Canada’s pilot for enabling companies to earn government-issued certificates for conservation achievements will remain small scale, an expert has predicted.

Last month, the government said it would extend its voluntary Conservation Exchange Pilot programme to 2026 as part of an effort to engage all sectors in supporting nature.

“At the moment, it will stay small scale. This is just my gut feeling, unless they can streamline that process,” said Paige Olmsted, conservation finance specialist at Canada’s Nature Investment Hub.

Market actors are wrestling with finding the sweet spot between ecological integrity and scalability in nature, Olmsted told Carbon Pulse.

The government has erred on the side of caution on ecological integrity in the pilot, she said. “They’re learning how many people are going to go for that, and how attractive that is,” said Olmsted, who is also programme director of nature-based solutions at think tank the Smart Prosperity Institute.

The pilot aims to establish a way for government-backed certificates to incentivise corporate investment in nature.

Businesses can use the certificates to demonstrate their positive environmental impact with stakeholders, but they cannot be used for offsetting, according to the government website. The certificates will not be tradable, unlike some voluntary biodiversity credits.

The government is only looking for eight projects to register with the scheme in total. It remains unclear as to whether the Conservation Exchange Pilot, which launched in 2021, will roll out more broadly.

THE REAL TEST

Nature Investment Hub, part of Ottawa-based non-profit The Natural Step Canada, aims to drive ecosystem financing through collaboration with members across public and private sectors.

Investors, industry, and NGO members of Nature Investment Hub are enthusiastic about the pilot as it represents a potential revenue stream.

However, the first participants of the pilot are likely to be those already investing in nature, she said.

The real test will be whether companies other than the usual suspects become interested in taking part, she said. “That’s where I think you could say this has been really successful.”

Canada has vast publicly-owned intact natural landscapes that are not under threat, so it has not yet been able to offer the same large-scale ecosystem investment schemes as other countries, she said.

PUBLIC ASSURANCE

The government-backed element of the pilot should lend a layer of credibility to indicate which corporate conservation outcomes have integrity, she said.

“It’s not just an oil and gas company saying: ‘We’re doing a good thing for nature.’ It’s an oil and gas company saying: “We’ve put money here, we actually can prove that it’s had impact, and a third party has verified that.”

“The government is sort of banking on the idea that … providing that layer of assurance will cause people to want to participate.”

The pilot is credible, with the government taking care to involve the ‘right type’ of ecologist, she said. However, if the standard is too challenging then no one will want to use it, she said.

Several voluntary biodiversity certificate or credit standards have emerged over the last couple of years globally, with varying terminology for units representing nature uplift, but demand has been slow to take off.

Last month, the Canadian government released its 2030 Nature Strategy for reversing biodiversity loss, in line with the goals of the COP15 final agreement, proposing to ramp up natural capital accounting.

By Thomas Cox – t.cox@carbon-pulse.com

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