Over 270 civil society organisations and academics from around the world have penned a statement against the use of biodiversity credits and offsets, warning that market-based mechanisms pose significant risks to ecosystems and communities.

The authors expressed “grave concerns” about the nascent market, calling on governments, financial institutions, private sector representatives, and conservationists not to be “fooled” and halt the development of such financial mechanisms.

Authors include the African CSOs Biodiversity Alliance, FIAN International, Friends of the Earth International, the Global Forest Coalition, the Green Finance Observatory, and the World Rainforest Movement.

Offsets and credits, both criticised in the document and often used interchangeably, are deemed costly, ineffective, and prone to human rights violations, with signatories warning that they could replicate issues already observed in the carbon markets.

“There is no more land to offset carbon emissions or biodiversity loss without displacing peoples and undermining food systems,” the statement said.

“Based on the long experience with carbon credits, claims that biodiversity credits are ‘additional contributions’ to biodiversity protection and would not ultimately be used for offsetting purposes are either naive or false.”

“If biodiversity credits are purchased without the intention of using them for offsetting purposes, they are most likely purchased for greenwashing purposes.”

The statement was released a few weeks ahead of the COP16 UN biodiversity summit, where biodiversity credits are expected to be widely discussed as a potential tool to finance nature conservation and meet global biodiversity targets.

Several related initiatives are poised to be launched during the conference to be held in Cali, Colombia, over Oct.21-Nov.1, including a set of market principles and recommendations outlined by the influential International Advisory Panel of Biodiversity Credits (IAPB).

“COP 16 must put in place equitable, rights-based, gender-responsive, and effective action to safeguard our planet’s biodiversity, rather than risky schemes such as biodiversity offsets and credits,” Yemi Katerere, from the African CSOs Biodiversity Alliance, stated.

To avoid violations of human rights and risks to biodiversity within crediting schemes, new standards and verification frameworks are emerging, including the recently launched Fair Credits Standard developed by a group of academics from the UK, Germany, and the US.

“WRONG ANSWER TO WRONG QUESTION”

According to the document, the large disparity between the required funding and the available resources for biodiversity protection is often cited as a justification for market development.

However, signatories said credits are ineffective and will only delay urgent action on addressing the root causes of biodiversity loss, such as reforming subsidies harmful to nature, estimated at $1.7 trillion in 2022.

“There is a deficit in the prevention and regulation of biodiversity-destructive activities, which amounted to $7 trillion annually in 2023.”

“Reforming and redirecting harmful subsidies … and providing public financing in the form of grants, are better ways to address the funding gap, avoiding the need for risky financing schemes.”

Authors emphasised the need for a transformational change, which should include:

• Strengthening environmental regulations of harmful corporate activities
• Protecting Indigenous Peoples’ territories and local communities’ tenure rights
• Ending harmful subsidies
• Securing equitable funding for community-led conservation efforts and supporting the implementation of non-market approaches

“Biodiversity credits and offset schemes are false solutions to a false problem – there are much better ways to increase biodiversity financing, without recourse to these risky schemes,” said the document.

“We call on governments, multilateral bodies, conservation organisations, and other actors to stop the promotion, development, and use of biodiversity offsetting and crediting schemes.”

Earlier this year, the Green Finance Observatory published a separate statement opposing biodiversity credits, urging Indigenous Peoples to “explicitly reject” biodiversity credits due to related risks.

Notably, during Thursday’s European Parliament’s environmental (ENVI) committee meeting, the EU lead negotiator of the Global Biodiversity Framework also voiced concerns about biodiversity credits, though he said the European Commission is willing to explore biodiversity “certificates”. “Credits” and “certificates” are often used as synonymous among market players.

By Giada Ferraglioni – giada@carbon-pulse.com

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