Environmental Finance: A Comprehensive Analysis Report

This report, titled "Studies in Environmental Finance," delves into the concept of biodiversity offsets as a mechanism to address environmental impacts caused by human activities. It highlights the evolution of this concept and its increasing relevance in environmental regulations. The report discusses various environmental problems such as deforestation due to logging, impacts of mining activities on earth structure and biodiversity, and the effects of construction projects like dam construction. It emphasizes the importance of biodiversity offsets in improving ecosystem services and ensuring zero net loss of species, habitat, and ecosystem functions. The report also touches upon the valuation of biodiversity assets and provides examples of pricing variations for wetlands in the US. Finally, the report includes a bibliography of relevant sources used in the research.

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Studies in Environmental Finance
Introduction
For the last two decades, environmental policies have shifted their focus on using
economic incentives as a more efficient way of ensuring biodiversity conservation compared to
other traditional techniques. Biodiversity offsets is a term that refers to compulsory mechanisms
that are put in place to address the environmental impacts that are brought by various human
activities. The concept of biodiversity offset has existed for many years in the environmental
regulations of several countries; however, its implementation was not that common. Recently
this concept has gained political interests and many political agendas have endorsed it to be used
to address the impact of human activities on biodiversity. This essay discusses the various issues
the concept can address as well as several examples. The ecosystem is very valuable and its
existence affects so many components, therefore, we should control how the human activities
interfere with the ecosystem.
Types of Environmental Problems that can be Addressed
All over the world, the various human activities especially economic activities affect the
ecosystem make-up and this has to be addressed to ensure the environment is conserved. The
several human activities that have environmental impacts and have to be addressed using the
biodiversity concept include logging, mining, building and construction projects and many more
activities. Timber is an important product that we need but the cutting down of trees brings the
deforestation risks that contribute to the threatening global warming challenge. As much as we
need timber to meet the various human needs we have to put mechanisms in place that will

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ensure the environmental degradation it causes is compensated such as setting funds to promote
reforestation.
Mining activities mostly involve digging deep into the earth surface and this affects the
structure of the earth as well as disrupting both the living and non-living components found in
soil. This threatens the existence of some species and also open mines may be hazardous to
animals and human beings. The local and national government has to establish biodiversity
policies that ensure the environmental impacts of mining are contained to guarantee the
sustainability of the ecosystem. Other building and construction projects such as the construction
of dams have a direct impact on the environment and they should also be addressed using the
biodiversity offsets concepts.
The provision of ecosystem services can be improved by the use of biodiversity offsets.
The main objective biodiversity offsets are to ensure zero biodiversity net loss in terms of
species, habitat and ecosystem function. The biodiversity offsets improve the ecosystem services
because it ensures the government can align the environmental impacts with the organizations
causing it and they are forced to pay charges that are invested in mitigating the environmental
impacts.
The value of biodiversity assets determine the potential monetary terms. In the US for
example, the price per acre of wetland can fluctuate from US$24,000 for a non-riparian wetland
in North Carolina to US$653,000 for a tidal wetland in West Virginia.

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Bibliography
Bull, J.W., Suttle, K.B., Gordon, A., Singh, N.J. and Milner-Gulland, E.J., 2013. Biodiversity
offsets in theory and practice. Oryx, 47(03), pp.369-380.
Lindenmayer, D.B. and McAlpine, C.A., 2012. Faustian bargains? Restoration realities in the
context of biodiversity offset policies. Biological Conservation, 155, pp.141-148.
Madsen, B., Moore Brands, K. and Carroll, N., 2010. State of biodiversity markets: offset and
compensation programs worldwide.
Palmer, M.A. and Filoso, S., 2009. Restoration of ecosystem services for environmental markets.
Science, 325(5940), p.575.