The nascent nature credits market is a key solution to the need for economic incentives to restore nature, with its viability proven by carbon, European Commission President Ursula von der Leyen said in a speech on Friday.
Revenues for those providing ecosystem services are needed as part of a rewards system necessary in the fight against nature degradation, said von der Leyen at the DLD Nature Conference in Munich.
“We can create a market for restoring our planet. It almost sounds too good to be true. But we know that, with the right standards, it can work, because we did it before. Here in Europe, we already have an incredibly effective market for carbon,” she said.
Carbon markets have been working for almost 20 years, raising €180 billion while reducing greenhouse gas emissions by almost 50%, according to the president.
“The same should apply to nature credits. We need to channel vital revenues towards all those who are providing ecosystem services,” von der Leyen said.
“Take a water company, for which the health of a spring is a vital asset. Or a fruit company that relies on the essential work of pollinators. They could use nature credits to reward local communities and farmers, who provide ‘ecosystem services’.”
“Work is already ongoing at the UN and elsewhere, to define a global standard for nature credits. This is an essential first step, to scale up this rising market. And we are working intensively with member states to develop the first pilot projects to support this process.”
The EU launched a project this year to inform debate on the voluntary use of biodiversity credits, including how they link with existing carbon credit schemes, with the goal of proposing a set of requirements.
However, an EU-commissioned survey on biodiversity credits received less than a third of the expected responses, with the consulting group responsible for the study calling in May for increased participation to finalise it before presenting the findings at this year’s COP16 UN biodiversity summit.
“Protecting nature must also be interesting from an economic point of view. And we can make that work,” said von der Leyen.
AGRICULTURE
Although the debate on agriculture has often been heated, sustainable farming is critical in incentivising nature recovery activities, von der Leyen added.
“Only if farmers can live off their land, will they invest in more sustainable practices. And only if we achieve our climate and environmental goals together, will farmers be able to continue making a living.”
“We need new financial tools to compensate farmers for the extra costs of sustainability, and compensate them for taking care of land, water, and air. It is time to reward those who serve our planet.”
Rolling farmer protests have been seen in countries across the EU throughout 2024, including Belgium, France, Spain, Italy, and Poland, over sustainability issues.
PRICE
Profiting from exploiting nature, like extracting fossil fuels or clearing forests, but not from restoring or preserving ecosystems is morally and economically flawed, von der Leyen continued.
“There is a growing awareness that intact nature does have an economic value … we have got to ‘get nature on the balance sheet’. And this is beginning to happen. Nature is starting to feature in our companies’ business plans.”
“Here at DLD [conference], you are showcasing that a different future is not only possible. Some are using artificial intelligence to listen to animals, and learn from them about the health of an ecosystem. You are basically turning the anxiety for the future into anticipation.”
The strain on nature is approaching a critical threshold, with the combined effects of climate change and environmental degradation causing severe consequences, she said.
“My grandchildren may no longer hear crickets on a summer night. Instead, they might face new diseases, carried across continents by invasive mosquitos.”
While she backed the concept of nature credits, von der Leyen did not provide specifics on whether she had a mandatory or voluntary market in mind.
Amid increasing awareness of the global nature and biodiversity crisis, a wide range of market-based mechanisms are emerging as part of efforts to address the issue.
England earlier this year launched its Biodiversity Net Gain scheme, which requires project developers to ensure there is an at least 10% net gain in biodiversity at project sites.
Australia, meanwhile, is designing a Nature Repair Market that will provide a government-operated framework to allow companies to develop voluntary biodiversity credits that will ultimately help the country meet its targets under the Global Biodiversity Framework.
The British and French governments are also leading an initiative to develop a global framework for voluntary credits, with fundamentals and principles that can be applied by anyone. A draft is set to be presented at COP16 in Cali next month.
By Thomas Cox – t.cox@carbon-pulse.com
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