The G20 should support a credible market for biodiversity credits by taking measures to improve their uptake, the UN Environment Programme Finance Initiative (UNEP FI) has said.
The influential Group of 20 (G20) regions can do this by supporting the demand- and supply-side integrity of nature-based solutions, UNEP FI said in one of three nature positive transition documents.
Governments should “issue guidance and establish science-based market frameworks aligned with national and international policy and regulatory agendas”, focused on biodiversity credits, it said.
Linked to this, they must “support capacity building for Indigenous Peoples and local communities for project design and leadership, ensuring adequate safeguards, and encouraging tailored pilot projects”.
The recommendations came in one of three documents on achieving a nature positive economy, aimed at the G20 Sustainable Finance Working Group, alongside others on reporting and the just transition.
UNEP’s annual State of Nature report, last published in December, informed the recommendations. This report found global public and private funding that has a detrimental impact on nature stands at a massive $7 trillion per year.
“The G20 should take a leading role in promoting global environmental agendas, such as the Kunming Montreal Global Biodiversity Framework (GBF),” UNEP said.
“Private finance is critical for scaling nature-based solutions by providing the necessary capital to implement and expand projects that restore or conserve ecosystems.”
LEARN FROM CARBON
G20 countries should learn from the carbon market’s experience when developing the biodiversity credits market. This should avoid problems like low-quality credits, weak demand, and negative impacts, UNEP FI said.
Governments must ensure that biodiversity markets are aligned with best practice in view of emerging voluntary biodiversity schemes such as England’s biodiversity net gain scheme and Australia’s Nature Repair Market, it said.
“Finance ministers should guide the development of a high-integrity biodiversity credit market by supporting and building a framework of robust, science-based principles, encouraging public review and development of jurisdictional schemes, and providing guidance.”
Clear systems should be in place to ensure Indigenous Peoples and local communities are the main beneficiaries of biodiversity credit projects.
A debate on how biodiversity credits affect Indigenous Peoples has surged over the last year. In April, a think tank said they should “explicitly reject” related proposals as they would promote offsetting, while in June, a Canadian Indigenous-led organisation said they wanted to explore the market.
Biodiversity credits contribute to National Biodiversity Strategies and Action Plans, while linking to the GBF, the report said.
G20 countries are advancing their efforts to scale the ‘bioeconomy’ as a means to promote sustainable models that foster biodiversity conservation, a study said in May.
However, some G20 regulators have decided not to work on nature-related financial risks due to data challenges, another report said in July.
By Thomas Cox – t.cox@carbon-pulse.com
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