{"id":60097969,"date":"2025-09-08T12:39:16","date_gmt":"2025-09-08T11:39:16","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60097969"},"modified":"2025-09-10T12:55:15","modified_gmt":"2025-09-10T11:55:15","slug":"the-tangle-of-biodiversity-credits","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/nature\/the-tangle-of-biodiversity-credits\/","title":{"rendered":"The tangle of biodiversity credits"},"content":{"rendered":"\n<p>Properly funding nature\u2019s recovery on a global scale will require a staggering amount of money.<\/p>\n\n\n\n<p>In 2021, The Nature Conservancy, an environmental non-profit, <a href=\"https:\/\/www.nature.org\/en-us\/what-we-do\/our-insights\/perspectives\/closing-nature-finance-gap-cbd\/\">estimated<\/a> that reversing the global decline of biodiversity would require between USD 722 billion and USD 967 billion per year by 2030.<\/p>\n\n\n\n<p>The lion\u2019s share of that is expected to come from public funding: redirected government subsidies, taxes and direct investment. But a substantial amount will likely need to come from the private sector.<\/p>\n\n\n\n<p>That\u2019s where biodiversity credits could come in.<\/p>\n\n\n\n<p>These tradable certificates aim to direct money from individuals and companies toward activities that protect and restore nature.<\/p>\n\n\n\n<p>The idea took off after COP15 \u2013 the 2022 United Nations nature summit in Montreal. As part of <a href=\"https:\/\/dialogue.earth\/en\/nature\/cop15-reaches-historic-agreement-to-protect-biodiversity\/\">a historic agreement<\/a> to reverse biodiversity loss, almost 200 countries pledged to collectively spend \u201cat least USD 200 billion per year\u201d by 2030 on efforts to conserve and restore nature worldwide.<\/p>\n\n\n\n<p>The agreement, known as the Global Biodiversity Framework, proposed \u201cinnovative schemes\u201d to help reach this funding target, including \u201c<a>biodiversity offsets and credits<\/a>\u201d.<\/p>\n\n\n\n<p>This mention in a UN-level agreement sparked a wave of excitement. Since then, more than 50 organisations have set up nature credit schemes across the globe, including influential companies in the carbon market, like <a href=\"https:\/\/verra.org\/wp-content\/uploads\/2024\/10\/SD-VISta-Nature-Framework-v1.0.pdf\">Verra<\/a> and South Pole.&nbsp;<\/p>\n\n\n\n<p>At the same time, environmental groups have come out in force to oppose the credits. More than 250 civil society organisations have signed an <a href=\"https:\/\/www.biodmarketwatch.info\/\">open letter<\/a> labelling them \u201cfalse solutions\u201d, citing the \u201cserious failings\u201d of the carbon market before them.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-does-it-work\">How does it work?<\/h2>\n\n\n\n<p>Imagine you look after one hectare of forest. If, after one year, you can demonstrate a measurable increase in biodiversity on the land, you could sell credits representing those gains.<\/p>\n\n\n\n<p>For example, Drumadoon farm on the Isle of Arran, west Scotland, is the site of a recently launched credit project. A series of interventions are <a href=\"https:\/\/creditnature.com\/cn_projects\/drumadoon-isle-of-arran\/\">planned<\/a> at the 260-hectare site, including native tree planting, which is forecast to produce 70,000 nature credits over 10 years.<\/p>\n\n\n\n<p>A single project can involve many organisations. Drumadoon includes a landowner, a credit scheme company, a rewilding charity, a project developer, a local community group and a carbon-trading platform.<\/p>\n\n\n\n<div class=\"wp-block-cd-article-image aligncenter block--article-image block--article-image--article\" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><div class=\"block--article-image__column\"><div class=\"hide-expand block--article-image__image\"><img class=\"lazy\" data-src=\"https:\/\/dialogue.earth\/content\/uploads\/2025\/09\/Drumadoon-on-the-Isle-of-Arran-Scotland_Alamy_E8G1EX-scaled.jpg\" data-srcset=\"https:\/\/dialogue.earth\/content\/uploads\/2025\/09\/Drumadoon-on-the-Isle-of-Arran-Scotland_Alamy_E8G1EX-768x524.jpg 768w, https:\/\/dialogue.earth\/content\/uploads\/2025\/09\/Drumadoon-on-the-Isle-of-Arran-Scotland_Alamy_E8G1EX-1024x699.jpg 