Paper calls for urgent guidelines for biodiversity credit schemes
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The emerging market in biodiversity credits risks becoming a wild west unless guidelines based on the learnings from the carbon credits market are applied, according to a new paper by the Circular Bioeconomy Alliance.
This emerging ‘nature market’ promises to mobilise funding to help address the global biodiversity crisis, offering private companies the opportunity to invest in biodiversity conservation, restoration, and development to deliver net positive biodiversity gains, such as habitat protection or pest reduction. According to the Circular Bioeconomy Alliance’s new paper – Biodiversity Credits Under the Microscope, by Sven Wunder – as of a year ago, 34 such schemes have been identified globally as in development, being piloted or already fully operational.
However, many of the new biodiversity credit schemes, still in their infancy, lack independent verification and any external oversight, as well as transparency in how baselines are set and any form of impact evaluation.
This comes in the wake of an explosion in carbon credits over the last ten years as an economic tool, offering companies an appealing, convenient answer to offset their carbon emissions, In reality, the mechanism has systemic flaws and in the worst cases facilitate greenwashing. Poor transparency, double counting and lack of quality control (including misleading claims from the companies running these schemes), has meant that carbon credit schemes can significantly overestimate their impact, on reversing deforestation and other claims. Notably, of a potential 89 million credits – only 6% were linked to additional cuts in carbon emissions created by preserved trees – the entire basis on which credits are sold.
“There is a real risk of a new wild west, where biodiversity credits are abused as compliance ‘offsets on the cheap’” said Marc Palahi, CEO of the CBA.
“Ultimately we must address the systemic, root causes of the problem if we are to prevent irreversible biodiversity loss. That means industries investing in and working in symbiosis with nature to transform and rethink their value chains rather than simply offsetting for its failures.”
“Whilst this transformation should be the central focus, high-integrity nature markets that enable private investment in nature conservation and restoration can be an important complement.”
“Only by learning the lessons of carbon credits, can we ensure biodiversity credits’ wings are not clipped before they’ve had a chance to fly.”
The CBA paper sets out ten important principles to ensure the integrity and successful implementation of a biodiversity credits market, ahead of COP16 in Colombia which will reconvene parties to review progress made towards halting and reversing biodiversity loss.
More information
Wunder, S. 2024. Biodiversity credits under the microscope. Circular Bioeconomy Alliance, London. https://doi.org/10.62164/20243
