Environmental offsets portfolio of the energy sector 

Terrasos is building a Portfolio of compensation alternatives for multiple projects of the Energy Sector. In developing this Portfolio a series of technical, legal, financial and strategic/institutional criteria were defined to select the areas and mechanisms for compensation. In addition, we have identified over 300 offset alternatives in 12 departments of Colombia, which have been entered into a tool that enables the decision-making process. This has been possible through arduous research of secondary sources and field exploration, added to a thorough collection of information through our meetings with environmental authorities, civil society and land owners.

   

An innovative trait of the Portfolio is the creation of a decision tree of modalities and methods of compensation, in order to understand the implications of each one of them and identify the required activities, costs and expenses for its development. Several financial assessments were also performed to fully comprehend the costs and expenses associated to each of these mechanisms and to identify those that offer the best cost-benefit ratio for each of the companies with offset obligations. In so doing, Terrasos has been able to develop a broad set of offerings of areas and alternatives, in favour of the sustainability and efficiency of the environmental offsets. 

Identifying compensation scenarios and mechanisms of 23.000 hectares

During 2018, Terrasos participated in identifying the offset scenarios and mechanisms for up to 23.000 hectares for one of the top-level companies in the Colombian and international mining sector. This exercise entailed the exploration of variables that would facilitate the implementation of biodiversity compensations under scenarios such as:

 

  • Compensation through the purchase of land

  • Compensation in land of the company’s property

  • Compensation in land inhabited by communities

  • Compensation in land where livelihood activities are performed

  • Compensation in land with agriculture practices in place

In addition, the project considered the risks of each one of the scenarios and the suitable mitigation measures. Moreover, the potential actors and the appropriate models for governance were established. In so doing, we offered our assistance to make sure that the compensations were developed under a technical, legal and financial approach, to ensure the sustainability and continuity of the investments made by those companies with such obligations.

 

Updating the Compensation Manual for the biotic component

Recently, the Ministry of Environment and Sustainable Development (MADS for its name in Spanish) adopted the update on the Manual de Compensaciones del Componente Biótico (Compensations Manual of the Biotic Component) through the Resolution 256 of February 22, 2018 (see Resolution here). The new version broadens its applicability to, not only projects that need to compensate for the loss of biodiversity, but also, to licenses for single forestry-use and to the temporary or definitive subtraction of national and regional forest reserves, where the MADS, the ANLA (National Authority for Environmental Licenses), the CARs (Autonomous Regional Corporations), the Grandes Centros Urbanos (Large Urban Centers) and other public environmental institutions are involved (see Manual here). Within the possibilities for offsets –preservation, restoration and sustainable use–, the Manual enables the implementation of Habitat Banks as a valid option (regulated under Resolution 1051, 2017).

In accordance with the new opportunities for biodiversity offsets indicated in the Manual’s update, Terrasos stands out as leader in the application of aggregated schemes for compensation, particularly through the mechanism of Habitat Banks and private agreements for conservation. Thus, we currently provide consultancy to important enterprises of various sectors (energy, infrastructure, hydrocarbons), offering alternatives to meet their environmental obligations by reducing transaction costs related to the search of land or fields to implement their compensation measures, negotiations with land owners, among others. We soon expect to launch some Habitat Banks projects that allow for resources of biodiversity offsets to be oriented towards the protection and restoration of highly vulnerable ecosystems, such as the Tropical Dry Forest.

 
 

Analysis of alternatives for compulsory investment plans of no less than 1%

Terrasos developed two compulsory water usage investment plans of no less than 1% for a linear project that cuts across several river basin areas of the country. For the elaboration of such plans, Terrasos applied a methodology to analyze over 50 investment options under a series of technical, financial, legal-institutional and strategic criteria, for the purpose of generating greater environmental and social benefits and returns. This work required a technical and legal analysis of the administrative acts related to each one of the environmental licenses and the study of declarations made by the environmental authorities.

Through this methodology it became possible to define the applicable geographic scope for the investment, thus identifying the river basin units and subunits where the projects could be implemented. The alternatives that enabled the investment were thus identified, stressing on those that would create greater environmental, economic and/or social benefits.

Once this was done, the different potential projects that the company could implement, in accordance with the suggested investment options for the identified geographic scope, were presented. Lastly, taking the projects selected by the company into consideration, the investment plans were elaborated and subsequently presented to the environmental authorities.

Structuring aggregated compensations

Terrasos analyzed the environmental requirements of one of the most important mining companies in the country, in order to propose a model for aggregated offsets, where several requirements were consolidated into one same project with only one management plan. For this purpose, an Integral Compensations Plan was elaborated, which was later presented to the environmental authorities as a proposal to meet the obligations associated to the company’s intervention. Later, the analysis, study and selection of the area was performed to later apply the compensations model following the requirements and criteria stablished by the company and the relevant environmental authority.