1024w, https:\/\/dialogue.earth\/content\/uploads\/2025\/09\/Drumadoon-on-the-Isle-of-Arran-Scotland_Alamy_E8G1EX-scaled.jpg 2560w\" data-sizes=\"(max-width: 600px) 768px, (max-width: 1024px) 1024px, 2560px\" alt=\"Doon cliff at Drumadoon \"\/><\/div><div class=\"block--article-image__content\"><div itemprop=\"caption\" class=\"block--article-image__caption\">The Doon cliff at Drumadoon on the Isle of Arran, west Scotland. A series of interventions are planned at Drumadoon farm to produce 70,000 nature credits over 10 years (Image: Scott Hortop Travel \/ Alamy)<\/div><\/div><\/div><meta itemprop=\"contentUrl\" content=\"https:\/\/dialogue.earth\/content\/uploads\/2025\/09\/Drumadoon-on-the-Isle-of-Arran-Scotland_Alamy_E8G1EX-scaled.jpg\"\/><meta itemprop=\"contentSize\" content=\"914 KB\"\/><meta itemprop=\"height\" content=\"1747\"\/><meta itemprop=\"width\" content=\"2560\"\/><meta itemprop=\"author\"\/><meta itemprop=\"representativeOfPage\" content=\"true\"\/><\/div>\n\n\n\n<p>Credits are not to be confused with biodiversity offsets or habitat banks. Though similar, these are types of environmental regulation that have been around since the 1970s. Examples include <a href=\"https:\/\/www.gov.uk\/government\/collections\/biodiversity-net-gain\">England<u>\u2019<\/u>s biodiversity net gain<\/a> and <a href=\"https:\/\/www.epa.gov\/cwa-404\/mitigation-banks-under-cwa-section-404\">mitigation banks<\/a> in the US. A company may be required to purchase offsets to compensate for any unavoidable ecological damage caused by a development, such as a mine or hydropower dam. The money pays for the restoration of a similar ecosystem elsewhere.<\/p>\n\n\n\n<p>By contrast, biodiversity credits are part of an unregulated international market. Anyone can sell them and anyone can buy them \u2013 via online <a href=\"https:\/\/app.regen.network\/projects\/1\">marketplaces<\/a>, <a href=\"https:\/\/www.emstream.co.uk\">brokers<\/a> or directly from the project developer.<\/p>\n\n\n\n<p>Today, credits generally sell for anywhere between USD 2 and USD 415.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-putting-nature-into-numbers\">Putting nature into numbers<\/h2>\n\n\n\n<p>It is hoped that selling biodiversity outcomes as discrete units will be more appealing to large private investors, who want to be able to report quantifiable units of nature.<\/p>\n\n\n\n<p>\u201cIf you can\u2019t report in a quantitative way the returns of your investment, it\u2019s pretty certain that money is going to stop flowing very soon,\u201d says Edmund Pragnell, nature finance lead at CreditNature, a UK-based biodiversity credit scheme.<\/p>\n\n\n\n<p>But what exactly counts as a discrete biodiversity unit?<\/p>\n\n\n\n<p>Unlike with greenhouse gas emissions, which can be measured in tonnes, there is no single standardised metric that can account for nature\u2019s complexity. Attempts to do so present a \u201cmonumental challenge\u201d, according to a 2024 <a href=\"https:\/\/royalsocietypublishing.org\/doi\/10.1098\/rspb.2024.2353\">scientific review<\/a> of biodiversity credit schemes.<\/p>\n\n\n\n<p>This hasn\u2019t stopped credit-issuing companies, many of which have opted to design their own methodology.<\/p>\n\n\n\n<p>Some issue credits based on biodiversity gains. In other words, the landowner must prove that over time, certain metrics of ecological health have gone up, or remained constant. <a href=\"https:\/\/www.planvivo.org\/pv-nature\">PlanVivo<\/a>, for example, issue one credit per 1% of \u201cbiodiversity increase\u201d per hectare, per year.<\/p>\n\n\n\n<p>Other schemes reward management instead of outcomes. One jaguar credit from <a href=\"https:\/\/www.erabrazil.com\/biodiversity\">ERA<\/a> represents the \u201cstewardship\u201d of one hectare of umbrella species habitat \u2013 in this case, Brazil\u2019s Pantanal wetland \u2013 for a year.<\/p>\n\n\n\n<p>\u201cBecause the market is voluntary, no one prevents you from interpreting nature differently,\u201d says Simas Gradeckas, nature finance researcher and member of the <a href=\"https:\/\/www.iapbiocredits.org\">International Advisory Panel on Biodiversity Credits<\/a> (IAPB) measurement working group.