There is an urgent need to increase financing for biodiversity, given its intrinsic value, its critical role for Indigenous Peoples and local communities, for national economies, for food security and for its contribution to addressing climate goals.
The One Forest Summit held in Libreville in March 2023 gave significant attention to biodiversity credits, including biodiversity-positive carbon credits. Discussions were informed by a high-level report entitled ‘Innovative Finance for Nature and People: Opportunities and Challenges for Biodiversity-Positive Carbon Credits and Nature Certificates’, which was developed and presented under the auspices of the Global Environment Facility (GEF). See the full report here.
NatureFinance and Carbone 4 have co-authored the paper ‘Harnessing Biodiversity Credits for People and Planet’, in collaboration with the GEF, and at the request of the French Government. It highlights recent trends, identifies critical design challenges, and sets out an initial Roadmap for addressing them by crowding in the insights and experience of partners that will collectively chart an effective way forward on these rapidly evolving markets. Download the paper here.
The paper identifies five core design challenges for enabling high-integrity biodiversity credit markets:
- Providing credible, timely, and affordable measurement and monitoring of the state, improvement and/or maintenance of biodiversity.
- Scaling sustained and high-integrity demand for credits and associated financing.
- Ensuring sufficient high-integrity supply of credits that offer nature positive outcomes.
- Securing adequate price and equitable distribution of rewards to project developers, sovereigns, and Indigenous Peoples and local communities.
- Establishing robust governance and broader, transparent institutional arrangements.
At CBD COP15 last December the Kunming-Montreal Global Biodiversity Framework (KMGBF) recognised the contribution which innovative financial mechanisms for the conservation and restoration of nature, including biodiversity credits, can make to achieving its ambitious goals and targets. The surge has included action in developing definitions and taxonomies, measurement and certification schemes, trading pilots, national policy and regulatory developments, as well as early attempts to link credits to other financing instruments and initiatives.
Highlights
- It is imperative that global financial flows are aligned with preserving and restoring biodiversity – at present, the global economy’s depletion of nature is unsustainable.
- Biodiversity credit markets are a potentially important mechanism for financing biodiversity (alongside other public and market-based financial instruments), particularly in encouraging businesses to value and invest in biodiversity.
- To be credible, impactful, and ensure equitable outcomes for people and the planet, biodiversity credit markets must evolve in a high-integrity manner.
- Overcoming these design challenges will require urgent collective leadership by ambitious countries. The Global Roadmap provides a strong basis to do this and to develop a clear way forward.
Nature Restoration Law
Yesterday, on 12th July 2023, the European Parliament voted to support an amended version of the EU Restoration Law. Despite some political obstacles, it is heartening to see that the European Parliament has found a path ahead, even though the present version is less ambitious than many businesses have been calling for. Amendments were adopted that aim to delay proposals and cut references to clear targets to protect and restore nature. However, we now look forward to productive and positive discussion about how this law can benefit nature, people, and the environment. The European Council and European Parliament can now begin negotiations to ratify the legislation as all EU member states have already agreed on their common position. Next week we will return to this topic.
SETIN’s work
We help organizations to think about the future, to imagine it, and to implement a set of concrete and innovative Nature Financing Mechanisms, including Conservation Finance, Biodiversity Finance, and Protected Areas Financing.
Here are some of our experiences in this area:
- Indonesia Preparation of the “Investing in the Komodo Dragon and other globally threatened species in Flores” (IN-FLORES).
- Development of Financing Mechanisms for Sustainable Land and Forest Management in Akkar and Jbeil Districts, under the Land Degradation Neutrality of mountain landscapes in Lebanon (LDN) GEF/UNDP project.
- Preparation of a project proposal for Guinea-Bissau to the Legacy Landscape Fund (total grant: 15 M USD).
- Consultant to strengthen the national framework for Protected Areas financial sustainability (Mainstreaming biodiversity conservation into the tourism sector in synergy with a further strengthened protected areas system in Cabo Verde GEF Project).
References:
Carbone4 & Nature Finance (2023). Harnessing Biodiversity Credits for People and Planet. URL: https://www.carbone4.com/publication-harnessing-biodiversity-credits-for-people-and-planet [Accessed in July 2023]