Habitat restoration has been employed in the context of ecological compensation, to offset negative impacts on ecosystems as a result of development projects. Compensation measures are aimed at maintaining the size and quality of ecological networks. These measures are decided on a case-by-case basis, as a response to development. Traditionally, there is a preference to restore the same type of habitat near the location of impact. This practice ignores three main issues however: 1) the current spatial configuration of ecological networks may not be sufficient to maintain species at the long term, given ecosystem dynamics and climate change, 2) conservation budgets are perhaps more effectively spent on restoration of other, scarcer habitat types, and 3) restoration costs and potential differ per location, for which there is scope to achieve conservation targets more cost-efficiently. Furthermore, the current reactive nature of compensation practice does not stimulate a strategic approach to conservation that is flexible in response to ongoing changes

Opdam, P.F.M.

Teeffelen, A.J.A., van

Vos, C.C.

English

Wageningen Yield 

6th European Conference on Ecological Restoration Ghent, Belgium, 8-12/09/2008 
 1
ECOTRADE – INVESTIGATING THE SUITABILITY OF 
TRADABLE PERMITS FOR BIODIVERSITY CONSERVATION 
IN CHANGING LANDSCAPES 
Astrid VAN TEEFFELEN 
1
 – Paul OPDAM 
1,2
 – Claire VOS
 2 
1 Department of Environmental Sciences, Wageningen University, P.O. Box 47 NL-6700AA Wageningen, 
The Netherlands, e-mail: astrid.vanteeffelen@wur.nl 
2 Landscape Centre, Alterra, Wageningen UR 
Abstract: Habitat restoration has been employed in the context of ecological compensation, to offset negative 
impacts on ecosystems as a result of development projects. Compensation measures are aimed at maintaining 
the size and quality of ecological networks. These measures are decided on a case-by-case basis, as a response 
to development. Traditionally, there is a preference to restore the same type of habitat near the location of 
impact. This practice ignores three main issues however: 1) the current spatial configuration of ecological 
networks may not be sufficient to maintain species at the long term, given ecosystem dynamics and climate 
change, 2) conservation budgets are perhaps more effectively spent on restoration of other, scarcer habitat 
types, and 3) restoration costs and potential differ per location, for which there is scope to achieve 
conservation targets more cost-efficiently. Furthermore, the current reactive nature of compensation practice 
does not stimulate a strategic approach to conservation that is flexible in response to ongoing changes.  
Market-based policy instruments like tradable permits have characteristics that could them make suitable for 
cost-effective biodiversity conservation in landscapes subject to economic development. The EcoTRADE 
project investigates the potential of tradable permits and habitat banking for achieving conservation targets in 
intensively-used landscapes such as Europe. An international, interdisciplinary team investigates policy, 
economic and ecological aspects of such instruments. The ecological questions concern the trade-offs in 
habitat network size, spatial configuration and temporal fluctuations in habitat suitability (resulting of market 
activity) on species persistence. Also the role of habitat development time is investigated.  
Keywords: land-use change; identifying appropriate conservation and restoration objectives; biodiversity 
policy; socio-economics of nature restoration; tradable permits; cost-effective conservation 
 
Introduction 
Intensively-used landscapes have limited space to meet society’s economic, social and 
environmental needs. Hence, it is impossible to prevent collision between biodiversity 
conservation and economic development at all times. Economic development at the cost 
of (inter)nationally important areas for biodiversity conservation is in particular cases 
considered acceptable, on the condition that the impact is offset. Offsets can be realised 
by by providing habitat compensation measures (European Commission 2007). Legal 
requirements for habitat compensation generally state that the quality and connectivity 
of the ecosystem network should be maintained (No Nett Loss; VROM 2004; European 
Commission 2007). In practise, this results typically in restoration of the same habitat 
type as was destroyed, at a location near to the place where the impact takes place (Fig. 
1A). 
 