<\/p>\n\n\n\n<p>\u201cThat makes it difficult for buyers to understand what they\u2019re buying.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-stumbling-blocks\">Stumbling blocks<\/h2>\n\n\n\n<p>Despite the excitement, business isn\u2019t exactly booming.<\/p>\n\n\n\n<p>The total value of credits sold as of September 2024 is <a href=\"https:\/\/pollinationgroup.com\/global-perspectives\/state-of-voluntary-biodiversity-credit-markets\/\">estimated<\/a> at between USD 325,000 and USD 1.87 million. For perspective, that\u2019s 0.001% of the USD 200 billion a year that countries have pledged to raise by 2030.<\/p>\n\n\n\n<p>The maze of options is one factor holding back would-be buyers. \u201cThey shouldn&#8217;t need to go through fifty-plus biodiversity credit schemes to choose which one to support,\u201d says Gredackas. \u201cThe due diligence required is just too heavy.\u201d<\/p>\n\n\n\n<div class=\"wp-block-cd-pull-quote block--pull-quote\"><div class=\"block--pull-quote__wrapper\"><blockquote class=\"block--pull-quote__quote\">Investors don\u2019t get out of bed unless they know they&#8217;re going to get their money back, and we need their money<\/blockquote><cite class=\"block--pull-quote__cite\">Edmund Pragnell, nature finance lead at CreditNature<\/cite><\/div><\/div>\n\n\n\n<p>Another is that the intended customers of nature credits \u2013 large corporations and financial institutions \u2013 see little return. So far, they are mainly used to support marketing and branding efforts, according to a <a href=\"https:\/\/pollinationgroup.com\/global-perspectives\/state-of-voluntary-biodiversity-credit-markets\/\">2024 survey<\/a> of 16 nature credit companies by climate investment advisory firm Pollination.<\/p>\n\n\n\n<p>\u201cMost of them don\u2019t see a direct commercial benefit yet,\u201d says Gredackas.<\/p>\n\n\n\n<p>One solution is integrating nature credits into existing products to create demand. Around 20 companies have started <a href=\"https:\/\/airtable.com\/appXHR0Nau8HqfPa8\/shrt5JZqmLMrQgdfF\/tblTM31mqfzbGGBtR\/viwLkSPMhe3K76baF\">selling<\/a> combined carbon and biodiversity credits, or selling both as a package. It\u2019s a practice known as \u201cbundling\u201d or \u201cstacking\u201d.<\/p>\n\n\n\n<p>CreditNature also allows limited secondary trading of credits in the hope it will stimulate interest by allowing them to be sold at a profit. \u201cInvestors don\u2019t get out of bed unless they know they&#8217;re going to get their money back, and we need their money,\u201d explains Pragnell.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-offsets\">Offsets<\/h2>\n\n\n\n<p>One widely discussed potential use for biodiversity credits is as offsets, similar to the government schemes used in the UK and US but market based. This means organisations could purchase credits to compensate for destruction of nature that they deem unavoidable.<\/p>\n\n\n\n<p>\u201cThat\u2019s where we see the most interest from buyers,\u201d says Hannah Simmons, CEO of ERA, a carbon and nature credit project developer in Brazil.<\/p>\n\n\n\n<p>It\u2019s a hotly contested issue. Critics point to the <a href=\"https:\/\/australiainstitute.org.au\/post\/here-are-23-times-carbon-offsets-were-found-to-be-dodgy-2\/\">well-documented problems<\/a> with carbon offsets, whose claimed climate benefits are often found to have been exaggerated. Dialogue Earth <a href=\"https:\/\/dialogue.earth\/en\/climate\/phantom-rice-projects-expose-voluntary-carbon-market-failings\/\">recently reported<\/a> on the sale of carbon credits from \u201cphantom\u201d rice cultivation projects that did not exist.<\/p>\n\n\n\n<a class=\"wp-block-cd-related-news alignright block--related-news loading\" data-post-id=\"60022069\"><div class=\"block--related-news__image\"><\/div><div class=\"block--related-news__content\"><span class=\"block--related-news__heading\">Recommended<\/span><span class=\"block--related-news__title\"><\/span><\/div><\/a>\n\n\n\n<p>Challenges facing regulatory biodiversity offset schemes also offer a warning, says Hannah Wauchope, lecturer in ecology and conservation at the University of Edinburgh. Outcomes claimed by offset projects frequently aren\u2019t borne out when follow-up investigations are carried out on the ground, explains Wauchope, who co-authored the aforementioned 2024 scientific review of credit schemes.