The Future of Biodiversity Credit Markets

‍About the paper

For biodiversity credit markets to make a meaningful contribution to advancing equity, nature and climate goals, they must deliver in terms of price, scale and impact. This paper provides both framing and practical proposals for these markets to produce the scaled financing and incentives needed for businesses and economies to better align with the Global Biodiversity Framework and the Paris Agreement. We welcome comments and suggestions enabling us to continue building a broadly embraced approach to the design, governance and execution of high-performance nature credit markets.

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The paper covers 5 key areas:

1. Historic Pivot to Nature Markets

2. The Rise of Nature Credit Markets

3. Governing Biodiversity Credit Markets

4. Building High-Performance Biodiversity Credit Markets

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Key themes

• This paper puts forward a taxonomy for biodiversity credit markets, namely as philanthropic claims/ certificates; regulatory (mandated) offsets; biodiversity-linked carbon offsets; in-setting credits; biodiversity offsets; and biodiversity financial assets.
• It proposes a market governance stack to guide better outcomes of new nature credit markets, taking into account lessons learnt in carbon credit markets.
• It unpacks three core performance specification elements, namely: a) scale; b) price and c) impact.

• It calls for a coherent, multi stakeholder and multi layered approach to designing and overseeing the development of biodiversity credit markets. This approach would address the multifaceted nature of heterogenous biodiversity credit markets, while incorporating market performance specifications, including governance.