Biodiversity credits could help finance conservation and restoration of the world's biodiversity, according to research released by two international groups Monday in advance of the U.N. biodiversity conference in Montreal.
Biocredits are an economic instrument that allows for the creation and trade of "biodiversity units." They could complement carbon credits but are more effective as their own new asset class and are better than offsets, according to the research from the United Nations Development Programme and U.K. think tank International Institute for Environment and Development.
"As a purely positive investment in nature, biocredits are distinct and are preferred to biodiversity offsets, which can cause net damage to biodiversity. Demand for biocredits is growing among private investors, individuals and governments who want to invest in the conservation and restoration of biodiversity," according to the research paper, "Biocredits to finance nature and people: emerging lessons," said.
The research looks at three existing biocredit methodologies to explore the potential for tradable units of biodiversity. Measurable and traceable biocredits could be traded and sold to individuals, companies and government, with most of the revenues going to communities often on the front lines of biodiversity loss, the research report said.
The research includes lessons learned from "the pitfalls of the carbon market," such as the use of carbon credits to greenwash instead of decarbonize, and insufficient safeguards for protecting local communities.
World leaders are gathering in Montreal this week at COP15 to agree on a global biodiversity framework that protects 30% of the world's natural resources by the 2030. According to the research, "biocredits can generate the private and public finance needed to close the financing gap for inclusive nature outcomes to protect 30% of the world's terrestrial and marine habitats by 2030."
Biocredits will be discussed at a COP15 side event on Dec. 16.
