Is Brazil’s biodiversity offset policy effective in conserving the Cerrado?

Summary Brazilian landowners are obligated to conserve a minimum percentage of native vegetation within their properties (termed a ‘legal reserve’), but non-compliance can be compensated elsewhere through a biodiversity offset. Recent changes in rules for legal reserve compensation (LRC) have increased the allowed spatial scale and softened the ecological criteria required to select properties for compensation, potentially leading to considerable biodiversity losses. In this paper, we analyse whether these rules promote the conservation of tree species on private lands through LRC in the Cerrado biome, the most biodiverse savannah in the world. We modelled the potential distribution of 126 Cerrado tree species and simulated several potential biodiversity offsets to calculate expected species losses under former and current LRC rules. Our results show that biodiversity offsets established under current and former LRC rules can lead to up to 100% tree species losses. In contrast, setting a minimum similarity threshold between watersheds can reduce median tree species loss in biodiversity offsets to as low as 3% and prevents LRC with no common species between sites. Therefore, the current rule is expected to strongly impact biodiversity in the Cerrado. Similarity in species composition between watersheds must be considered in order to implement LRC offsets that effectively conserve Cerrado biodiversity on private lands.