In April 2009, the French government’s strategic analysis centre (Centre d’Analyse Stratégique) published a major report on economic valuation of biodiversity and ecosystem services, with a specific emphasis on the French legal and socio-economic context. The report, led by Bernard Chevassus-au-Louis, is available here in pdf (in French).
The report demonstrates the French state’s embrace of the ecosystem service concept, which was still unfamiliar in the country before the Millennium Ecosystem Assessment’s report of 2005 (which has not yet been translated to French). In fact, the transposition of the EU directive 2004/35/CE on Environmental Liability into French law provides – in 2008! – the first legal mention of the ecosystem service concept in France (L.161-1, I of the Code de l’Environnement).
The report mainly discusses options for incorporating ecosystems and biodiversity into public policies using their economic value for cost-benefit analyses. In this respect, the conclusions are rather unsurprising. In fact, the most interesting part of the report is a nicely written introduction to the place of biodiversity and ecosystem services in French law, (probably) written by Gilles Martin (Chapitre III – L’approche juridique, page 68).
Environmental liability in Europe: From monetary damages to like-for-like compensation
The chapter details how the recent EU directive on environmental liability has changed how impacts on biodiversity and ecosystems (“nature”) are considered under French law by bringing back to the fore the concept of compensation (offsetting).
It argues that the dominant practice in France and Europe was to repair impacts through damage payments with both moral and (later) ecological damages being recognized ; in addition to classical punitive damages that do not aim to repair losses but to maintain public order (e.g. fines for killing protected species). The Environmental Liability directive explicitly excludes monetary damage payments and requires like-for-like compensation, under a three step framework:
Remedying of environmental damage, in relation to water or protected species or natural habitats, is achieved through the restoration of the environment to its baseline condition by way of primary, complementary and compensatory remediation, where:
(a) “Primary” remediation is any remedial measure which returns the damaged natural resources and/or impaired services to, or towards, baseline condition;
(b) “Complementary” remediation is any remedial measure taken in relation to natural resources and/or services to compensate for the fact that primary remediation does not result in fully restoring the damaged natural resources and/or services;
(c) “Compensatory” remediation is any action taken to compensate for interim losses of natural resources and/or services that occur from the date of damage occurring until primary remediation has achieved its full effect;
(d) “interim losses” means losses which result from the fact that the damaged natural resources and/or services are not able to perform their ecological functions or provide services to other natural resources or to the public until the primary or complementary measures have taken effect. It does not consist of financial compensation to members of the public.
Where primary remediation does not result in the restoration of the environment to its baseline condition, then complementary remediation will be undertaken. In addition, compensatory remediation will be undertaken to compensate for the interim losses.
These three steps – avoidance, reduction and compensation – are those were deemed central to any offsetting scheme by BBOP.
Establishing ecological equivalence: Trading apples and oranges
Before the shift brought about by the Environmental Liability directive, different methods were available for calculating damages:
Some components of biodiversity such as game species have established monetary values and can be used to calculate damages if the number of individuals lost is known.
Damages could be based on the cumulative cost incurred in the prior management of the impacted resource (ecosystems or populations).
The cost of restoring the resource to its previous state is another alternative for calculating damages.
These methods are unavailable to like-for-like compensation. Biological or ecological criteria are required for comparing impacts on resources and restoration effects (or compensation gains). Thus, as other government or NGO reports before it (for example the IUCN’s seminal report on business and biodiversity), the French government’s report recognizes the central issue of assessing ecological equivalence.
Conservation banking in France
The report also mentions the recent creation, in 2008, of the “Biodiversité” subsidiary of the Caisse des Dépôts et Consignations (CDC), a French public bank which mainly funds infrastructure and public housing schemes. In biodiversity related compensation schemes, CDC-Biodiversité positions itself as a third party actor that can facilitate links between developers from whom compensation is required, land-owners who can provide land for compensation schemes, environmental organisations who can restore and manage ecosystems to actually provide the compensation and the public authorities who oversee the whole process. I will later post a more complete introduction to CDC-Biodiversité‘s role in the development of conservation banking in France. Stay tuned!
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