Definition of biodiversity credits:
“The current working definition of a biodiversity credit is a certificate that represents a measured and evidence-based unit of positive biodiversity outcome that is durable and additional to what otherwise would have occurred.”
Summary
The paper employs a market review and survey approach to investigate the sources and motivations behind both mandatory and voluntary biodiversity credit markets.
Result
The paper categorizes potential credit buyers into four groups: businesses, financial institutions, governments, and philanthropists. It conducts a market review and utilizes survey results to elucidate the primary reasons why potential buyers are interested in biodiversity credits, citing the top motivations of buying as 1. Shareholder and stakeholder pressure; 2 Anticipation of tightened regulation; 3. Compliance with existing requirements; 4. Operational risk mitigation & 5. Pursuit of new investment opportunities.
Survey results show that key internal and external factors influencing buyers’ motivations include quality and integrity, compliance with supra-national and national financial and environmental regulations related to disclosures, and footprint compensation.
Method
The paper employs market and literature reviews along with potential buyer surveys.
Limitations
While the identified drivers of demand may explain demand well, there could be discrepancies with reality.
Businesses may be interested in biodiversity credits for risk avoidance or opportunity, but they are encouraged to mitigate biodiversity pressure through avoidance, reduction, and restoration before resorting to offset methods.
Relevance
The discussion pertains to both regulated and voluntary biodiversity credits in the global setting.
