The Offsets assessment guide (XLSM 51.2 KB) (OAG) is a tool that has been developed for expert users in the department to assess the suitability of offset proposals. The guide is also available to proponents to assist with planning and estimating future offset requirements.
The following information is best understood when the OAG is also open for you to see.
The OAG is available on the environmental offsets policy webpage.
The OAG is used for direct offsets for threatened species and ecological communities. It can also be used to estimate the potential financial contribution required for an indirect offset.
The OAG works as a balance sheet where information about the impact site and the species or community being impacted is entered on one side and details about an offset on the other. The OAG then compares the two and will show you, via a percentage, if what you are proposing is likely to be a sufficient offset.
This guide explains how some of the OAG inputs are used. Although the OAG is published on the department’s website and available to the public, final scores are determined by the minister, usually as part of the process of deciding whether to grant an approval and on what conditions.
Offsets assessment guide structure
The most common form of offset is a direct offset, which involves protecting and improving an area of land that supports a protected matter (for example, a nationally significant plant, animal, or ecological community).
The top half of the OAG allows the department to calculate offset requirements with separate rows for area of community (for listed threatened ecological communities) and area of habitat (for listed threatened species). Below this are several other rows which can be used for things that are measured as whole numbers or percentage change rather than area. These are labelled the protected matter attributes rows.
For example, there is a row named number of features that can be used if you are clearing a set number of nesting hollows. There is also a row for mortality rate. This can be used to estimate the percentage by which the number of road kills may increase because of your action.
Matter of National Environmental Significance box
Located at the very top of the OAG, the matter of environmental significance box records what species or ecological community the offset will be for, and its listing status. You can only enter one species or community at a time. Separate calculations in the OAG will be required for each threatened species or community being impacted.
For example, if you are impacting habitat for the striped legless lizard, you enter its name and a vulnerable status. For mallee emu-wren habitat you would enter an endangered status.
The listing status then calculates an annual probability of extinction. This is used to adjust the offset requirements, based on how long it will take for the offset to be provided and the likelihood that the species will become extinct in this time. The higher the annual probability of extinction score is, the larger the offset will need to be.
On the left side of the OAG, the impact calculator is where information about the impact site is entered. For area measurements you enter the total area of habitat or area of community impacted (in hectares) and the habitat quality for that area.
If habitat quality varies across the impact site (for example, 3 hectares of poor-quality habitat and 6 hectares of excellent quality habitat), use separate calculations rather than average quality across the entire site. The area value relates only to the area that the listed species or community uses, not the entire development area. Once the area and quality are entered the OAG will automatically calculate the total quantum of impact and carry this over to the offset calculator side of the OAG.
Similarly, for the protected matter attribute rows, information about the impact is entered on the left side of the OAG. Here whole numbers or percentages are used. For example, if you are clearing 10 black cockatoo nest hollows, the number 10 is entered in the quantum of impact box in the number of features row. If your impact was a 20% increase in the likelihood of a Tasmanian devil being run over by a car, then you enter 20 in the quantum of impact box in the mortality rate row. The quantum of impact will be automatically calculated on the offset side of the OAG once the impact side is complete.
The right-hand side of the OAG is the offset calculator. This is a little more complicated than the impact calculator. There are more inputs to measure, such as time, likelihood of the site being totally lost, quality changes, and the confidence in the values entered.
Time horizon calculations
Time horizon relates to the time difference between the impact and the delivery of the offset. For the area of community row, the time horizon column is split into a risk-related time horizon and time until ecological benefit. For the area of habitat row, it is split into time over which loss is averted and time until ecological benefit. The time horizon is always measured in years. The risk-related time horizon and time over which loss is averted are based on the time over which changes in the level of risk to a site are measured. They are capped at 20 years or the life of an offset, whichever is shorter. The time until ecological benefit measures how long it will take to reach the future quality with offset score.
Risk of loss
Risk of loss is the chance that habitat set aside as an offset for protected matters (including nationally significant plants, animals, and ecological communities) will otherwise be permanently lost in the foreseeable future. Risk of loss accounts for any clearing of a site which might not be regulated under Commonwealth, state or territory environmental law.
In calculating offsets, the OAG looks at how protecting an offset site can reduce the risk of loss. For example, an offset site of 100 hectares with a risk of loss of 5%, has a 95% chance that, in the future, the offset site would support the protected matter. The OAG uses these figures by imagining the site is representative of the broader region and assuming that, without protection only a proportion of that site would maintain value in the future. That proportion is 95% or the equivalent of 95 hectares.
If the risk of loss was reduced to 0% by protecting the offset site with a conservation covenant, then 100% or 100 hectares would be protected into the future. This means there has been a raw gain of 5 hectares through offsetting.
Quality score changes
The OAG also considers how the habitat or vegetation quality will change over time, with and without an offset. Quality scores consider how plants and animals use a site; the health and quality of the vegetation; and how important the area is compared to others in the region.
The OAG measures both the score the offset site would reach if left alone (future quality without offset), and the score it will reach if protected and managed (future quality with offset). The difference is used in the calculations. For example, if a site has a start quality of 7 and would remain at 7 if not used as an offset, the future quality without offset score would be 7. However, if it were protected and weed management activities taken, the future quality with offset score will be an 8. This means there has been a raw gain of 1 point. In most cases the difference in quality score between the start quality and the future quality with and without offset scenarios is capped at 1 point. Strong scientific evidence demonstrating a greater change is possible is required to deviate from this figure.
Confidence in result
It is hard to be certain about changes in risk of loss or quality scores that might not happen until many years in the future. The OAG has a column called confidence in result to account for this. It is a percentage score that will adjust the raw gain scores. If you had a raw gain of 10 hectares from your risk of loss calculations, but only a 90% confidence the reduction in risk would occur, or that the original values were correct, the adjusted gain score would be 9 hectares. Similarly, if you had a raw gain of 1 point from your quality score change but were only 70% confident you could achieve this, the adjusted gain would be 0.7 points.
Percentage of impact offset
Once the OAG has been filled in correctly it will tell you what percentage of your impact will be offset. At least 90% of your offsets should be direct offsets, unless you can prove that a larger indirect offset provides a greater benefit to the species or community, or scientific uncertainty is so high that it is not possible to determine a direct offset that is likely to benefit the protected matter. If you have not offset enough of your residual impact, you may need to increase the size of the offset site or look at ways you can improve the quality of the offset.
The final part of the OAG is the summary box. This is used if the direct offset is between 90% and 100% to give an idea of how much money might need to be spent on indirect offsets (other compensatory measures).
If the OAG has been correctly completed, most of the relevant rows in the summary box will be pre-filled. To finish the calculations, an estimate of cost for delivering the direct offset should be added to the offset calculator. This includes costs for purchasing and managing the land for the period for which the offset is required.
Once this information is added, the summary box will give an estimate of how much should be spent on indirect impacts to reach a 100% offset. It is highly recommended that all cost analysis is undertaken by a suitably qualified person. In some cases, you may wish to engage a fund manager to ensure that money is appropriately spent on the actions identified as required to effectively deliver the offset into the future.