The world is facing two major environmental threats – climate change and species loss. Governments and the private sector have started significant policy changes on addressing the climate change issue but there has not been the same progress on biodiversity. This is partly because identifying progress in climate change can be quantified in terms of carbon credits (1 carbon credit is 1 tonne of carbon dioxide not emitted or sequestered) whereas quantifying biodiversity progress is much more complicated – there is no single taxon that can act as an equivalent to carbon dioxide.
One solution to this problem would be to mimic the approach used by the Retail Price Index (RPI) which compares a basket of goods and services in current use in each country to determine inflation rates in the economy of those countries (an analagous challenge to comparing biodiversity performance between distinct ecosystems). The baskets of goods and services vary enormously between individual countries to reflect what is being purchased by their populations, but the resulting inflation figures can be compared. The biodiversity equivalent of the RPI is to identify the conservation targets for each ecoregion or habitat and then develop a basket of metrics that can be used to quantify progress towards those targets.
In 2021 Operation Wallacea, Biodiversity Credit Company and the Wallacea Trust formed a 50 strong Biodiversity Credit Working Group comprising corporates, financial institutions, biodiversity experts and biostatisticians. They developed an international biodiversity credit standard that could be traded in the same way as a carbon credit. These credits would be issued by a third-party independent certification body – our preference being Plan Vivo (one of the longest established carbon certification schemes) due to their requirement for >60% of a project’s funding going towards local stakeholder groups.
For biodiversity credits the certification standard would require a minimum of 5 measurable metrics that would reflect the national and local conservation objectives for that habitat. The proposers of schemes for production of credits would need to convince an independent panel of biodiversity experts contracted by Plan Vivo that the metrics being proposed would reflect the national and local biodiversity targets for those habitats. This approach would then allow metrics to be developed for any eco-region, habitat or location around the world and a biodiversity credit defined as a 1% uplift (or avoided loss) in the median of the basket of metrics per hectare.
See here for a full version of the latest biodiversity credit methodology.
A particularly exciting element of this approach is that biodiversity credits could be stacked with carbon credits within the same project, with the risk of double counting avoided using the principle of additionality. If, for example, the total budget for a biodiversity-focused restoration project is more than the potential income from selling the carbon credits, the remaining budget can be funded through biodiversity credits safe in the knowledge that these credits are generating additional benefits to the overall project (i.e. achieving additionality). In this way, a financial incentive is provided for carbon-focused projects to go the extra mile and maximise biodiversity benefits, and a new avenue of funding created for the conservation of high value biodiversity sites with low carbon storage. Projects can also apply for avoided loss credits, allowing existing sites high in biodiversity but under severe threat of destruction to be protected; this means the approach can both be proactive in avoiding future loss of biodiversity and reactive in restoring natural communites to impacted sites.
This approach is already being applied as avoided loss projects to biodiversity-rich grasslands in Transylvania and an endemic-rich cloud forest site in Honduras, as well as an uplift project to a Honduran mangrove restoration initiative. Many more projects are in various stages of development, including rewilding in the UK, lowland forests in Mexico and Costa Rica, coral reefs in Maldives and Honduras, forest corridors in Sri Lanka, coastal marine habitats in Turkey and many more.