<\/p>\n\n\n\n<p>Trying to replicate this in an unregulated, international market where profit is the primary motive is \u201cmore risky\u201d, she says. \u201cThere are much higher uncertainties and much more potential for abuse of the system.\u201d<\/p>\n\n\n\n<p>Despite this, some influential groups back the idea.<\/p>\n\n\n\n<p>The IAPB, a UK and France-backed initiative, <a href=\"https:\/\/www.iapbiocredits.org\/framework\">lists<\/a> \u201clocal compensation of biodiversity impacts\u201d as an acceptable use for credits in its Framework for High-Integrity Biodiversity Credit Markets, but specifies this must be local-to-local and like-for-like.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-high-integrity\">High integrity<\/h2>\n\n\n\n<p>The framework, launched at last year&#8217;s COP16 nature summit in Colombia, was written by the IAPB, Biodiversity Credit Alliance (BCA) and the World Economic Forum. It is intended as a guide for the biodiversity credit market that sets out standards for how companies in the sector should operate. The rules focus on transparency and verification of outcomes; equity and fairness for people; and good governance.<\/p>\n\n\n\n<a class=\"wp-block-cd-related-news alignright block--related-news loading\" data-post-id=\"60052084\"><div class=\"block--related-news__image\"><\/div><div class=\"block--related-news__content\"><span class=\"block--related-news__heading\">Recommended<\/span><span class=\"block--related-news__title\"><\/span><\/div><\/a>\n\n\n\n<p>It&#8217;s part of a wider effort by advocates of biodiversity credits to learn from the mistakes of the carbon market, following accusations of <a href=\"https:\/\/grain.org\/en\/article\/7190-from-land-grabbers-to-carbon-cowboys-a-new-scramble-for-community-lands-takes-off%23_ftn26\">land-grabbing<\/a> and <a href=\"https:\/\/news.mongabay.com\/2024\/10\/worlds-largest-carbon-credit-deal-in-the-amazon-faces-bumpy-road-ahead\/\">violating<\/a> the rights of Indigenous peoples.<\/p>\n\n\n\n<p>To this end, the BCA has <a href=\"https:\/\/www.biodiversitycreditalliance.org\/cap\/\">set up<\/a> a communities advisory panel made up of 40 members from Indigenous peoples and local communities worldwide. In 2024, the panel <a href=\"https:\/\/www.biodiversitycreditalliance.org\/wp-content\/uploads\/2024\/08\/EN-Recommendations-from-the-CAP-for-consultation.pdf\">published<\/a> recommendations for companies entering the market. For example, market actors should only proceed with projects if free, prior and informed consent is granted by Indigenous communities that might be affected.<\/p>\n\n\n\n<p>The International Institute for Environment and Development, a UK think-thank, has <a href=\"https:\/\/www.iied.org\/sites\/default\/files\/pdfs\/2022-11\/21216IIED.pdf\">suggested<\/a> integrating traditional and cultural knowledge into credit methodologies through collaboration with Indigenous peoples. It also proposed that companies donate a percentage of a project\u2019s revenue to communities or support Indigenous peoples to strengthen their land tenure rights.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-a-strategic-tool\">A strategic tool<\/h2>\n\n\n\n<p>Governments are showing an interest.<\/p>\n\n\n\n<p>In May 2024, Scotland <a href=\"https:\/\/www.natcert.earth\/creditnature-awarded-to-develop-voluntary-biodiversity-credit-mechanism-for-scotland\/\">commissioned<\/a> CreditNature to develop a voluntary biodiversity credit mechanism for the country. In July this year, the European Commission published a \u2018<a href=\"https:\/\/ec.europa.eu\/commission\/presscorner\/detail\/en\/ip_25_1679\">Roadmap towards nature credits<\/a>\u2019, in which it announced the creation of a new EU expert group and plans to launch pilot nature credit projects over the next two years.<\/p>\n\n\n\n<p>Biodiversity credits are \u201ca strategic tool in the nature finance toolbox,\u201d says Gredackas.