{"id":20206,"date":"2024-11-11T06:02:51","date_gmt":"2024-11-11T06:02:51","guid":{"rendered":"https:\/\/esa.org\/esablog\/?p=20206"},"modified":"2024-11-11T19:33:51","modified_gmt":"2024-11-11T19:33:51","slug":"cop16-dispatch-week-1-biodiversity-credit-market-combined-session-report","status":"publish","type":"post","link":"https:\/\/esa.org\/esablog\/2024\/11\/11\/cop16-dispatch-week-1-biodiversity-credit-market-combined-session-report\/","title":{"rendered":"COP16 Dispatch: Week 1 Biodiversity Credit Market Combined Session Report"},"content":{"rendered":"

By Claire Bandet, master\u2019s student at the University of Pennsylvania<\/em><\/p>\n

One of the major topics at COP16 is biodiversity credit markets. Discussing ranges from attempting to define the term, discussing the implication of creating biodiversity credits, arguing about how such a market ought to operate, and debating whether such credits should exist in the first place.<\/p>\n

This session report combines perspectives from two panels, one discussing how to build an effective biodiversity credit market, and one discussing why such a market cannot exist and should not be pursued. I should note, that the risks and challenges panel happened earlier in the week than the high-level principles panel. I have included the session titles and their major documents below.<\/p>\n

\u201cBiodiversity Offsets and Credits: Examining Risks and Challenges\u201d<\/strong> \u2013 https:\/\/www.foei.org\/wp-content\/uploads\/2024\/10\/04-FoEI-Biodiversity-offsets-report-full-rlr-online-only.pdf<\/p>\n

\u201cHigh-Level Principles for Integrity and Governance of the Biodiversity Credit Market\u201d<\/strong> \u2013 https:\/\/www.biodiversitycreditalliance.org\/products-knowledge\/<\/p>\n

The High-Level Principles panel was created on the premise that there is a 700-billion-dollar finance gap, which cannot be filled by only public money. Therefore, it is essential to find ways to mobilize private finance by developing tools to get biodiversity into the marketplace but to avoid the issues of the carbon market. The Biodiversity Credit Alliance (BCA), who convened this panel, presented three major guidelines for the development of this market: (1) Verified Positive Outcomes for Nature, (2) Equity and Fairness for People, and (3) Good Governance for High Integrity Markets. The format of the panel was split into two groups (providers, like those who have valuable biodiversity, and buyers, those who might be interested in purchasing credit) each who spoke about their questions and needs from this market solution. Providers include the Colombian ministry of Environment and Sustainable Development and a member of the community advisory panel; buyers include Regional Development Bank of the Far South, Credit Nature, and Volvo Cars.<\/p>\n

The audience overfilled the BCA meeting room, with people standing or sitting on the floor throughout the hour and a half long discussion. The moderator noted that this represents a significant increase in interest in this topic\u2014the first principles meeting was attended by about 30 people.<\/p>\n

\"A

The BCA meeting on Biodiversity Credits at COP16 in October 2024 highlighted growing interest and larger participation.<\/p><\/div>\n

(1) Verified Positive Outcomes for Nature
\n<\/strong>Fundamentally, the goal of creating a biodiversity market is to generate positive outcomes for nature, so fundamental to the creation of a credit is scientifically verified preservation or increases in biodiversity. The buyer\u2019s side of the high-level principles panel expressed that for the credits to have value, they needed measurable outcomes, specifically ones that can be contextualized into a return on investment (ROI).<\/p>\n

The risks and challenges panel discussed this topic at length, with their conclusion being that developing a biodiversity credit market will have definite negative effects for nature. They argue that biodiversity is non fungible, destroying biodiversity in one place (clearing a temperate forest to build a residential community) cannot be understood as in conversation with the preservation or creation of biodiversity elsewhere, thus tradable credits are impossible. Furthermore, they point out that while the idea of offsets is not discussed in pro-credit conversations (for fear that it may be associated with the carbon offset issue), creating a credit market will inherently create trade, and trade will be used immediately for offsetting. From a biodiversity standpoint, offsets are not scientifically based. Biodiversity in temperate forests cannot be measured against tropical forests, and restoration projects cannot (on a reasonable time scale) achieve the biodiversity of old growth systems. They argue that \u201cthe view that nature must be sold to be saved is misplaced.\u201d<\/p>\n

