Recommendations for Alberta's Draft Conservation Offset Framework: Realizing True Market Potential

Abstract

In May 2015, the province released a Draft Conservation Offset Framework. This analysis offers constructive feedback for the draft framework in attempts to improve future revisions. This report finds that the province’s draft framework focuses primarily on conservation offset design elements. In contrast, there is very little mention of the best delivery mechanisms for conservation offsets. To fully realize conservation offsets as a market-based instrument, this analysis recommends embracing market mechanisms, complete with exchange and banking systems for effective offset delivery in the province. This analysis suggests that the next revision for Alberta’s Conservation Offset Framework should include a greater focus on market delivery and a demonstrated commitment to these mechanisms. This analysis goes on to suggest that in order to promote competitive conservation offset markets, certain aspects of the framework need to be reconsidered and modified. The potential market conflicts include: in-lieu fees, stacking, uncertainty, language, commitment, and objectives.