Offsetting environmental impacts beyond climate change: the Circular Ecosystem Compensation approach

Abstract

Since the Paris Agreement entered into force, climate neutrality and associated compensation schemes are even more on the agenda of politics and companies. Challenges of existing offsetting schemes include the rather theoretical saving scenario and the limited scope of considered impacts. To address some of these limitations, this paper proposes the Circular Ecosystem Compensation (CEC) approach based on monetization of LCA results and Ecosystem Valuation. CEC consists of six steps: i) carrying out a life cycle assessment, ii) reducing the environmental impacts, iii) determining environmental costs applying monetization methods, iv) deriving the environmental value based on restoration costs methods, v) implementing the ecological restoration of ecosystems and vi) monitoring of the renaturation measures. Thus, CEC allows to offset a broad set of environmental impacts beyond climate change (e.g., acidification, eutrophication, land use, water use) in a real ecosystem by renaturation of degraded ecosystems. Environmental burdens and environmental benefits are balanced on a monetary basis, as the renaturation measures are monetized and used to compensate the monetized LCA results, e.g., of a product, organization or individual. In a case study, the implementation of the approach is presented to show the practical implementation of the CEC. The challenges of CEC include the integration of further impact categories, the availability of up-to-date and reliable monetization methods, the asynchrony and time-lag of the compensation from an ecosystem and biodiversity perspective and the proof of cost-efficiency of the renaturation measures. It is further discussed, if CEC can be a step beyond "climate neutrality" towards "environmental neutrality". The proposed approach should be further tested and is intended to foster progress in more comprehensive and robust offsetting of environmental impacts beyond climate change.

Keywords: Ecosystem valuation; Environmental neutrality; Life cycle assessment; Monetization; Offsetting; Renaturation.