<\/p>\n\n\n\n<p>He adds that governments are taking \u201cinspiration\u201d from the metrics and methodologies used by private companies to <a href=\"https:\/\/naturalengland.blog.gov.uk\/2024\/11\/08\/international-use-of-englands-biodiversity-metric-having-global-impact\/\">develop<\/a> their own statutory biodiversity offset schemes. \u201cThese are experimentation grounds for the compliance markets that are being spun up. You can\u2019t play around too much on the compliance side, because the stakes are too high.\u201d<\/p>\n\n\n\n<div class=\"wp-block-cd-pull-quote block--pull-quote\"><div class=\"block--pull-quote__wrapper\"><blockquote class=\"block--pull-quote__quote\">This idea of paying for nature is not new<\/blockquote><cite class=\"block--pull-quote__cite\">Hannah Wauchope, University of Edinburgh<\/cite><\/div><\/div>\n\n\n\n<p>The Nature Conservancy has proposed a hybrid approach. It says governments could issue \u201c<a href=\"https:\/\/www.nature.org\/content\/dam\/tnc\/nature\/en\/documents\/TNCView_BiodiversityCredits_EXTERNAL.pdf\">strategic biodiversity certificates<\/a>\u201d that are linked to the 23 UN targets agreed to in the Global Biodiversity Framework. Companies would buy credits from pre-approved projects as a voluntary \u201ccontribution\u201d to the host country\u2019s biodiversity goals.<\/p>\n\n\n\n<p>Canada-based think-thank IISD has <a href=\"https:\/\/dialogue.earth\/en\/nature\/47862-explainer-what-is-debt-for-nature-swap\/\">suggested<\/a> that countries negotiating <a href=\"https:\/\/dialogue.earth\/en\/nature\/47862-explainer-what-is-debt-for-nature-swap\/\">debt-for-nature swaps<\/a> could offer biodiversity credits to attract funding from private investors and philanthropists.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-not-so-new\">Not so new?<\/h2>\n\n\n\n<p>Many environmental groups remain unconvinced.<\/p>\n\n\n\n<p>Greenpeace and Survival International are among the civil society organisations to have signed the <a href=\"https:\/\/www.biodmarketwatch.info\/\">public statement<\/a> expressing their opposition.<\/p>\n\n\n\n<p>WWF has <a href=\"https:\/\/wwfint.awsassets.panda.org\/downloads\/biodiversity-credits-position---october-2024---final.pdf\">refused<\/a> to endorse voluntary biodiversity credits without clear safeguards against offsetting, secondary trading, abuse of Indigenous rights, and more. Friends of the Earth called the European Commission\u2019s nature credit plan released last month a \u201c<a href=\"https:\/\/friendsoftheearth.eu\/press-release\/eus-nature-credits-a-roadmap-to-greenwashing\/\">roadmap to greenwashing<\/a>\u201d.<\/p>\n\n\n\n<p>Campaign for Nature, the group behind the 30&#215;30 campaign to protect 30% of earth by 2030, has <a href=\"https:\/\/www.campaignfornature.org\/funding-nature-essential-public-finance\">warned<\/a> that \u201cinflated\u201d claims of the potential scale and rapid growth of credit markets discourage governments from increasing public spending.<\/p>\n\n\n\n<p>\u201cThere\u2019s a lot of hype [&#8230;] about this being the new thing that\u2019s going to solve conservation. This is really just an iteration of something that\u2019s been going on for a long time. This idea of paying for nature is not new,\u201d says Wauchope, of the University of Edinburgh.<\/p>\n\n\n\n<p>\u201cBiodiversity credits are not really that different from carbon credits.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Funding is needed to reverse global biodiversity loss. A credits market has been touted as a solution, but environmental groups say \u2018don\u2019t be fooled\u2019<\/p>\n","protected":false},"author":3513,"featured_media":60097983,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[764],"tags":[511,523,50042209],"hashtags":[],"country":[50003615],"class_list":["post-60097969","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-nature","tag-biodiversity","tag-conservation","tag-offsets","country-world-2"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v26.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The tangle of biodiversity credits | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"Funding is needed to reverse global biodiversity loss. 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