Indigenous Peoples and local communities need to be at the heart of developing an effective and equitable biodiversity market due to the key role they play as stewards of biodiversity-rich land, while the introduction of a credit price floor could help ensure an equitable approach here, said speakers from the International Advisory Panel on Biodiversity Credits at COP28 today.

Indigenous Peoples (IPs) should play an integral role in the governance of the fledgling biodiversity market worldwide, given that they play an “outsized role to the contribution and preservation of biological diversity”, with the vast majority of biodiversity found in indigenous territories, said Jennifer Tauli Corpuz, managing director for policy at the Nia Tero Foundation, an NGO that advocates for a guardianship role for IPs in policy development.

Biodiversity market development should consciously include IPs in certification bodies and when deciding what constitutes high-integrity biodiversity credits, Corpuz told the panel audience during a COP28 side event hosted at the UK Pavilion Monday.

In reference to deals in the voluntary carbon market, where IPs are often viewed as co-beneficiaries of the carbon projects in question, Corpuz said that IPs “should be called partners, instead of just beneficiaries … so recognising our role as stewards of nature in any deal regarding biodiversity”.

Simon Zadek, executive director at NatureFinance, agreed with ensuring that biodiversity markets are framed with a public purpose in mind, to ensure they scale and operate effectively.

For equitable nature markets to develop, there needs to be complete transparency between supply, or the stewards of nature, and credit buyers, he added.

“If you have stewards of nature, not knowing who they’re negotiating with, not knowing that the trade is going to be flipped two days later for a higher priced deal. If there’s not openness at that level of transparency and more symmetrical negotiation capabilities, it’s very hard to imagine that one’s going to end up with equitable markets … And if you don’t have equitable markets, then nature stewards will not be able to do their job,” Zadek explained.

Implementing a price floor could be a way to ensure an equitable market develops, he suggested.

“Do we need to install rules of the market as we have in other markets, like pharmaceutical markets and others, where prices actually are, at least in part administered on a daily basis?” in order to ensure the price paid for a biodiversity credit is sufficient to sustain the natural capital and provide a development dividend, he proposed.

Biodiversity market development needs to be done creatively, thinking about “ways in which indigenous leaders of communities are not simply the beneficiaries of that governance, but part of the governance”, he added.

COHERENT MEASURE

It’s important that biodiversity standards come up with a way to measure biodiversity coherently, taking into consideration diverse factors such as species differentiation and species numbers, but also the general habitat health, and habitat connectivity, said Pauline Nantongo Kalunda, executive director of Ecotrust, a non-profit that develops projects around people and the environment.

She made reference to Ecotrust projects that generate both biodiversity and carbon credits due to the additional investment required to engage with biodiversity stakeholders, experts, and conduct additional monitoring on top of carbon sequestration.

The level of investment is much higher, so that is used as the rational as to why there should be a biodiversity credit, as well as a carbon credit, she explained.

DEFORESTATION IN INDIA

Also on the panel, a representative from IORA Ecological Solutions in India spoke about the country’s compensatory deforestation policy, in which if you have to develop a piece of land with ecological utility or forest, you measure all the ecosystem services there, and then you compensate by paying for the restoration of double the area of that land.

In some ways, this policy “mimics the idea of a biodiversity offset”, although there are shortcomings in that it doesn’t exactly measure or offset the precise loss of biodiversity, and the distribution of ecosystems varies significantly from one area of land to another, particularly in the Tropics, he said.

India’s recent launch of its green credit scheme at COP28 is a “very interesting mechanism in which landowners who plant trees on the land will be compensated by payments purely based on the survival of the trees”, and represents a move by the government away from a purely carbon matrix and towards more of an ecosystem-based approach, said the spokesperson.

LOCAL TO GLOBAL

The premise of biodiversity as a particularly local-level issue was also raised during the panel, with NatureFinance’s Zadek pointing out that “local to local, no net loss types of compliance markets” naturally work better, although to scale the market a global approach is needed.

“The challenge is cross-border fund flows, is there any way that we can create the equivalence of local to local, no net loss market, that involve funds moving across borders, particularly from wealthier countries to nature-rich countries?” because that is needed to achieve scale, he told the audience.

Purely national jurisdictional-scale policy models would be insufficient to achieve the scale of change required, Zadek added.

By Bryony Collins in Dubai – bryony@carbon-pulse.com