The current biodiversity conservation policy has a goal to maintain or improve the 
status of species and ecosystems. It is therefore that damages are prevented where 
possible, or offset by compensation measures where economic development is given 
priority. Since habitat loss is the main driver of biodiversity decline worldwide, 
protection seems a logical and necessary policy tool to safeguard remaining natural 
Towards a sustainable future for European ecosystems – Providing restoration guidelines for 
Natura 2000 habitats and species 
 2
areas. The policy to restore similar habitat near the place of impact aims at maintaining 
a status quo of current conditions. However, this practice ignores three main issues:  
 
1) The current spatial configuration of natural sites may not be sufficient to maintain 
species at the long term. Individual sites may not be large enough or of sufficient 
quality to support sustainable populations. In addition, the connectivity between the 
patches of the network may not be sufficient for species to (re-)colonise sites; a 
prerequisite for regional persistence in the presence of local extinctions. Hence, 
restoration of similar sites close to the lost site (Fig. 1A) may be less effective than 
improving site area or connectivity elsewhere in the network (Fig.  1B). 
 
2) Conservation budgets may be spent more effectively on restoration of other, scarcer 
habitat types. Some ecosystem networks may be large and well connected, while others 
are small and dispersed. In-kind compensation (i.e. restoring the same habitat type in the 
same network; Fig 1A and 1B) may not be required for persistence of species in a large 
network, while increasing the size or connectivity of a different, small network may 
enhance the persistence probabilities for species depending on that network (Fig. 1C). 
 
3) Restoration costs and potential differ per location (spatial heterogeneity), for which 
there is scope to achieve conservation targets more cost-efficiently. Instead of 
compensating for a site in a region with large urban pressure (high land prices) or of low 
potential, the same budget could be spent on the restoration of more habitat at cheaper, 
or more suitable locations. 
A B C 
Habitat A 
Habitat B 
Lost patch 
Restored patch A 
Restored patch B 
Figure 1. Examples of ecological offsets. A) Offset near impact location, same habitat type 
(standard compensation strategy). B) Offset at preferable location, same habitat type. C) Offset at 
preferable location, different habitat type. 
6th European Conference on Ecological Restoration Ghent, Belgium, 8-12/09/2008 
 3
 
According to the No Nett Loss principle, compensation should be realised before habitat 
is lost elsewhere (Fig 2A). In practise however, compensation areas are often only 
established simultaneously or after the impact has taken place. This causes a drop in 
habitat availability over time (Fig. 2B), which can be detrimental in small networks. 
Together with the fact that the outcome of restoration exhibits uncertainty (Moilanen et 
al. 2008), the rate of success of compensation can only be assessed after a given amount 
of time. 
 time
Ec
ol
og
ic
al
 v
al
ue
Restoration
Impact
 
Figure 2. The effect of habitat loss and restoration on ecological value (e.g. habitat area, population vialility) 
over time. A) Habitat banking, no nett loss in ecological value due to realisation of compensation areas before 
the impact is allowed to take place. B) Habitat borrowing, a drop in ecological value due to delays in 
restoration, which occurs simultaneously with impact. The bars indicate the uncertainy in restoration outcome 
over time. 
 
Given these points, the current compensation practice can be characterised as being 
reactive, only responding to development and aiming at maintaining status quo. In 
intensively-used landscapes economic development is an ongoing process and conflicts 
between conservation and economic growth are not limited to a few cases. Therefore, a 
reactive approach to conservation is not likely to achieve conservation benefits cost-
effectively. Instead, conservation strategies could anticipate to a given level of habitat 
turnover, and aim for robust habitat networks that are resilient to such turnover. This 
requires a proactive, strategic and flexible conservation policy. 
 
The EcoTRADE project 
The limitations of current static conservation practices, the notion that species and 
ecosystems are essentially able to adapt to changing conditions, and the ongoing 
demand for economic development has resulted in the EcoTRADE project 
(http://www.ecotrade.ufz.de). The 3-year project (2007-2009) is part of the 
EURODIVERSITY programme of the European Science Foundation. An international 
team of experts in ecology, economy and ecological-economic modelling aims to 
investigate the feasibility of market-based policy instruments (in short, ‘tradable 
permits’) for cost-effective biodiversity conservation.  
 