To select the place for the compensation activities, we did the technical, financial and legal structuring of an ecological reserve model proposal and we worked in strengthening the biodiversity offset strategy through the proposition of ecological units. Under this Project, Terrasos was able to apply key methodologies such as the “legal sustainability minimum of the biodiversity offsets” in order to secure the necessary legal conditions in implementing the compensation measures.

 

Ecosystem-based Adaptation program for the city of Cartagena

The German Cooperation Agency  (GIZ) has been working on the program Ecosystem-based Adaptation or “Program EbA”. This program is looking to implement strategies to the management, conservation and restoration of ecosystems, to ensure that they continue to provide the services that will enable people’s adaptability to the impacts of climate change. Additionally, one of its goals is to provide technical assistance for the integration of the EbA approach in plans, strategies and policy making, as well as to put it into practice and to contribute with it, to reducing the vulnerability of local communities in the coastal regions.

To implement EbA, and having the city of Cartagena as a pilot project, the necessity of designing a financial instrument arose in order to achieve sustainability and continuity in the measures to be developed. Terrasos is leading the design of such instrument with the support of Optim Consult. Through this work, Terrasos aims at guaranteeing that these measures count with enough resources for their application and that they can be sustained in the medium and long term. To design a financial instrument of these characteristics, the company has analyzed the context for its application, the goals that should be set, the actors involved, in addition to the referents and good practices that can be found on the subject, both in Colombia and internationally. We expect to have this financial instrument by the end of 2017.

 

Formulating the Action Plan for Biodiversity for the mining and energy sector

The Office of Environmental and Social Affairs of the Ministry of Mines and Energy, and the Environment and Energy Program of PNUD have been implementing the project “Support to the implementation of the Environmental Management Strategy of the Colombian mining sector”, in order to strengthen the institutional abilities to integrate the environmental perspective in the planning and decision making of the mining and energy sector in the context of green growth and the sectoral competitiveness. As part of this project, the formulation of an Action Plan (Pasbiome) was suggested, and it is now led by Terrasos. 

At present, the voids, weaknesses and needs of the mining and energy sector, with regards to the management of biodiversity and ecosystem services, and its performance in the territories, are evident. There are structural problems of institutional capacity, information management, intersectoral articulation and local performance that hinders an adequate environmental management, which could otherwise contribute to conflict prevention and the improvement of welfare conditions in the regions. Hence, the call to move towards a sustainable use of the recourses managed by this sector, taking into account their competences as productive sector and without neglecting the declarations by the Ministry of Environment, and other sectors involved, about the sustainable management of the territories. 

 

Structuring the first Habitat Bank in Latin America

Terrasos has structured the first Habitat Bank in Latin America in the Orinoquia region. The Habitat Banks are grounds where activities of ecosystem preservation, improvement and restoration are carried out to compensate for the inevitable loss of biodiversity in developing projects of great magnitude. The management of these fields is developed by experts in conservation, restoration and management, who facilitate the attainment of quantifiable gains in biodiversity, which can be used by companies to offset for the impacts caused. To ensure transparency and traceability of these schemes, an accounting system was set in place, in addition to a monitoring system, which covers environmental, socio-economic and financial aspects, and helps the process of measuring the impact inflicted by the projects, from a perspective of sustainable development.

For this task, Terrasos gathered important and strategic international allies to develop compensation projects. Among those allies, Advanced Ecology (AEL)  stands out, whose main activity is the development and generation of compensation solutions to inevitable impacts, by developing mitigation/conservation banks for wetlands or creating strategies for individual offsets.

Development of the 10-year strategic vision of the Colombian Environmental Information System (SIAC for its name in Spanish)

In 2014, Terrasos, together with the consulting firm Projecto Ítaca, took part in developing the strategic 10-year vision of the Colombian Environmental Information System (SIAC). A strategic model was developed on the basis of the current context, the trends and best practices related to information systems, both internationally and in Colombia. The result was the following: SIAC “must become an entity or concrete unity, with important influence in the decision making process, avant-garde with a forward-looking approach, with high credibility, with a true implementation capacity and, specially, with the desire to become the pivotal cornerstone of information in the environmental sector of Colombia”.

The suggested vision for SIAC, in the context of the project, proposes the following actions:

1. Turning SIAC into an entity or concrete unit

2. Comprised by a high-performance work team

3. Its main role should be the creation and custody of an environmental meta-model of information and knowledge

4. It must unfold by means of determining and applying concrete rules, standards and protocols 

5. It must interact adequately with the others entities in the sector, create interrelationships with other sectors and promote the interconnection with society

6. Its core endeavor, surrounding the meta-model custody, should be in the intelligent collection of data by and for the sector

7. Its great distinguishing feature should be the creation and maintenance of information products and services that are systemic, ample, exhaustive, easily used, innovative and replicable at different levels

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