Early players in the biodiversity market disagree over the role of additionality, with some saying it should be “dead and buried”, while others see it as a fundamental principle to attract funding.

Ricardo Bayon, partner and founder of US investment firm Encourage Capital, said during a panel at Climate Week NYC on Wednesday – hosted by impact investment firm Ethic – that nature needs a financing mechanism that is not additionality-based like carbon markets.

“When it comes to nature, I think that additionality needs to be dead and buried in some ways,” said Bayon.

“That’s one of the lessons that we take from the carbon space.”

“We should focus on other things, such as pricing the risk related to the destruction [of the ecosystems], involving insurance companies, asset managers, and policymakers,” Bayon added.

Conversely, according to David Antonioni, founder of consulting company Transition Finance and former CEO of crediting standard Verra, the concept can’t be left behind, as it helps organisations understand the impact of their investments.

“It may be more challenging than in carbon, but I think we absolutely need to have some measure of understanding that investment is actually going to avoid the destruction of forests or other ecosystems,” Antonioni said.

“I think that’s a fundamental principle. The only thing we have to do now is find new tools to demonstrate it, to avoid the mistakes made in the carbon market.”

During the debate, Harvey Locke, vice chair for Nature Positive of the International Union for Conservation of Nature (IUCN), pointed out that achieving global biodiversity targets under the 2022 Kunming-Montreal Global Biodiversity Framework (GBF) will require a much more comprehensive approach than simply ensuring additionality.

“Nature positive means halting and reversing biodiversity loss, and additionality only contributes to the ‘reverse’ part,” said Locke.

“The concept is fit for purpose in target 2 of the GBF, which is about restoring 30% of all degraded ecosystems, but it doesn’t help us with target 1 on the loss of intact areas, and target 3 on conserving at least 30% of land, waters, and seas by 2030.”

“We need to imagine something new that isn’t additionality-based to get at that, or we’re going to go round and round in circles.”

With biodiversity becoming an international priority under global and national frameworks, and new mechanisms such as biodiversity credits emerging to channel funds towards nature-positive activities, the issue of additionality has been increasingly debated.

In August, a group of scientists led by Tom Swinfield from the Centre for Carbon Credits published a paper claiming that nature-based credit markets must prove additionality before sales to make them credible and scale investments.

By Giada Ferraglioni in New York – giada@carbon-pulse.com

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