Indigenous Peoples should “explicitly reject” proposals for the biodiversity credit market as they will promote offsetting, a think tank has said.

Brussels-based Green Finance Observatory (GFO), an environmental finance-focused organisation, has highlighted risks for Indigenous Peoples, in efforts to shape the market, in a document published this week.

The document was published in response to the draft recommendations on biodiversity credits released last month by the Community Advisory Panel (CAP) of the UN-backed Biodiversity Credit Alliance (BCA).

The recommendations aimed to bring attention to the rights of Indigenous Peoples and local communities in the emerging market. CAP says it is a self-governed body of over 40 Indigenous Peoples and local communities members from across the world.

However, Indigenous Peoples have an “extremely” low chance to weigh significantly in CAP’s process, since the alliance “is mostly comprised of carbon and biodiversity issuers, lobbyists, and other promoters, whose economic interest is to see these markets be created at any cost”, GFO claimed.

“We want to highlight that the BCA is an extremely imbalanced forum, that the International Institute for Environment and Development (IIED), who provides the secretariat of the CAP and the UN itself, are not neutral arbiters, being long-time promoters of biodiversity markets,” GFO said.

“We fully support the desire of Indigenous Peoples and local communities to be involved in this crucial debate that will impact their future.”

Speaking to Carbon Pulse, Manesh Lacoul, global coordinator of the BCA, responded to the GFO comments by stressing that the BCA does not promote any views about the pace of creation of the market, nor does it dictate any particular agenda.

“BCA is a group of scientists, academics, conservation practitioners, and standard setters, with direct links to Indigenous Peoples and local communities on the CAP, and facilitated by the UNDP and UNEP FI,” he said.

“The agencies involved have indicated that if markets cannot be designed in ways that affirm the rights of Indigenous Peoples and local communities, and reward them for their role as nature’s stewards, credits should not be pursued as a mechanism.”

STATE OF PLAY

In its feedback, GFO advised Indigenous Peoples to “walk out” of the process if it contradicts their preconditions, since their rejection would lead governments to review their conservation policies.

“We disagree with the statement that biodiversity credits will be a reality, as there is still a long way to get there, as academic research has amply demonstrated their intractable environmental issues, and public opinions have not had their say yet,” GFO said.

“Assuming that these markets will be a reality is thus starting from an incorrect and weak negotiation point.”

Lacoul told Carbon Pulse: “Biodiversity credits are included in the Kunming-Montreal Global Biodiversity Framework via target 19 (d), and as such is not an opinion but indeed a reality,”

“We understand they are not a panacea, but merely one of the tools available for sustainably financing the biodiversity conservation in an equitable and inclusive manner,” Lacoul said.

Anna Ducros, a researcher on the inclusive green economy team at IIED – the agency which is helping gather feedback for CAP – told Carbon Pulse that biodiversity credits are instead a proposal that is gaining traction.

“Obviously, there is still much work to be done, but it’s clear there is momentum behind the concept of biodiversity credits. It’s therefore crucial that Indigenous People and local communities can meaningfully influence the debate,” Ducros said.

CREDITS AND OFFSETS

CAP’s recommendations rejected biodiversity offsetting, a concept deemed as a means to justify the destruction of nature by creating uplift elsewhere. Biodiversity credits are often said to differ from offsets, by not implying harm to nature in another location while boosting ecosystems.

GFO claimed that “biodiversity credits and offsets are identical”, stating that any contrary claim can be considered “politically naive”.

“The IIED thus acknowledges that [biodiversity credits and offsets] are identical and that the only difference is use. Yet, funding investments with a net biodiversity gain implies, by definition, some offsetting, as ‘net’ means the result between biodiversity gains and losses.”

In response to this claim, IIED said it does not consider biodiversity offsets and credits to be the same thing, and that it actively advocates against offsets, because they would undermine the potential benefits of the scheme.

“We note that creating financial assets, such as biodiversity credits, will indeed incentivise land speculation, due to the enormous quantities of land required to offset the destruction of rich industrialised countries, and the fact that they have every intention to offset as much as possible abroad where land is cheaper rather than at home,” GFO’s text outlined.

The think tank also criticised a separate 2023 BCA report that claimed biodiversity credits could provide a non-offset driven opportunity for positive biodiversity outcomes, especially when it is hard to define a direct connection between a company and specific impacts in the value chain.

“We find the claim that compensating for damages is different from offsetting to be preposterous, and to indicate that the BCA intends to promote biodiversity offsetting,” experts from GFO claimed.

According to Lacoul, the BCA does not have a position or opinion on the use of biodiversity credits as offsets.

“The issue of offsetting is going to be a subject of meticulous analysis under one of the upcoming working groups, which will be open for Indigenous Peoples and local communities’ participation as any other working group,” he said.

“We’re aware there has been some discussion about whether biodiversity credits could be used for offsetting. IIED is not advocating for offsetting as we believe it would be detrimental to the overall objective of increasing finance for nature and local people,” Ducros concluded, noting that IIED’s approach is “guided by feedback from the CAP”.

By Giada Ferraglioni – giada@carbon-pulse.com

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