(River surrounded by woodlands, (c) Sam Turley, rspb-images.com)
This blog is written by Jack Rhodes, an independent consultant for RSPB on biodiversity net gain and other nature markets. He is a conservation programme manager who has worked as an environmental and infrastructure economist.
Biodiversity credits after CoP16
Can markets do the heavy lifting on paying for nature? Who pays is after all one of the knottiest problems in conservation, and one that was not solved in Cali. Business and industry will need to contribute alongside governments, but outside of the voluntary carbon market the structures don’t yet exist to channel private funds into large-scale conservation projects.
Piece by piece and from a swirl of acronyms, these structures are starting to emerge. The Taskforce for Nature-Related Financial Disclosures (TNFD) and Science Based Targets Network (SBTN) are starting to set out why companies need to assess, disclose and address their impacts on nature, which will increase their need to fund nature conservation. And Cali saw the publication, by the International Advisory Panel on Biodiversity Credits (IAPB), of a framework for high integrity biodiversity credit markets. This could define what companies purchase and so how funds are used; its publication matters.
How strong is the IAPB framework?
Overall this framework is a sensible and useful document, holding well-considered positions and willing to take decisions that others have dodged – in particular the decision to support credits as a unit for ‘offsetting’, but only where compensation is local and like-for-like. The framework is weakest in how many ‘should’ statements and how few ‘musts’ it contains, but the spirit of the framework is clear and so is its intention to deliver on the promise of ‘high integrity’.
This matters to the RSPB. We need to see high integrity nature markets operating at scale to help address the biodiversity crisis. Also, as an operational NGO with a range of carbon and nature credit projects, we have a basic requirement for high integrity in the wider market. If it’s not there then we are frozen out of markets to avoid greenwashing risks.
So we needed to see the mitigation hierarchy made mandatory and we needed to see careful limits on offsetting. We also needed to see the option of selling ex ante credits before new nature projects reach their final targets, or there simply won’t be the cashflow to start them up. We needed to see compliance markets aimed at reducing corporate impacts on nature in the first place, that go beyond simply Payments for Environmental Services. All of these are in the framework.
Urgent and ambitious leadership
The next steps will be more important than the wording of this document. The pitfalls will be in the implementation, and whether the IAPB over the next few years can help track, steer and challenge how markets develop.
The framework calls for governments to create nature markets at great pace, to align them with the Global Biodiversity Framework and the TNFD reporting requirements, to keep registers of approved biodiversity credit methods and projects. It asks NGOs and communities to deliver projects and finance institutions to support them in developing this capacity. It has strong principles for how local communities and indigenous people should be involved in projects. Each of these will need to be tracked and backed up.
This framework calls for ‘urgent and ambitious leadership’ from all concerned - it will be needed. For the IAPB’s part, this includes help to screen out inappropriate uses of biodiversity credits, and providing a clear connection between biodiversity credits back to TNFD and corporate claims of being Nature positive. For governments, it means policy and legislation to make sure that companies do their best for nature. The UK government has made moves in this direction, but its flagship net gain legislation and draft British Standards are not yet fully aligned with these IAPB principles and are not yet a coherent response to the collapse of our natural world. We urgently need to see a coherent approach in the UK, which steers enough investment toward our national priorities.