Tradable permits have been successfully applied in other fields of environmental 
protection, and they are gaining increasing attention for biodiversity conservation, in 
relation to biodiversity and habitat banking systems (see e.g., Carroll et al. 2008). 
Towards a sustainable future for European ecosystems – Providing restoration guidelines for 
Natura 2000 habitats and species 
 4
Potential benefits of tradable permits compared to current top-down planning include: 
1) Cost-effectiveness (reaching conservation goals at lower cost); 2) Reaching a fixed 
ecological target (if rules are strict); 3) Increasing ecological value or area (depending 
on the habitat exchange rates); 4) Higher stakeholder acceptance; 5) Flexibility to 
changing economic or ecological conditions. EcoTRADE aims to identify under what 
conditions these potential benefits may be realised.  
 
From the ecological perspective, the following questions are to be addressed:  
What are the relationships and potential thresholds between species viability and: a) 
Spatial network characteristics (carrying capcity, connectivity) and b) Temporal 
network characteristics, due to habitat loss and restoration (disturbance extent, spatial 
dependency in disturbance, disturbance intensity and frequency)? How are these 
relationships affected by: 1) differences in species characteristics (dispersal capacity, 
fecundity, area requirements, longevity), and 2) differences in habitat properties (the 
restoration time, habitat life time (before it becomes unsuitable, due to e.g. succession)?  
 
Insight in these relationships would allow to identify for which habitat types and species 
a more flexible conservation approach would be feasible. Furthermore it would provide 
criteria for the design of tradable permit markets. Although the political interest in such 
instruments is on the rise, there is at present little knowledge on the nature of the 
relationships described above (Van Teeffelen et al. in prep). This highlights the need to 
further investigate the relationships between spatio-temporal habitat turnover and 
species viability, simultaneously incorporating state-of-the-art knowledge on ecological 
restoration processes.  
 
Conclusions 
Current conservation policy is aimed at maintaining a static habitat network, while 
intensively-used landscapes are characterised by turnover in habitat suitability (habitat 
areas are lost and restored). As a result, conservation targets are not met cost-
effectively, and the policy does not allow for strategic conservation decisions adapting 
to change. Within EcoTRADE we investigate ecological and economic conditions under 
which tradable permits could provide a cost-effective, flexible policy instrument to meet 
conservation goals.  
 
References 
Carroll, N., J. Fox, and R. Bayon, editors. 2008. Conservation and biodiversity banking: A guide to setting up 
and running biodiversity credit trading systems. Earthscan, London. 
European Commission. 2007. Guidance document on Article 6(4) of the 'Habitats Directive' 92/43/EEC. 
European Commission, Brussels. 
Moilanen, A., A. Van Teeffelen, Y. Ben-Haim, and S. Ferrier. 2008. How much compensation is enough? A 
framework for incorporating uncertainty and time discounting when calculating offset ratios for impacted 
habitat. Restoration Ecology, in press. 
Van Teeffelen, A. J. A., C. C. Vos, and P. F. M. Opdam. in prep. Species in a dynamic world: Reviewing 
consequences and opportunities of habitat network dynamics for conservation planning. 
VROM. 2004. Nota Ruimte: Ruimte voor ontwikkeling (Spatial planning report, Dutch ministry for Housing, 
Spatial Planning and the Environment), Den Haag. 


Conservation and biodiversity banking: A guide to setting up and running biodiversity credit trading systems.

Guidance document on Article 6(4) of the 'Habitats Directive'

How much compensation is enough? A framework for incorporating uncertainty and time discounting when calculating offset ratios for impacted habitat. Restoration Ecology, in press.

Nota Ruimte: Ruimte voor ontwikkeling (Spatial planning report, Dutch ministry for Housing, Spatial Planning and the Environment),

EcoTRADE : Investigating the suitability of tradable permits for biodiversity conservation in changing landscapes

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EcoTRADE : Investigating the suitability of tradable permits for biodiversity conservation in changing landscapes

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