{"id":43703,"date":"2024-10-10T16:59:45","date_gmt":"2024-10-10T14:59:45","guid":{"rendered":"https:\/\/navdanyainternational.org\/?post_type=post_publications&p=43703"},"modified":"2024-10-31T11:12:43","modified_gmt":"2024-10-31T09:12:43","slug":"fact-sheet-understanding-biodiversity-credits","status":"publish","type":"post_publications","link":"https:\/\/navdanyainternational.org\/ca\/publications\/fact-sheet-understanding-biodiversity-credits\/","title":{"rendered":"Understanding Biodiversity Credits – A Factsheet"},"content":{"rendered":"

Download pdf<\/strong><\/a><\/p>\n

\"\"<\/a>This factsheet was created with the intention to support:<\/em><\/p>\n

Organizations, researchers, scholars, activists, communities and individuals<\/em><\/p>\n

To learn, share and act on the threat that biodiversity credits pose by understanding the functioning of this financial mechanism and its emerging players.<\/em><\/p>\n

To understand the potential risks and dangers of biodiversity credits implemented without adequate regulation, development, impartial monitoring and community participation.<\/em><\/p>\n

A more detailed analysis on this is available in our report called \u201cBiodiversity is Life, not an Asset Class: Debunking biodiversity credits, the next wave of Bio Imperialism<\/a>\u201d.<\/em><\/p>\n

To find out more, join the campaign “Biodiversity is Life, not an Asset Class<\/a>“.<\/em><\/p>\n

Also read: 50 Shades of Green: the New Markets on Nature Explained to my Grandmother<\/em><\/a> – Comic Book by Frederic Hache, Green finance Observatory<\/p>\n

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Understanding Biodiversity Credits \u2013 A Factsheet<\/strong><\/h2>\n

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The world is facing a serious ecological crisis. Global biodiversity has been eroded by 69% since 1970, with tens of thousands of populations of wildlife at risk of<\/u><\/a> extinction across the planet.<\/u><\/a> The loss of biodiversity is continuing unabated despite the fact that, at an international level, the urgency of regenerating and<\/u><\/a> protecting it has long been recognized<\/u><\/a>.<\/p>\n

To counteract the erosion of biodiversity, the private financial sector has been moving for several decades, proposing various financial schemes to minimize the damage caused by global industry on the planet’s ecosystems.<\/p>\n

The carbon market is a famous example, born in 1977 from the Kyoto Protocol and widely criticized for its<\/u><\/a> inability to produce tangible results and lack of<\/u><\/a> effective control<\/u><\/a>. In recent years, we are observing a new financial mechanism, aimed at \u201cprotecting\u201d the planet.<\/p>\n

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What is financialisation of nature?<\/strong><\/h4>\n

Financialisation of nature refers to the process of incorporating natural ecosystems and biodiversity into financial markets and economic systems.<\/p>\n

This involves assigning economic value to natural resources and ecosystem services, and then trading or managing these values through financial instruments.<\/p>\n

Some of these market-based instruments include Biodiversity Credits<\/u><\/a>, Carbon Credits<\/u><\/a>, Water Rights<\/u><\/a> and Trading<\/u><\/a>, environmental impact bonds<\/u><\/a>, green<\/u><\/a> bonds<\/u><\/a>, impact investing<\/u><\/a>, and Natural Asset<\/u><\/a> Companies<\/u><\/a>. Financialising nature reduces complex ecological systems to mere economic units, overlooking the intrinsic value of ecosystems and the interconnectedness of species.<\/p>\n

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Why is it important right now to know about financialisation of nature?<\/strong><\/h4>\n

The United Nations Biodiversity Conference of the Parties (COP16) to the UN Convention on Biological Diversity (CBD) is from October 21 to November 1, 2024, in Cali, Colombia. This gathering is a crucial moment of decision making for our future when the world is facing a grave biodiversity crisis, with global<\/u><\/a> biodiversity having declined across the<\/u> globe<\/u><\/a>.<\/p>\n

Financialisation of nature continues the harmful legacy of bio-imperialism with its commodification and extraction, which is at the root of this biodiversity crisis. It monetises this crisis to help the market players generate profits.<\/p>\n

The World Economic Forum<\/u><\/a> foresees that just the biodiversity credits market alone might hit $2 billion by the decade’s close and by 2050, it could touch nearly $70 billion.<\/p>\n

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What are biodiversity credits and how do they actually work?<\/strong><\/h4>\n

Biodiversity credits represent the latest financial tool to commodify natural resources and ecosystems. They are a scheme aimed at financing activities for the \u201cprotection\u201d and \u201cconservation\u201d of biodiversity through the creation<\/u>, sale and exchange of<\/u><\/a> biodiversity ‘units’<\/u><\/a>.<\/p>\n

Biodiversity credits are positioned by finance companies as incentives to fund \u201cconservation\u201d efforts by placing a monetary value on preserving or<\/u><\/a> enhancing biodiversity .<\/u><\/a><\/p>\n

In simplest terms, they are like a reward system for protecting nature where each credit or reward signifies that the landowner or organization \u201cprotected\u201d or \u201crestored\u201d a natural habitat. For example, if a company helps to restore a forest, they earn biodiversity credits.<\/p>\n

The reason financial companies are interested in these is because these credits can be sold or traded. Companies that need to show their environmental impact buy these credits to show they are \u201csupporting\u201d conservation efforts.<\/p>\n