At the United Nations biodiversity conference currently underway in Colombia, an international panel has published a framework with guidelines to scale up “biodiversity credits,” an emerging financial mechanism to tackle the global loss of nature.
Biodiversity credits are meant to be a way for companies to invest in projects that protect or restore nature, earning a credit for each “unit” of habitat preserved. This concept gained traction following the last U.N. biodiversity conference, or COP15, in 2022, which identified a $700 billion annual funding shortfall for conservation and aimed to mobilize at least $200 billion per year by 2030. Biodiversity credits are seen as a way to involve the private sector in closing this finance gap
However, various scientists, activists and Indigenous peoples’ organizations have raised concerns that biodiversity credits could suffer from the same issues as the carbon credit market, including inadequate monitoring, limited transparency, land grabbing, unjust negotiations, and violations of the rights of Indigenous peoples and local communities (IPLCs).
The new framework, launched by the International Advisory Panel on Biodiversity Credits (IAPB) at this year’s biodiversity conference, COP16, aims to avoid these issues. It lays down principles and guidelines to develop and scale up “high integrity” biodiversity credit markets.
“High integrity” biodiversity credits, the framework notes, should be verified certificates that represent positive biodiversity outcomes that are rigorously measured and validated. These credits must also prioritize good governance, as well as fairness and inclusivity, ensuring that IPLCs actively participate in and benefit from biodiversity credit projects.
The framework also includes examples of 31 pilot projects across 21 countries in various stages of development. “The pilots are quite important because … we did not want just to produce one more report with good ideas,” panel co-chair Sylvie Goulard said at a press conference.
Previously, biodiversity credits were described as purely voluntary “positive investments” in nature that, unlike carbon credits, could not be used by companies to offset environmental damage elsewhere. This raised questions about why companies would invest in credits, and whether there would be sufficient demand to address the finance gap, Mongabay previously reported.
The new framework opens up the possibility of using biodiversity credits to offset nature loss locally, under “strict criteria,” but not internationally, the IAPB says. “Credits should not be used as offsets to justify impacts that should have been avoided or minimized,” it adds. Some governments have announced their own biodiversity credit schemes, where credits can be used as offsets.
The framework also notes that biodiversity credits can be used for insetting, in which companies buy biodiversity credits as a way to fund projects that protect or restore nature within their supply chains.
However, offering offsetting, whether local or global, would “stop real transformation,” Nele Marien from Friends of the Earth International said at a press conference at COP16. Policy changes that stop destruction by big corporations are needed, she said, rather than opportunities that allow them to destroy and make up for it elsewhere.
This article by Shreya Dasgupta was first published by Mongabay.com on 30 October 2024. Lead Image: Udayan Dasgupta.
What you can do
Help to save wildlife by donating as little as $1 – It only takes a minute.
Leave a Reply