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Originally Posted On: https://www.embassyrowproject.org/post/what-you-need-to-know-about-voluntary-biodiversity-credits
The world’s ecological foundation has continuously been eroded by human activity: coral reefs are at risk of complete destruction, over one million plant and animal species face different levels of risk of extinction, and the planet’s topsoil has been degraded by intensive agriculture, development, and environmental mismanagement. While the world faces great challenges in the fight against climate change, it is worth remembering that this is not the only danger that faces the natural world. “CO2 matters, but it is not the only thing that matters. Protecting the diversity of species, both plants and animals are important.”, explains Kat O’Brien, Chief Partnerships Officer of ClimateTrade, as she addressed a packed audience at the Embassy Row Project’s “Democratizing Decarbonization Summit” at the National Press Club in Washington, D.C. on Nov. 22nd, 2022.
In order to address the loss of biodiversity and preserve the environment, it is estimated that up to $1 trillion is needed in annual funding (World Economic Forum). The current global outlay for biodiversity protection is in the $100-150 billion range, around 7 times less than needed. To address this, additional instruments are needed, especially market instruments. Biodiversity credits represent one such instrument, that has the potential to provide financing for nature-positive outcomes. These can allow environmentally conscious companies to offset the negative environmental impact of their own business or simply invest in preventing or reversing the negative biodiversity effects of human activity around the world.
The first voluntary biodiversity credit project was initiated in Columbia, to protect the Bosque de Niebla (The Foggy Forest) cloud forest using the methodology developed by ClimateTrade in collaboration with Terrasos: “Earlier this year, ClimateTrade piloted the first methodology ever around biodiversity credits… Every ten square meters that are protected is equivalent to one biodiversity credit,” explains O’Brien. This forest is home to 248 different bird species, as well as deer, puma, and spectacled bear, an endangered species of bear native to the Andes. Each biodiversity credit corresponds to the conservation and protection of ten square meters of the forest for 30 years. The sale of biodiversity credits can be an effective way to provide much-needed funding from individuals, and small and medium businesses at a massive scale that is needed to protect biodiversity in different regions across the world.
“Biodiversity credits are a novel environmental commodity that goes beyond mitigating the worst excesses of human activity and provides a mechanism to directly contribute to the preservation of the habitat for hundreds of thousands of plant and animal species that are facing the prospect of extinction.” explains James Scott, Founder of the NETZERO Incubator & Accelerator and ENVIROTECH Pre-Accelerator. Scott continues, “This allows environmentally conscious businesses to set themselves apart and contribute in a direct and effective manner to where their help is needed the most.” The preservation of habitats globally means not just preserving these areas for the plants and animals that live there, but also for the future generations of humans who will, hopefully, have a chance to experience the rich and diverse natural world we have been fortunate enough to enjoy.
Reference:
World Economic Forum, Biodiversity Credits: Unlocking Financial Markets for Nature-Positive Outcomes, Available at: https://www3.weforum.org/docs/WEF_Biodiversity_Credit_Market_2022.pdf
