Nature Credits
Nature credits and certificates are, in the most simple terms, ways to compensate site managers, owners, and stewards for great conservation. In some ways this is a global pay-for-performance approach and as a pay-for-performance system, the biggest challenge is to determine which metrics are used for assessing performance – some proposals are included below and others are in progress. As such, the links and information below are meant to be basic orientation for a work in progress.
See the below links and background to get a better understanding of the scope of efforts.
RePlanet: What are Biodiversity Credits
Biodiversity credits are a new type of financial instrument that can be used to incentivize businesses to invest in nature conservation and restoration. They are created by projects that improve or protect natural ecosystems and can be traded on a market. Biodiversity credits offer a number of advantages over traditional conservation methods. First, they provide a financial incentive for businesses to invest in nature. Second, they can help to scale up conservation efforts by creating a global market for biodiversity. Third, they can help ensure that conservation efforts are effective and sustainable by requiring projects to meet rigorous measurement, reporting, and verification standards. The potential of biodiversity credits is significant. By incentivizing businesses to invest in nature, they can help to reverse the decline of biodiversity and create a more sustainable future for our planet.
Operation Wallacea
Operation Wallacea has been another pioneer in the biodiversity credit field. Initially, they formed a Biodiversity Credit Working Group to develop such a standard and they are one of the leaders of the Biodiversity Credit Alliance. This initial work has led to the Plan Vivo Biodiversity Standard.
Biodiversity Credit Alliance
The Mission of the BCA is to bring clarity and guidance for the formulation of a credible and scalable biodiversity credit market under global biodiversity credit principles. Under these principles, the BCA seeks to mobilize financial flows toward biodiversity custodians while recognizing local knowledge and contexts.
Verra’s Nature Crediting Framework
Verra is at the forefront of addressing the biodiversity crisis with its innovative nature credit framework, developed under its Sustainable Development Verified Impact Standard (SD VISta) Program. This framework allows projects to issue standalone, standardized, and tradable nature credits by certifying their high-quality conservation and restoration outcomes. The Nature Framework Development Group, of which the Conservation Finance Alliance is a part, recognizes the need for an estimated annual investment of $700 billion to meet the goals and targets of the Global Biodiversity Framework. Nature credits are a financial tool that can increase private-sector funding for biodiversity initiatives and protect nature for future generations. By providing a verified means for companies to invest in high-quality biodiversity projects, Verra's nature credit framework aims to help to meet the GBF's objectives and support the conservation of the natural world.
World Economic Forum note on Biodiversity Credits and link to Principles document
One mechanism to help businesses deliver nature-positive outcomes is biodiversity credit. A 'biodiversity credit' is an economic instrument used to finance activities that deliver net positive biodiversity gains. Unlike carbon or biodiversity offsets, which are payments made by a business to compensate for its damaging impacts on location-specific ecosystems, biodiversity credits allow companies to support nature-positive action, funding long-term conservation and restoration of nature, a higher order contribution than simply offsetting negative impact.
Voluntary biodiversity credits can help the private and public sectors achieve a nature-positive economic system, but only if there is transparent governance. For example, the indigenous people and local communities who safeguard natural ecosystems must be included in respectful and active engagement. Clarity of additionality, robust measuring, reporting and verification (MRV) and solutions to address double counting, permanence and unintended outcomes leaked to nearby geographies must all be considered to ensure success.
Governance principles can be drawn from best-in-class efforts from the carbon market and from conservation and restoration initiatives already happening on the ground. Furthermore, in a market with high reputational risk, establishing broadly accepted baseline voluntary principles now will help build further legitimacy in the project methodologies that will be developed in the years to come.
The Biodiversity Consultancy : Biodiversity Credits: Design Principles for High Integrity Outcomes
In this technical working paper, design principles are explored for the development of scalable voluntary biodiversity credits and discuss the challenges in delivering high integrity positive outcomes. Drawing on lessons learned from the evolution of the carbon credit market, as well as experience from biodiversity offsets and payment for ecosystem services (PES) schemes, the paper provides an initial outline of how robust design and a flexible framework could deliver both local-scale integrity (achieving tangible gains on the ground) and global-scale integrity (ensuring credits can support societal goals for biodiversity). The paper explores:
What are biodiversity credits and how can they support a nature-positive future?
