Plan Vivo developing biodiversity credit pricing guidance

Published 17:35 on October 5, 2023  /  Last updated at 17:35 on October 5, 2023  / Thomas Cox /  Biodiversity, International

Plan Vivo aims to launch guidance on the pricing of biodiversity credits within a year, Carbon Pulse has learned.

Plan Vivo aims to launch guidance on the pricing of biodiversity credits within a year, Carbon Pulse has learned.

The nature and carbon standard-setter has been surveying market players on how much they would be willing to pay for biodiversity credits, according to Keith Bohannon, CEO at the organisation.

“It’s going to be guidance rather than a procedure. In the absence of having all the frameworks in place and established markets, it will give a place to start,” he told Carbon Pulse.

Plan Vivo’s second consultation on its PV Nature Methodology for generating biodiversity certificates closed last month.

The method used a ‘percentage change of biodiversity per hectare’ approach for measuring improvements in biodiversity. Each unit of biodiversity credit would link to this percentage change, Bohannon said.

Initial scoping showed prices would be “not far of the range we see in voluntary carbon markets, around $20” per unit, he said.

The price of the credit would need to cover the full conservation costs of the project, he said.

“It’s going to take at least two years to issue any credits for a project – there’s going to be a cost to do all that activity.”

“We feel like we need to advise projects on how to price the credits and a minimum level on the cost of doing the work.”

The price of each credit will vary between projects due to their differing conservation costs, he said. These will be influenced by factors such as geography, size, type of conservation activities, and involvement of local communities and Indigenous Peoples.

A higher price would not necessarily indicate a “better” credit for biodiversity, due to the complexity of nature, he said.

To overcome this obstacle the pricing would need to be “fully open and transparent, which is not the way at the moment with voluntary carbon markets”, he said.

The pricing will also need to allow for flexibility as biodiversity crediting frameworks develop, he said.

Tom Stevens, head of climate and nature markets at Flora & Fauna, said basing biodiversity credit pricing on project costs could be “difficult” for the market to accept.

“We need to discuss what that really means. If the market isn’t going to accept what that means, how do we get around that? I don’t have the answer,” he told a panel at the Corporate Investments into Forestry & Biodiversity conference in London.

Zoe Balmforth, co-founder of Pivotal, said generating biodiversity and carbon credits for the same piece of land, or ‘stacking’, posed risks for pricing of biodiversity credits.

Such a practice could create a “real risk of undermining the pricing of biodiversity credits at this stage”, as stacked projects could have lower prices on the biodiversity markets, Balmforth said.

“There’ll be plenty of projects that need biodiversity credits for financing because they can’t generate carbon, maybe grassland, and then you’ve undermined the price for those,” she said.

“What we do now will have a huge impact on what comes next. It did with carbon, it will do here too.”

By Thomas Cox –

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