2023 Natural Capital research round up
Here are some key takeaways
Voluntary carbon projects are often nature-based and impacts on biodiversity are an important consideration for investors.
Measurement and verification of those impacts is challenging and requires good definitions, together with the use of remotely sensed and ground based data collection.
New technologies offer promise in low cost, high quality monitoring but rigorous methodologies need to be developed.
New approaches to conservation, such as rewilding, can potentially enable ecological restoration at scale but the role of carbon markets in financing needs further exploration.
Recent reports of record breaking global ocean temperatures are perhaps the starkest warning of the danger that climate change brings, with devastating implications for marine ecosystems already being observed. This underlines the need to address biodiversity losses as well as greenhouse gas emissions and the role that the Voluntary Carbon Market (VCM) can play in doing so. Our research on natural capital solutions has been exploring some of the issues involved with making this work, with transparency the key element in a high integrity system.
In The route to high integrity biodiversity markets, we discussed how the complexity of measuring biodiversity presents a significant challenge. Whilst there is some evidence that corporates are taking an interest in acting to restore natural ecosystems, the lack of standard approaches to gauging impacts makes it difficult to assess return on investment. Even defining what is meant by the term biodiversity is far from straightforward: unlike the universal fungibility of carbon, the spatially distributed uniqueness of genetic diversity calls for a sophisticated, as yet undefined approach.
We explored this theme further in Deep dive: biodiversity metrics. Whereas the measurement of carbon provides the metric by which emissions and sequestration can be compared and contrasted, measurements of biodiversity provide for the derivation of a wide range of metrics, the relative merits of which are still actively debated by ecologists. An added complication in the context of project claims is the need to demonstrate the additional impacts of the project’s activities. This requires the measurement of biodiversity outside the project area, which increases the effort (and costs) required to provide verifiable, attributable outcomes.
We illustrated some of this complexity with a real world example. In Forest definitions matter: an Indonesia and Papua New Guinea case study, we showed how two neighbouring countries’ definitions of what constitutes forest leads to markedly different estimates of forest cover and change. Standardised definitions will become increasingly important in the context of Internationally Traded Mitigation Options (ITMOs), a central plank in the United Nations’ climate strategy.
Exciting new technologies can potentially help to reduce the cost overhead in measuring and tracking changes in biodiversity. BeZero’s Natural Capital team is working in partnership with academics to evaluate the use of environmental DNA (eDNA) to detect species of conservation concern and wider ecosystem health. The project at Kibale National Park, Uganda, is outlined in our recent report Trialling eDNA for biodiversity measurement.
New approaches to conservation also hold promise for delivering large scale ecological restoration. In How wild can the voluntary carbon market get?, we took a look at how the concept of rewilding has the potential to help both sequester carbon and protect biodiversity. The self-willed nature of rewilding means that outcomes are perhaps less certain than more prescriptive approaches, such as afforestation, but this can be overcome using more flexible methods of measuring carbon stocks and flows.
Over the next few months we’ll be delving into these issues in more depth. The first challenge is to understand how biodiversity claims being made as project co-benefits on the VCM can be independently verified. This could be through the use of globally available data and models, from both ground-based and remotely-sensed sources. The critical element is transparency: investors seem keen to invest but need to know that they are supporting high quality, high integrity projects.
Many of the principles that we apply in rating the carbon claims of projects are equally valid when applied to biodiversity. Qualities such as additionality, leakage and over-crediting are just as important in assessing project impacts on wildlife, even if they might be harder to pin down.