The International Advisory Panel on Biodiversity Credits (IAPB) presented, on Monday 28 October, a roadmap at the COP16 biodiversity conference in Cali (Colombia).
Modelled on carbon credits, but avoiding their pitfalls, biodiversity credits are intended to encourage investment in biodiversity. Positive action on nature would earn credit.
Established in June 2023 by the United Kingdom and France and led by former MEP Sylvie Goulard (ALDE/Renew Europe, French), the IAPB states that “beyond just mobilising capital, uptake of biodiversity credits could help to change the relationship of corporates and financial markets with Nature and better support Nature’s stewards".
The idea of biodiversity or nature credits was raised at COP15 in Montreal. They could meet the need to mobilise financial resources, which is the focus of COP16 in Cali and which, set at $200 billion per year by 2030, corresponds to target 19 of the Kunming-Montreal global framework. Defending the introduction of nature credits in September, the President of the European Commission, Ursula von der Leyen, herself explained that “carbon pricing has raised €180 billion, which has been reinvested in climate and innovation projects” (see EUROPE 13482/14).
A framework to avoid repeating the mistakes of carbon credits. The ‘Framework for High Integrity Biodiversity Credit Markets’, unveiled by the IAPB on Monday 28 October, should prevent the abuses seen with carbon credits.
Biodiversity credits “are not a substitute for public and multilateral finance, nor are they an exclusive tool for channelling private money to biodiversity”, warn the two presidents of the IAPB, Sylvie Goulard and Amelia Fawcett, in the foreword of the report.
If these credits are used for “compensation”, it will be “strictly controlled” and only at local level. “The IAPB does not support approaches that advocate international biodiversity offsetting: it is imperative that action remains local and focuses on ecosystems similar to those it has just offset”, the report states.
The IAPB has launched around thirty pilot projects to show that the biodiversity credit mechanism can be translated into concrete action. Three of them, at European level, are located in France. The La Belle Forêt conservation project on the Chambord national estate, for example, is financed by the purchase of credits by French energy supplier EDF. The IAPB specifies that the sale price of the credits will vary, after a reassessment every five years, according to the project’s biodiversity score.
The idea did not meet with unanimous approval. From Colombia, where she is part of a European Parliament delegation, MEP Carola Rackete (The Left, German) said on the social network X that such a framework would exacerbate “the financialisation of nature after the colossal failure (and high profitability) of carbon offsets”.
Ms Rackete then echoed the words of the think tank, ‘Green Finance Observatory’ (GFO), which states that the sole purpose of this framework is to “protect the status quo and the profits of companies in Northern countries for a few more years”. Even local compensation will allow “multinational companies to claim that they are compensating for their local destruction”, according to the GFO. Especially if, as the think tank points out, the ex ante sale of credit, i.e. before the assurance of results obtained, is authorised.
A biodiversity credit market is “not necessary to finance the protection of nature, as the redirection of a fraction of the subsidies that are harmful [to the environment] would be sufficient to make up the annual financing deficit of 200 billion dollars”, according to the Green Finance Observatory.
For its part, the French committee of the International Union for Conservation of Nature (IUCN) estimated that “even at their maximum potential”, biodiversity credit mechanisms “could only provide a small part of the necessary funding”.
There is some debate as to what name should be given to this mechanism: ‘biodiversity credit’ or ‘biodiversity certificate’? “These are one and the same thing”, said the GFO, while others, such as the IUCN, maintain that the term certificate has the merit of “conveying the idea of a positive contribution to biodiversity rather than a cancellation between biodiversity losses and gains”. All the more so since, as the IAPB assures, this mechanism will have to measure biodiversity gains rather than limit itself to an undesirable form of compensation.
To see the IAPB roadmap: https://aeur.eu/f/e3l (Original version in French by Florent Servia)