Dangerous thinking?

The Linnean Society of London was named after the Swedish naturalist Carl Linnaeus, who devised the system by which we classify the world’s species into kingdoms, phyla, classes, orders, families, genera and finally species. The meeting rooms in its grand Burlington House headquarters were the venue for Alfred Russell Wallace and Charles Darwin when, in 1858, they jointly unveiled their theory of evolution by natural selection. Under the prevailing religious sensitivities of the time, some perceived the idea as heretical, which was why it took Darwin some twenty years to finally put it in the public domain.

So it was a fitting place this week to be discussing another dangerous idea, that of biodiversity credits. Since Wallace and Darwin, more since Linnaeus, the world has lost vast numbers of species. Biodiversity credits are an attempt to arrest the decline in wildlife by commoditising it, creating units that can be bought by investors – mainly corporates – to help them achieve their “nature positive” ambitions.

The panel, curated by Joe Huddart of Ecology Calling, presented a remarkably united view from a diverse set of perspectives. The session chair, Francis Mann, is Senior Government Affairs Manager at renewables company Lightsource bp. The scene for the evening was set in a plenary presentation by Aleksandra Holmlund, CEO of Qarlbo Biodiversity, who launched Sweden’s first forestry-based ”biocredit” initiative. The other panellists, Joe Bull (University of Oxford), Pippa Howard (Naturemetrics), James Pilkington (Zoological Society of London), Kaija Barisa (Blue Marine Foundation) and myself, were all given the floor for a few minutes to outline our views on this controversial subject.

Comparisons were frequently drawn to the world of carbon markets. Lessons learned (often the hard way) must be heeded in developing biodiversity credit markets if they are to be a way to avert a global ecological collapse. Ratings need to be an integral part of the mix, of course, to achieve sufficient transparency to enable investors to tell the good from the not so good.

But nature’s complexity raises two major difficulties compared to carbon. First is what we need to measure, and how we measure it. No one has yet successfully formulated a universal nature metric: as a result most projects use a proprietary blend of metrics to describe the focus of interest.

This raises the second difficulty, nature’s lack of fungibility. No two square metres of the Earth’s surface contain an identical mix of DNA, meaning that they are inherently incomparable. This lack of equivalence is at the heart of the most controversial aspect of biodiversity credits, whether they can be used to offset biodiversity loss.

There is an increasingly solidified view that biodiversity credits are not offsets: that is, a company that destroys nature as part of its legitimate business operations should not be enabled to buy nature credits to mitigate the damage. Much as carbon offsets have been maligned in the past, the fear is that biodiversity offsetting creates a “licence to trash”. Just as greenwashing accusations have plagued carbon markets, so could they undermine confidence in nature markets.

Curiously, the UK government’s own biodiversity credit scheme, Biodiversity Net Gain, is essentially an offset market. Housing developers must measure how much damage will be done, handily converted into a single “nature metric”. Following a mitigation hierarchy, they must then purchase biodiversity credits that have been created by landowners elsewhere specifically for that purpose. Under current rules the number of credits bought must include an extra 10% over the number of biodiversity units lost to the development. Hence net gain.

Several questions from the audience focused on the distinction between biodiversity credits and offsets. There is more to consider than what we call them – the distinction might be critical to scaling, particularly in relation to the development of secondary markets.

For BeZero, the main challenge in rating nature projects rests in finding independent measures that either support or refute the various claims made by project developers. We can’t replicate all of their in situ measures, so are identifying proxies that we can assess remotely, through satellite monitoring and species range data. We’re also exploring novel uses of environmental DNA as an indicator of overall ecosystem health. Watch this space for future announcements!

There is an irony in the fact that the single greatest idea in the understanding of life was explained to the world in a single evening, while we didn’t get close to resolving the issues facing biodiversity markets in our panel session. But if markets are to be a pathway to the restoration of global biodiversity, solutions need to be found before time runs out. Today, on the International Day for Biodiversity, the question has to be whether nature markets can #BePartOfThePlan.