(2) Equity and Fairness for People
\n<\/strong>The BCA brought up the importance of having IPLC voices in developing a credit system that is founded on free, prior, and informed consent on the part of landowners whose land would be used for biodiversity valuation. They point to their Community Advisory Panel as a method for ensuring equity and fairness for people in the market development process. The Community Advisory Panel notes a significant lack of trust between Western\/corporate governance and Indigenous governance, so there is a need to rebuild that trust in light of past (and current) damage. To build trust, the panelists suggest that financial institutions must adapt to the timeline of nature (a 2-year ROI horizon is not feasible in this realm). Volvo specifically noted that institutions are already using ecosystem services, so they must pay for them. They must ask: what will it cost not to act?<\/p>\n

From a biophilic perspective, biodiversity credits as a fungible token are disrespectful to biophilic land sovereignty. The Indigenous Environmental Alliance argues first that Indigenous Peoples should not be taken together as a unit with Local Communities (as implied by the IPLC abbreviation used by the UN and other organizations at COP) because Indigenous Peoples have a specific spiritual motivation to protect their lands. When one understands land to be a specific, animate, individual force, to assign it a tradable, monetary value becomes logically impossible.<\/p>\n

This begs the question, if we assume that the only land used for biodiversity credits is subject to true free, prior, and informed consent on behalf of the landowners, and given the strong opposition posed by groups representing large swaths of land, how much land exists for credit generation?<\/p>\n

(3) Good Governance for High Integrity Markets<\/strong><\/p>\n

The BCA stressed the importance of an effective rollout of a high-integrity market in order for the market to achieve the first two principles, and for it to have longevity, they noted first that insufficient standards would result in more abuse by the private sector against IPLCs. Second, this would trigger government intervention, and they argue that more bureaucracy means less money getting into the pockets of the landowning community.\u00a0 Further, a bad rollout of credits would destroy trust in the market, which would result in the market \u201cfailing before it even gets started.\u201d The buyer\u2019s side brought up that they feel this topic is not a safe space for business, and there is a lot of concern about accusations of greenhushing. This makes the business community wary of engaging in a biodiversity credit market, for fear that without the grace to iterate, any level of failure will result in a complete loss of investment value.<\/p>\n

There is a question of land use: where can biodiversity crediting work? Credit Nature suggests that focusing on restoration, rather than protecting that which already exists, may be more effective, since science and quantification is a better-known system. However, the risks and challenges panel disagree with restoration as a solution, on the grounds that the prerequisite of empty land (land that can be used for restoration) is an illusion.<\/p>\n

The threat of offsets: both panels agree that on a broad scale and with respect to land use and biodiversity preservation, avoiding damage is the best scenario, followed by minimizing damage, then restoring land, and ending with offsetting. However, the risks and challenges panel note that when offsets become an option, as they are likely to with the creation of credits, offsetting becomes the preferred option by market forces.<\/p>\n

The session went overtime, so while the audience was able to ask questions, they were not answered in session. The questions were:<\/p>\n

    \n
  1. Companies look for the cheapest possible credit in the carbon market. How do we prevent the race to the bottom in the biodiversity credit market?<\/li>\n
  2. A question from an audience member representing Indigenous Peoples: do you feel ready to adapt to the worldview and economic system of Indigenous Peoples, given we (Indigenous Peoples) have been adapting to yours for decades and centuries?<\/li>\n
  3. How will you integrate robustness through time into the credit calculation given climate change?<\/li>\n<\/ol>\n

    Disclaimer:<\/strong> Opinions are solely those of the guest contributor and not an official ESA policy or position.<\/p>\n","protected":false},"excerpt":{"rendered":"

    At COP16 in October 2024, Claire Bandet, a master\u2019s student at the University of Pennsylvania, shared insights on biodiversity credit markets. The discussions ranged from defining the term to exploring its risks and potential, with two panels offering opposing views: one advocating for an effective market and the other arguing against it.<\/p>\n","protected":false},"author":50,"featured_media":19890,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1926,10],"tags":[],"class_list":["post-20206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cop16","category-ecology-in-policy"],"_links":{"self":[{"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/posts\/20206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/users\/50"}],"replies":[{"embeddable":true,"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/comments?post=20206"}],"version-history":[{"count":5,"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/posts\/20206\/revisions"}],"predecessor-version":[{"id":20218,"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/posts\/20206\/revisions\/20218"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/media\/19890"}],"wp:attachment":[{"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/media?parent=20206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/categories?post=20206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/esa.org\/esablog\/wp-json\/wp\/v2\/tags?post=20206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}