What is a unit of nature? New framework highlights challenges for biodiversity credit market

Ecologists have devised a new framework for classifying how biodiversity credit operators define units of nature. New analysis shows the challenges involved in devising a biodiversity credit market to finance nature restoration, and the risks of over-reliance on ‘offsets’.

Nature conservation faces an estimated $700 billion annual funding gap to halt and begin reversing global biodiversity loss. This means there is an urgent need to engage business and the financial sector to fund nature recovery.

This has led to increased interest in developing a “biodiversity credit market” where companies can purchase nature credits to offset their impacts on biodiversity. There has been an explosion in the number of actors starting to develop and sell biodiversity credits. However, so far it is unclear how they define the meaning of “a unit of nature” and how they produce standardized and generalizable measurements of biodiversity. did.

In a review published in Proceedings of the Royal Society B, a group of researchers has developed a framework that defines how companies can quantify biodiversity, detect positive outcomes, and link actions to investment. Introducing.

They use this framework to explore the various challenges associated with abstracting nature in all its complexity into a single unit, and how the units of nature can be misleading, or how true living things are. We discuss ways in which the benefits of diversity may not be represented.

This review is particularly special as it is the first in a new series commemorating the work of Professor Dame Georgina Mace, who made fundamental contributions to the field of biodiversity measurement in support of international conservation policy.

“Governments around the world have agreed to halt and reverse biodiversity loss by 2030. “Broader society, and businesses in particular, need to make similar efforts.”

“Since we cannot avoid all the impacts of human activities on nature, we need to be able to compensate for the damage humans do to nature. Our review suggests that doing this through tradable ‘units of nature’ It shows how difficult it is. Provides guidance on how to ensure biodiversity credits are designed and used appropriately so they can support true biodiversity recovery. ”

Dr Hannah Wauchope (University of Edinburgh), lead author of the study, said: ‘Measuring biodiversity outcomes is of increasing interest in policy and finance sectors, but it is important to understand that measuring something as complex as biodiversity cannot be done in a single way. “It’s very difficult to reduce it to numbers, which means there’s a lot of risk.” We wanted to investigate how companies are tackling this difficult challenge. ”

This framework shows how two broad approaches are used to reduce the complexity of a site’s biodiversity to a single value.

The first method assigns numerical values ​​to regions. The higher the number, the higher the biodiversity value. For example, a site may be measured by a variety of indicators, such as species richness, canopy cover, and target species richness. These numbers are aggregated into a single value that represents the health of the ecosystem.

The second approach classifies sites according to two criteria: whether the ecosystem is healthy or not. For example, forest health can be measured by the presence or absence of indicator species such as jaguars.

The credits then measure whether the site has been preserved or restored. For example, by showing that an indicator species is still present, it proves that the site has not changed (in the case of conservation) or that it has been improved (in the case of conservation). in the case of repair), e.g. by measuring numerical changes.

Finally, the credit operator adjusts the number of credits it issues based on the uncertainty (for example, not selling 20% ​​of the measured credits) to act as a buffer.

Researchers have used this framework to highlight the various challenges faced when trying to represent biodiversity in a single unit. For example, biodiversity has different values, many of which are unmeasurable and some of which are mutually exclusive (for example, the cultural value of tree species to local people and their economic value as wood products). ).

Even for measurable aspects, it is difficult to measure accurately and aggregate indicators in a sensible way, leaving a lot of room for uncertainty and games to produce misleading results.

Perhaps the biggest challenge, the researchers say, is proving that conservation and restoration gains occur as a direct result of investment rather than for other reasons, and that threats to biodiversity are simply transferred elsewhere. That’s to make sure it’s not.

These challenges have led researchers to warn against companies using biodiversity credits to offset their environmental impacts, particularly to support “nature positive” claims. There is.

Instead, companies should prioritize avoiding and mitigating impacts on nature wherever possible. Credits can be used as a way for businesses to demonstrate that they are making a measurable positive contribution to nature recovery when they cannot directly contribute to it (for example by restoring biodiversity on land they own). Most commonly used.

Dr Wauchope added: ‘Biodiversity credit markets are only good for biodiversity if they are used under unprecedentedly stringent regulations that ensure that companies prioritize avoiding negative impacts in the first place. “When purchasing biodiversity credits, it should not be quantified, but should quantify the positive contribution.” as a direct offset. ”

Professor Milner-Gulland said: “While there may be a role for biodiversity markets to leverage funding for nature, they can only be part of the solution to achieving effective and equitable conservation.” “No. It will continue to play an important role.” We call for direct investment in nature by the public and private sectors and regulation to reduce impacts on nature. ”