At the United Nations biodiversity conference currently underway in Colombia, an international panel has published a framework with guidelines to scale up \u201cbiodiversity credits,\u201d an emerging financial mechanism to tackle the global loss of nature.<\/p>\n
Biodiversity credits are meant to be a way for companies to invest in projects that protect or restore nature, earning a credit for each \u201cunit\u201d 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<\/p>\n
However, various scientists, activists and Indigenous peoples\u2019 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).<\/p>\n
The new framework, launched by the International Advisory Panel on Biodiversity Credits (IAPB) at this year\u2019s biodiversity conference, COP16, aims to avoid these issues. It lays down principles and guidelines to develop and scale up \u201chigh integrity\u201d biodiversity credit markets.<\/p>\n
\u201cHigh integrity\u201d 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.<\/p>\n
The framework also includes examples of 31 pilot projects across 21 countries in various stages of development. \u201cThe pilots are quite important because \u2026 we did not want just to produce one more report with good ideas,\u201d panel co-chair Sylvie Goulard said at a press conference.<\/p>\n
Previously, biodiversity credits were described as purely voluntary \u201cpositive investments\u201d 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.<\/p>\n
The new framework opens up the possibility of using biodiversity credits to offset nature loss locally, under \u201cstrict criteria,\u201d but not internationally, the IAPB says. \u201cCredits should not be used as offsets to justify impacts that should have been avoided or minimized,\u201d it adds. Some governments have announced their own biodiversity credit schemes, where credits can be used as offsets.<\/p>\n
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.<\/p>\n
However, offering offsetting, whether local or global, would \u201cstop real transformation,\u201d 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.<\/p>\n