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“BCA Issue Paper No. 1: Demand -side Sources and Motivation for Biodiversity Credits” is available here for download.

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"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

Photo by Zain Raza

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.

Who we are

We’re a group of scientists, academics, conservation practitioners, and standard setters, with direct links to Indigenous Peoples and Local Communities on our Communities Advisory Panel (CAP). We embrace participation from the private sector, with the World Business Council for Sustainable Development as a key partner. BCA is dynamic, open, and growing, and we welcome new members.

Our Mission

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

Our mission is twofold:

Help steer the development of a voluntary biodiversity credit market by building a framework of high-level, science-based principles.
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.

What we are working on

BCA has established Working Groups to define and develop relevant concepts to best assist the formulation of a transparent and trusted market. Working Group members have at all times endeavored to balance out the urgency of the moment with the need for rigor, consultation and due diligence. BCA thanks all participants and contributors for their positive and collaborative spirit. BCA also welcomes further participation and engagement from stakeholders not yet represented.

Photo by Alenka Skvarc

Learning from local knowledge

Full and effective engagement with Indigenous Peoples and Local Communities at the frontline of the nature crisis should be central to any nature market strategy. CAP (Communities Advisory Panel) is a specialist panel which allows BCA to consult with and learn from Indigenous Peoples and Local Communities.

With that in mind, CAP members will develop a Charter to guide biodiversity credit market actors to engage with Indigenous Peoples and Local Communities, respectfully and lawfully, ultimately increasing their ability to restore and conserve nature.
The BCA discussion paper, Communities and nature markets: Building just partnerships in biodiversity credits argues that investors should be more aware of the important role of Indigenous Peoples and Local Communities in stewarding nature and biodiversity—and by extension, the impetus for them to lead in biodiversity credit markets. This paper focuses on the business case for investors to support indigenous- and locally-led approaches in biodiversity credit markets on fair terms, that ultimately lead to reduced risk and better outcomes for all stakeholders.

Available here

Definitions

For a biodiversity credit market to gain traction, it will need to be informed by a common typology, with terms that are clearly defined. What is a biodiversity credit? What do terms like "additionality" and "gain" mean when it comes to biodiversity? BCA is in the process of publishing an issue paper on Definitions and it will be available here in due course.

Demand-side dynamics

BCA anticipates rapid growth in demand for various types of biodiversity and nature credits that can be purchased to meet nature positive goals.
With a better understanding of demand drivers, diverse stakeholders can ensure that potential demand for biodiversity credits is efficiently matched by supply.
This issue paper makes a first foray into understanding potential sources of demand for biodiversity credits, demand drivers, and factors that may influence demand.

Available here

Quality and integrity

Markets can only be built where there is trust, and trust is built on the foundations of quality and integrity. This issue paper explores various scientific review processes and assessment frameworks, and incorporates relevant guardrails developed for the carbon market. It goes on to provide a set of recommendations to peer-review and assess the eligibility of biodiversity credits being minted through specific methodologies, so that a foundation for robust governance is established from the outset.

A digital approach

All markets need transparency, traceability, and scalability. Taking learnings from previous nature markets, BCA aims to design and implement digital architecture based on Distributed Ledger Technology to underpin the biodiversity credits market. While other markets grapple with digital transformation, there is an opportunity to build the biodiversity credits market using Web 3.0 as the foundation for integration, efficiency and scale. This issue paper provides insights on how this can be achieved.

Standard setters

This issue paper will incorporate the perspectives and extended experience of key standard setters in the carbon market, along with early work relating to biodiversity credits, to co-design a framework for the biodiversity credits market. Particular attention is given to ways that BCA could best facilitate the development of oversight structures and mechanisms. (Date to be determined)

Creating guardrails

Value can only be known if it is measured according to a standard framework. Will some biodiversity credits be worth more than others? How can they be ranked? What set of parameters and criteria are required to calculate the just value of projects that restore or conserve biodiversity? BCA will provide valuable guidance for methodologists and standard setters by answering these questions. This issue paper is BCA’s first step towards the development of guardrails for the biodiversity credit market.

BCA’s 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 voluntary biodiversity credit (VBC) 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