The push for a ‘nature positive economy’ through initiatives such as biodiversity credit trading risks is doomed to be an environmental failure and should be stopped, according to an EU-based green finance group.
WWF and the World Economic Forum are among major organisations pressing delegates at the ongoing biodiversity COP15 in Montreal to ensure major corporations and financials will be forced to disclose their impact on nature by 2030.
Over time this is intended to drive increasing private-sector engagement in halting ecosystem loss, including investing in projects that may yield biodiversity credits that companies can trade.
However, Frederic Hache, founder and managing director of Paris-based non-profit Green Finance Observatory, warned that this “must not be allowed in the Post-2020 Global Biodiversity Framework nor at EU-level”.
“Behind this innocuous sounding name lies a push to ‘financialise’ the destruction of biodiversity via meaningless monetary valuations of ecosystem services and biodiversity offsetting,” he told Carbon Pulse.
Last month, Green Finance Observatory published an open letter with over 110 signatories from academia and civil society rejecting the “nature positive economy”.
OFFSETTING OR NOT?
Most proponents backing the use of a voluntary biodiversity market to help close the annual $700 billion funding gap reject the use of such credits for offsetting purposes.
However, Hache referred to official answers from the EU Commission to the European Parliament earlier this year confirming that the definition of nature-based solutions includes biodiversity offsetting.
“There is no doubt that biodiversity offsetting is coming to the EU soon, as it is in the UK and the UN, most probably under the new claim that biocredits are similar to offsets but not to be used for offsetting,” he told Carbon Pulse.
In a LinkedIn post this week, he said that offsetting is the only use case for scaling biodiversity credits, and that many of those pushing for the market to develop think it will not work.
“[O]ff the record most financiers [and] environmental and policy experts agree that they will most probably be an environmental failure and a political success, just like carbon offsets, i.e., they will buy time to continue maximising growth,” he wrote.
As part of its new biodiversity strategy, the European Commission adopted a proposal for a Nature Restoration Law last June.
This was designed to help achieve the following binding targets:
- restore habitats and species protected by the EU nature legislation;
- reverse the decline of pollinators by 2030;
- no net loss of green urban spaces by 2030 and a minimum of 10% tree canopy cover in European cities;
- improved biodiversity on farmland e.g. for grassland butterflies, farmland birds, high-diversity landscape features;
- restore drained peatlands;
- healthier forests with improved biodiversity;
- at least 25,000 km free-flowing rivers by 2030;
- restore seagrasses and sea bottoms.
A fact sheet presenting the law pointed out that “every 1 euro invested into nature restoration adds €8 to €38 in benefits”.
BIODIVERSITY MARKET
At the same time, a study released on Monday suggested that biodiversity credits could help break the nature finance logjam as long as they can avoid some of the pitfalls that have left carbon offsets open to greenwashing accusations.
The report, by the UNDP and UK-based think-tank IIED, said that “an increase in sales might naturally occur as the methodologies are more widely understood and tested”.
“There remains value in ensuring biocredit schemes are transparent and clearly explained by various stakeholders to promote trust-building in the biocredits market,” it concluded.
With the Post-2020 Global Biodiversity Framework, the UN Convention on Biological Diversity hopes to protect at least 30% of land and sea areas globally by 2030 “through effective, equitably managed, ecologically representative and well-connected systems of protected areas”.
Conservationists also aimed at “redirecting, repurposing, reforming, or eliminating incentives harmful for biodiversity, in a just and equitable way, reducing them by at least $500 billion per year”.
On the other hand, the convention’s draft proposal ahead of COP15 called for a “$200 billion increase in international financial flows from all sources to developing countries”.
A 2017 study, focused on biodiversity offsets and compensation mechanisms in Europe, showed that “most compensatory mitigation activity to date has been driven by one-off offsets, which has accounted for more than 90% of total land area conserved as of 2015”.
“Compared to 2017, when the topic wasn’t mainstream, we now have a mature political context despite the current energy crisis, so there are many drivers for developing an offsetting market,” said Alessandro Leonardi, researcher at the University of Padova and co-founder of consultancy Etifor.
“Slowly, a framework for the private sector is making its appearance.”
The Science-Based Targets for Nature (SBTN) aims to define how companies can assess, prioritise, measure, address, and track their impacts and dependencies on nature. Whenever an impact on biodiversity is inevitable, the targets establish rules for creating or restoring a habitat of the same size.
According to Fiore Longo, campaigner for the indigenous movement Survival International, this agenda has no scientifically proven beneficial effects and may even cause harm.
“Terms like ‘restoration’ and ‘rewilding’ can have injustice embedded within it, because they presume that whatever exists in situ is a problem,” she told Carbon Pulse.
“I think that we need to be extremely careful with concepts like ‘rewilding’ or ‘restoring’, which are different concepts but related,” she added.
“Seeing as most of Earth’s ecosystems have long been modified by humans, the choice as to what condition, from what era, the ecosystem should be restored or rewilded to, is highly contentious, and arbitrary.”
By Emanuela Barbiroglio – emanuela@carbon-pulse.com
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