The UN-backed Biodiversity Credit Alliance (BCA) expects to release the first results of its work within the next three months, with a glossary of terms, demand side concepts, and the inclusion of Indigenous peoples and local communities among the first issues to be tackled by the group.

Launched at COP15 UN biodiversity talks in Montreal in December, the BCA was founded by some 20 project and methodology developers looking to advance the fledgling market for voluntary biodiversity credit trading.

Those founders still make up the group’s key taskforce, but since then BCA has established a forum that acts as an advisory body with some 100 participants across various industries and research organisations.

Having organised its initial work around five dedicated working groups, the outcome of that work will start being released over summer, according to Johan Maree, co-founder of developers ValueNature and acting coordinator of BCA.

The first document to be released will be a set of definitions aiming to establish how to define biodiversity credits and potential categories, and in the extension of that, how the credits stack up against other biodiversity units of gain as well as against carbon credits, Maree told Carbon Pulse.

“It will be a glossary of terms to ensure we all speak the same language,” he said.

While that might seem banal, the market is at a stage where some early movers are already issuing their own credits in parallel with fundamental discussions taking place on the basic principles that should guide the market.

While they are all looking into the biodiversity market, stakeholders from various backgrounds will likely have in mind different definitions of those credits, be they a farmer in Australia looking to reap the benefits of the government’s planned nature repair market, a Scandinavian banker trying to meet their ESG targets, or a local community group in the Caribbean exploring opportunities as authorities weigh new marine protected areas.

“This is the first venture to create proper parameters,” Maree said, emphasising that BCA is building on work that has already been done.

THE DEMAND CONUNDRUM

Also in front line of BCA’s work is issuing a paper on demand side issues.

As much interest as there is in this new market, nobody quite knows how it can be scaled up to the degree needed for it to make a significant dent in the annual $700-billion biodiversity funding shortage, at least not without involving offsetting, which would like put off many potential market participants.

“We have a demand side working group that is coming up with initial concepts on demand that will be tested through a survey which is being finalised,” Maree told Carbon Pulse.

The World Business Council on Sustainable Development (WBCSD) will help distribute the BCA demand survey among its membership that includes many large global companies, with the group hoping that the responses can provide some answers and clarity around the expectations that exist.

Initial demand is thought to come from businesses facing increasing regulatory and consumer pressure to report on their risks and dependencies related to nature and to set targets – either voluntarily or as part of government efforts to meet their 30×30 targets under the GBF.

It remains an open question, however, whether such demand will be sufficient to scale the market, and if much of that demand can also be met through carbon projects with biodiversity benefits as a co-benefit.

Meanwhile, the third and final output BCA expects to have ready within the next three months is the results of a specialist panel that has been considering how the market can ensure that Indigenous peoples and local communities (IPLCs) will be an integrated part of the market.

LEADING ROLE

Some observers have commented that BCA has the potential to play the same role in the biodiversity market as the Integrity Council for the Voluntary Carbon Market (ICVCM) is playing in carbon.

Maree told Carbon Pulse that the alliance is having constant discussions on fundamental issues such as offsetting, secondary market trading, metrics, and so on, but that it is unlikely that the group will come out and take positions on all those issues, some of which are highly controversial.

Even so, the BCA realises the biodiversity market needs an oversight body, and the group is working with carbon market groups such as the ICVCM, business association ICROA, and others, he said, as it wants to help create transparency as well as confidence in the market.

His own company, ValueNature, is involved in developing projects with an eye to generating biodiversity credits in Zambia, Uganda, and Colombia, hoping to see the first issuance within a year from methodologies it has mostly developed itself.

“We are project developers because we want to show that the market can work. But what we are really interested is the further development of the market ecosystem,” said Maree.

That might be helped on by the work of BCA’s last two working groups, which will likely need a bit more time before they can conclude.

One of those focuses on developing a peer review mechanism, seeking to enable the biodiversity market to review methodologies. As part of that work it is engaging with carbon standards.

The last working group is investigating the potential for using technologies to support the market, for example by applying digital MRV or tokenising credits.

CLOUT?

It is uncertain exactly how influential BCA will be in developing the biodiversity market, though it helps that the alliance has been backed by the UNDP and UNEP, which are paying for a full-time coordinator.

Bangkok-based Manesh Lacoul stepping into that role in two weeks, relieving Maree from his temporary position.

The most active project developers and methodology organisations are involved, which suggests the group will be instrumental in setting early parameters that will shape the market going forward.

However, some of that influence might be diluted over time if more governments follow Australia’s example and decide to go ahead and draw up rules and regulations for their own domestic markets.

The trend in the adjacent carbon market is that governments that are now drawing up guidelines for domestic voluntary carbon trading choose to team up with and learn from global organisations and standards – like Thailand and Singapore have done with Verra and the Gold Standard – rather than compete with or simply ignore them.

The next couple of years will show whether nature markets are headed in that same direction, but in the meantime BCA is committed to playing the role it has set out for itself.

“We want to help support the development of the market … It’s prudent for us to create [guidance] as the market develops its structure,” Johan Maree told Carbon Pulse.

By Stian Reklev – stian@carbon-pulse.com

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