At point A, the firm’s production level causes a net cost, or welfare loss, to society equal to the area ABC as the marginal social costs of production are greater than the marginal social benefits. Biodiversity offset programmes allow developers to meet the quantity-based restriction by avoiding and minimising biodiversity loss at a development site, restoring biodiversity at the conclusion of a project or, where permissible, by securing biodiversity offsets to compensate for any residual biodiversity loss. Within the constraints of the mitigation hierarchy, developers are therefore able to minimise the costs of meeting the quantity-based restriction by selecting the most cost-effective mix of conservation actions.