Understanding integrity at local and global scales
Risks and lessons learned from other market-based approaches
Principles for high integrity biodiversity credits
The building blocks of a scalable, global measurement framework
High-level integrity principles developed to steer emerging biodiversity credits market
International wildlife conservation charity, Fauna & Flora International (FFI), and the Plan Vivo Foundation (PVF) have collaborated to develop high-level principles for integrity in the emerging biodiversity credits market. The market represents an opportunity for increased finance for biodiversity conservation while reducing risks and ensuring measured biodiversity outcomes. FFI and PVF acknowledge the various risks associated with the market, including greenwashing, lack of transparency, oversimplification of nature's complexities, poorly defined pricing, and inequitable benefit sharing. The principles aim to promote transparency, draw from lessons learned in the voluntary carbon market, and utilize purpose-built registries to prevent double claiming. By emphasizing the value of high-integrity biodiversity credits that deliver real, additional, and verifiable benefits for biodiversity, people, and the climate, FFI and PVF seek to channel responsible finance to Indigenous Peoples and Local Communities (IPLCs) through transparent and equitable benefit-sharing mechanisms. They emphasize that biodiversity credits should not be used as offsets but rather as positive incentives for landowners and communities to conserve and restore habitats worldwide, contributing to the goal of Nature Positive by 2030 – restoring and regenerating species and ecosystems globally.
The principles have been developed through FFI’s and PVF’s collective expertise and resources, and are based on lessons from what has and hasn’t worked in the voluntary carbon market. They span the three key areas of climate, nature and people and include parameters such as:
Real, robust and verifiable biodiversity benefits that accelerate progress towards achieving jurisdictional and global goals for the recovery of nature
Rights of IPLCS are respected, protected and result in locally appropriate, equitably distributed and positive social impact
Mitigation and adaptation activities to deliver climate benefits in line with international agreements and national strategies enhancing or maintaining carbon pools
Global Environment Facility (GEF) – Innovative Finance for Nature and People: Opportunities and Challenges for Biodiversity-Positive Carbon Credits and Nature Certificates
This GEF report provides an overview of unlocking financial resources for biodiversity conservation and restoration, focusing on biodiversity-positive carbon credits and nature certificates. It emphasizes the importance of forests, particularly tropical forests, in achieving sustainable development goals and addressing climate change. The report highlights the need for increased global biodiversity financing and explores innovative financing instruments. It suggests that biodiversity-positive carbon credits and nature certificates can complement existing mechanisms and calls for clear policy frameworks, good governance, and the participation of Indigenous Peoples and Local Communities. The report also draws lessons from carbon markets and emphasizes the importance of integrity, pricing, and the enabling environment. Overall, it underscores the potential of these instruments to deliver nature-positive outcomes and scale up demand through consensus and policy support.
Nature Finance: Harnessing Biodiversity Credits for People and Planet
The paper identifies 5 key design challenges in the development of high-integrity biodiversity markets and outlines a clear, sovereign-driven Global Roadmap towards overcoming these challenges.
The 5 design challenges are:
Providing credible, timely, and affordable measurement and monitoring of the state, improvement and/or maintenance of biodiversity
Scaling, sustained, and high-integrity demand for biodiversity credits and associated financing
Ensuring sufficient, high-integrity supply of credits offering nature positive outcomes
Securing adequate price and equitable distribution of rewards to project developers, sovereigns, and Indigenous Peoples and local communities
Establishing robust governance and broader, transparent institutional arrangements
Nature Finance: The Future of Biodiversity Credit Market
For biodiversity credit markets to make a meaningful contribution to advancing equity, nature and climate goals, they must deliver in terms of price, scale and impact. This NatureFinance and Taskforce on Nature Market’s consultation paper provides both framing and practical proposals for these markets to produce the scaled financing and incentives needed for businesses and economies to better align with the Global Biodiversity Framework and the Paris Agreement. The paper draws on NatureFinance’s roles in the GEF’s Working Group on Innovative Mechanisms to Address the Biodiversity Financing Needs, the collective commentary that NatureFinance has assembled on the Australian Government’s Nature Repair Market Bill – draft legislation (February 2023), as well as the broader work of NatureFinance and of the Taskforce on Nature Markets.
The paper covers 5 key areas:
Historic Pivot to Nature Markets
The Rise of Nature Credit Markets
Governing Biodiversity Credit Markets
Building High-Performance Biodiversity Credit Markets
Plan Vivo – Public Consultation Biodiversity Credits
Plan Vivo is currently conducting a public consultation on biodiversity credits to develop an international standard for measuring and trading biodiversity improvements similar to carbon credits. The proposed standard would involve a basket of measurable metrics reflecting national and local conservation objectives for specific habitats. The consultation seeks input from various stakeholders, including experts, corporates, financial institutions, and biostatisticians, to refine the proposed approach and ensure its effective implementation. This initiative will help facilitate global efforts to address biodiversity loss by providing a quantifiable and tradable mechanism for valuing biodiversity improvements.
Terrasos – a Pioneering Actor in Biodiversity Credits
In Terrasos' briefing paper, Biodiversity Credits emerge as a game-changing solution for nature conservation and sustainable investment. By establishing a market-based approach, the paper highlights how these credits can incentivize businesses to support biodiversity restoration and protection. The innovative financial instrument facilitates collaboration between public and private sectors, promoting responsible investments in natural capital and driving a greener, more prosperous future for all stakeholders.