The fifteenth meeting of the United Nations Convention on Biological Diversity conference in Montreal, Canada convened governments from around the world with the goal of developing the post-2020 global biodiversity framework . Building off the Strategic Plan for Biodiversity 2011-2020, the new framework intends to lay the foundation for financial commitments and policy reforms needed to secure adequate funding for global biodiversity protection. Major goals include a planetary net gain in natural areas, reducing species extinction, and safeguarding genetic diversity . With the alarming decline of Earth’s biodiversity, wealthy countries and the private sector are being called to deliver on meaningful action to halt the loss of species and critical ecosystems worldwide. Click here for a series of photos showing some of the world’s most threatened populations.
To reverse our current trajectory, it’s estimated that an additional $700 billion annually will be needed for biodiversity protection , an amount unlikely to come from government intervention alone. Put differently, a report by the UN Environment Program found that “nature-negative” expenditures still far outweigh investments into nature based solutions, a trend exacerbating the biodiversity and climate crisis . As negotiations for global-scale conservation carry on, growing interest has emerged for voluntary biodiversity credits to facilitate the investment necessary to restore, protect, and sustain nature.
With a nod to the expansion of voluntary carbon markets, advocates for biodiversity credits feel that lessons learned from the carbon sector could help expedite the deployment of capital for nature positive projects. Recent discussions around the structure of biodiversity credit mechanisms agree on the need to deliver measurable, verified, and permanent results . Perhaps the most challenging aspect will be determining what metrics are appropriate to quantify the impacts of a specific project, considering that one ton of CO2e is not a useful benchmark for evaluating ecosystem vitality. So far, pilot projects have implemented area-based approaches, although a variety of stakeholders are working to establish other standardized metrics and new methodologies to evaluate biodiversity impacts .
As the market develops, distinctions will be made between carbon offsets, biodiversity offsets, and even biodiversity credits, referred to as “biocredits” by the International Institute for Environment and Development. In this sense, biocredits are distinguished from offsets since they are not based on the principle of equivalence required to compensate for emissions or environmental degradation elsewhere . Although a purely positive investment in nature may seem like a tough sell without the business accounting benefits of offsets, several hundred representatives from large financial institutions made an unprecedented appearance at this year’s Montreal conference .
The interconnectedness of climate change and biodiversity loss presents a compounding problem. While the primary sources of greenhouse gas emissions are widely recognized, the facets of biodiversity loss are more nuanced. For many reasons, addressing biodiversity issues will be challenging, especially considering the complexities of native species decline and invasive species expansion that reshape Earth’s ecological landscape. As the Montreal biodiversity talks concluded this week, exciting progress was made with the adoption of the Kunming-Montreal Global Biodiversity Framework. The landmark agreement involves commitments from nearly 200 countries to protect nature and direct hundreds of billions of dollars towards conservation by the end of this decade. To make actionable progress on its array of conservation goals, the new framework includes specific provisions for the financing and monitoring needed to achieve important milestones . Throughout the development of the biodiversity framework, one thing remained clear; more conservation finance will be needed than is currently allocated. Will an emerging market for biodiversity credits help to close the funding gap?
1. UN Biodiversity Conference (COP 15)
2. Preparations for the Post-2020 Biodiversity Framework
3. Troubled biodiversity plan gets billion-dollar funding boost
4. State of Finance for Nature 2022
5. How biodiversity credits can deliver benefits for business, nature and local communities
6. Biodiversity Credit Alliance
7. Biocredits to finance nature and people: emerging lessons
8. Why is Wall Street So Hot for Biodiversity Right Now?
9. Nearly Every Country Signs On to a Sweeping Deal to Protect Nature