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Issue Paper #3

Definition of a Biodiversity Credit

This issue paper contributes to the clarification of concepts and language which are instrumental in the process of developing an inclusive and high-integrity market in biodiversity credits. In the rapidly emerging landscape of ecological units and markets, all stakeholders need to speak the same language. This issue paper brings together many perspectives to present an inclusive but clear definition that sets minimum standards for biodiversity credits and projects associated with them.

“US$9.5 trillion is needed cumulatively from 2022 to 2050 to keep climate change below 2°C, stabilise biodiversity levels and achieve land degradation neutrality.”

UNEP State of Finance for Nature, 2022 UNEP logo

Alongside a strengthened carbon market, a biodiversity credit market is in the early stages of being established. This market needs to be efficient and robust if it is to align private sector finance with nature positive goals and achieve just and equitable outcomes.

Why the Biodiversity Credit Alliance has been formed

The Biodiversity Credit Alliance (BCA) exists to provide guidance for the establishment of a credible and scalable market that stands up to the scrutiny of multiple stakeholders. Key among them are Indigenous Peoples and Local Communities at the frontline of the biodiversity crisis. Together we’re working to ensure strong foundations and principles exist and can be applied by all market participants going forward.

Photo by Zain Raza

Biodiversity is life

Ecosystems and the biodiversity they support provide us with the food, water and medicine that are key to healthy human existence. Biodiversity contributes enormously towards sustainable growth and economic stability. It is key to the spiritual, cultural and social wellbeing of Indigenous Peoples and Local Communities, many of whom live in and care for the most biodiverse areas of our world. As a direct result of biodiversity, Earth is also made more resilient to climate change, with areas such as forests, peat marshes, coral reefs and seagrass beds acing as vast sinks that absorb carbon, preventing it from entering the atmosphere. Essentially, biodiversity forms a web of life without which humanity cannot thrive.

Investing where value is greatest

Despite the immense value it has, nature is in crisis thanks to human economic activity. With a greater understanding of the role of biodiversity, however, both public and private sector stakeholders now see the need to shift from extractive economic paradigms that deplete nature, towards regenerative ones that keep it intact, or help it function even better over time. In this context, biodiversity credits have been identified by the Kunming-Montreal Global Biodiversity Framework (GBF) as one of several instruments that have the potential to mobilize private sector finance for nature.

Engaging with communities to put nature first

Indigenous Peoples and Local Communities (IPs and LCs) are frontline stewards of nature. By way of land rights and/or traditional knowledge, they have a deep connection to nature and by virtue of the significant role they already play as nature’s custodians, BCA believes they should have a central role in the formulation of a biodiversity credit market. Only by respecting IP’s and LC’s rights in terms of Free, Prior and Informed Consent (FPIC), as recognized in the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) can positive outcomes for nature and fair and equitable outcomes for all stakeholders be assured.

A new framework for a new market

In order to assess the value of efforts to enhance or maintain biodiversity, many variables must be consistently measured and accounted for. This calls for the utmost transparency in a complex system of validation and verification. A standard framework that can be agreed by all stakeholders will need broad adoption if this new market is to operate efficiently and at scale. To these ends, BCA envisages a biodiversity credit market that is underpinned by a digital framework that utilizes innovative technologies.

Our Vision

BCA’s vision is a transparent, trustworthy and efficient global market in biodiversity credits founded on just and equitable principles, and underpinned by innovation.

BCA works to facilitate the transition to a nature positive economy aided by an integrated, efficient and scaled biodiversity credit market. BCA considers biodiversity credits to be an effective complement to, but not a replacement of, the private sector’s supply chain transformation efforts. BCA views biodiversity credits as an effective mechanism for advancing the private sector’s participation in ecosystem remediation and transformative landscape approaches in line with science-based principles.

Photo by Gaurav Gupta

Our mission

BCA is a voluntary international alliance that brings together diverse stakeholders to support the realization of the Kunming–Montreal Global Biodiversity Framework, in particular Targets 19(c) and (d), which “encourage the private sector to invest in biodiversity” utilizing, amongst others “biodiversity credits … with social safeguards.”

Our mission is twofold:

  1. Help steer the development of a biodiversity credit market by building a framework of high-level, science-based principles.
  2. Provide guidance and encourage best practice for market participants on the application of these principles, empowering them to achieve and maintain equitable, high quality transactions that meet strict integrity criteria.
Photo by Gaurav Gupta