companies are buying
With so many questions revolving around Biodiversity Credits, why would a company buy them?
In some places, including parts of Australia, the government forces companies to buy nature credits, money protection in one area to offset losses in another. EU-based firms may also choose to do the same as new rules mandate disclosure of their impacts on nature.
Researcher Alexandra Holmlund of the Swedish University of Agricultural Sciences, who attended the COP15 summit with the Biodiversity Credit Alliance industry group, criticized the idea of allowing companies to offset destruction elsewhere.
COP15 participants are mainly discussing “voluntary markets” run by the private sector, rather than “compliance markets” trading government-mandated investments. But some doubted that the voluntary loan would attract sufficient investment.
Martijn Wilder, chief executive of climate change-focused investment and consulting firm Pollination, said governments should require companies to invest in biodiversity.
“Unless you’re really forcing a company to do it, they’re not going to do it,” Wilder said.
The current draft of the COP15 deal also includes a reference to promoting financing schemes such as “biodiversity offsets”.
privatization nature
Outside the UN talks, the Biodiversity Credit Alliance and the World Economic Forum (WEF) are separately discussing how to implement the voluntary market.
Holmlund said the alliance, an informal grouping of about 10 market players, aims to officially launch next year. It will also develop a means of peer-review of credit issuance to ensure protection claims are met.
Analysts said the market needed stricter standards, noting the early free-for-all in carbon markets resulted in too many low-quality projects.
“When you can point to too many examples in the market of low quality or low standards, it breeds mistrust and it affects the integrity of the overall market,” said Lucy Hargreaves, head of policy for carbon credits platform Patch.
Vera, operator of the world’s largest registry of carbon credits, said it would release its own standard for biodiversity credits next year.
Last week a report co-authored by the United Nations Development Program supported well-structured “biocredit” plans and offered recommendations. But other experts warn that biodiversity credits are an attempt by companies to “greenwash” or make false claims of sustainability.
Frederic Hache, director of the Green Finance Observatory, said biodiversity credits are no replacement for nations implementing strict laws prohibiting the destruction of nature.
“These markets are restructuring and privatizing protection based on short-term profitability criteria,” he said.