity and/or carbon offsets to be used as a proxy for other ecosystem functions in the implementation of ecological compensation. In comparison to carbon offsets, the implementation of biodiversity offsets are more challenging due to difficulties in biodiversity measurement, determining ecological equivalence, the relatively longer time taken, the higher level of uncertainty, the uniqueness of ecosystems, and the irreversibility of species loss. Generally, there is a positive relationship between biodiversity and carbon stocks; however, there are also cases where there are no clear or even negative relationships between biodiversity and carbon stocks. Ecosystem functions are directly or indirectly affected by environmental degradation, and ecological compensation measures usually compensate for only a few components of the ecosystem functions. Since biodiversity is interconnected and underpins ecosystem functions, it has the potential to be used solely or as one of the proxies. However, we recommend developing a sound methodology to rank the important ecosystem functions and identify the few ecosystem functions, which can be used as proxies to indicate the achievement of ecological compensation goals.

Keywords: ecological equivalence; biodiversity offsets; carbon offsets; ecosystem functions; environmental degradation; restoration (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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