Environmental compensation as a policy instrument – a municipal perspective

MuniComp är ett inter- och transdisciplinärt forskningsprojekt med syfte att undersöka kommunernas förutsättningar att tillämpa ekologisk kompensation i planering och beslut om användning av mark och vatten.

Projektet finansieras av Naturvårdsverket, inom ramen för en större satsning på forskning som ska ge mer kunskap om hur ekologisk kompensation kan användas som styrmedel.

In the fall of 2017, The Swedish EPA provided 2,6 mil EURO across 7 research projects to study improved implementation of environmental compensation in the country. The funding has come after many years of discussion about whether or not the country’s existing planning or environmental regulations allow for compensation measures. Increasingly, regulators, planning authorities and even businesses themselves have suggested compensation as a means to reduce the decline in biodiversity and ecosystem services. These initiatives are motivated by the Polluter Pays Principle and an increased awareness of ecosystem services, but explicit guidance and best practices for implementing compensation in the country are limited, especially regarding planning processes.

Approx. 500,000 EURO of this financing was provided to the MuniComp project, a three-year project which focuses on improving the understanding and use of compensation as a policy instrument on the municipal level.

Although national and regional policies can influence local urban development, municipalities in Sweden are by far the most important actors. Their monopoly over the planning process is a key starting point for the MuniComp research project, which will focus on how to integrate compensation as a policy intervention to address ecological injuries to both land and water, including loss of ecosystem services such as recreation. The project focuses on compensation for exploitation or development activities permitted by municipalities, according to the Swedish planning regulations. These activities, which may occur on private or public land, may include construction of housing, schools, hospitals or other public infrastructure such as local roads.

The key research questions are focused around four areas:

Policy design. How to design a compensation system that takes into account trade-offs between evaluation criteria such as biodiversity protection, impact on ecosystem services, cost-effectiveness, political acceptance, flexibility, and equity.
Flexibility. How can compensation become a more accepted policy tool for land use planning generally, but also with respect to specific compensation proposals? How can we assess actors’ preferences in order to build support for compensation in the coming years, especially “like for unlike” trade-offs?
Mitigation hierarchy. How can a functional framework for environmental compensation on the municipal level be developed within the mitigation hierarchy?
Lessons from current municipal applications. What can we learn from the experiences and challenges faced by the Helsingborg and Lomma municipalities so far? Both municipalities have been on the forefront of testing compensation approaches in Sweden.
The project will rely on several case studies to illustrate alternative approaches and develop a final synthesis with policy recommendations. The Swedish EPA will fund a final conference (2021) involving all 7 of the funded research projects to discuss the results and ways forward for environmental compensation in Sweden.

MuniComp Project Partners:
Kristianstad University (project host)
Anthesis Enveco (environmental consultancy)
EnviroEconomics Sweden (environmental consultancy)
IVL Swedish Environmental Research Institute (environmental consultancy)
Ecogain (environmental consultancy)
Skåne Association of Local Authorities
Lomma municipality
Helsingborg municipality