By Professor Ming-Jer Tsai, director, National Taiwan University Experimental Forest, and George Hu, Asia regional representative, World Climate Foundation
Markets are built on trust, not uniformity. Financial markets rarely wait for perfect scientific consensus. They scale when institutions become sufficiently trusted for capital to flow with confidence.
That lesson has shaped the evolution of carbon markets over the past two decades, yet it is often overlooked in today’s debate over biodiversity credits. Much of the discussion has focused on identifying the “best” methodology or predicting which biodiversity credit scheme will ultimately dominate the market. This is the wrong question.
The more important question is whether biodiversity markets can establish confidence that different approaches produce scientifically credible, transparent, and comparable outcomes.
Carbon markets never converged around a single methodology. Standards such as Verra, Gold Standard, and others continue to coexist, each with its own rules, strengths, and intended applications. What allowed voluntary carbon markets to mobilise billions of dollars was not methodological consensus, but the gradual development of trusted institutions, independent verification, transparent registries, and broadly understood market rules. Investors learned to navigate methodological diversity because they had confidence in the integrity of the underlying system.
Biodiversity credits face a fundamentally different challenge. Carbon can be expressed in a universal unit – a tonne of carbon dioxide equivalent – allowing projects in different countries and ecosystems to be compared using a common metric. Nature does not offer such simplicity. A restored coral reef, an alpine forest, a mangrove ecosystem, and a biodiversity-friendly agricultural landscape each generate ecological value in fundamentally different ways. There is no equivalent of a “tonne of biodiversity”.
This complexity has led some observers to conclude that biodiversity markets require a single globally accepted methodology before they can scale.
Recent developments across the biodiversity finance community, together with our review of Biodiversity Credits: Potential and Enabling Conditions in Southeast Asia (2025), reinforced a different conclusion. Innovation is not the constraint. The report reviews 50 biodiversity credit methodologies currently in use or under development, yet concludes that the absence of comparable biodiversity units remains one of the principal obstacles to building a scalable and investable market.
The diversity of methodologies should not be interpreted as evidence of market failure. It reflects the ecological reality that biodiversity cannot – and should not – be reduced to a single measurement system.
The challenge, therefore, is not to eliminate diversity. It is to build sufficient comparability across different approaches so that investors, regulators, and corporate buyers can understand, evaluate and trust the outcomes they represent.
If carbon markets succeeded by building a common language for carbon, biodiversity markets may succeed by building a common framework for interpreting many different ecological “languages”. That distinction may ultimately determine whether biodiversity credits remain a collection of promising pilot projects – or evolve into a credible component of global nature finance.
BIODIVERSITY DOESN’T NEED CONSENSUS
The search for a single “winning” biodiversity credit methodology is understandable, but it risks distracting the market from a more important objective.
Carbon markets provide a useful lesson. Today, voluntary carbon markets operate through multiple standards, registries, and methodologies, each designed for different project types, geographies, and policy contexts. Their coexistence has not prevented market growth. Instead, the market has matured by establishing transparent governance, independent verification, and sufficient confidence that different standards can deliver credible environmental outcomes.
Biodiversity markets are unlikely to follow an identical path, nor should they. Nature is inherently more complex than carbon, and biodiversity outcomes will always be shaped by local ecological conditions. Expecting tropical rainforests, coral reefs, alpine ecosystems, and agricultural landscapes to be measured through a single global methodology would ignore the very diversity that biodiversity markets seek to protect.
The diversity of today’s biodiversity credit schemes illustrates this point. Wallacea Trust’s Biodiversity Futures Initiative emphasises ecological integrity through a basket of metrics. Verra builds on governance structures familiar to carbon markets, while Plan Vivo emphasises community participation and locally governed nature-based solutions. Their differences reflect distinct ecological and market objectives rather than competing definitions of success.
The objective should therefore not be methodological uniformity, but methodological interoperability. Investors do not require every biodiversity project to be measured in exactly the same way. They require confidence that different methodologies produce outcomes that are scientifically credible, transparently verified, and sufficiently comparable to support informed investment decisions.
Biodiversity credits are unlikely to become the next carbon market, nor should they. The objective is not to replicate carbon markets, but to build a market architecture that recognises ecological diversity while providing investors with sufficient confidence to allocate capital. Markets are built on trust, not uniformity. Biodiversity credits will not scale because every project measures nature in the same way. They will scale when investors trust that different approaches produce outcomes that are scientifically credible, transparent, and sufficiently comparable.
ASIA’S ROLE IN BUILDING MARKET CONFIDENCE
If Europe has played a leading role in shaping biodiversity policy and disclosure frameworks, Asia has an opportunity to make a different – and perhaps equally important – contribution.
Rather than simply becoming a supplier of biodiversity credits, Asia has an opportunity to help build the scientific infrastructure on which credible biodiversity markets will depend.
That opportunity reflects both the region’s extraordinary ecological diversity and its scientific capabilities. Southeast Asia contains some of the world’s richest biodiversity, while also supporting globally significant agricultural systems, manufacturing supply chains, and rapidly growing economies whose long-term resilience depends on healthy ecosystems. The region therefore has a strong incentive to develop practical approaches for measuring, verifying, and valuing biodiversity outcomes.
Our experience in Taiwan illustrates how the discussion is beginning to shift from concept to implementation. Increasingly, scientists, financial institutions, and conservation practitioners recognise that the future of biodiversity markets will depend as much on scientific collaboration as on financial innovation.
At the National Taiwan University Experimental Forest, ongoing research is developing and testing biodiversity credit methodologies across forests, coral reefs, and biodiversity-friendly agricultural landscapes. The objective is not simply to generate credits, but to strengthen the scientific foundations that underpin high-integrity markets through long-term ecological monitoring, robust baselines, transparent verification, and continuous methodological improvement.
The same philosophy underpins the Asian Biodiversity Credit Alliance (ABCA), which brings together universities and research institutions from across the region.
Its ambition is not to establish another competing biodiversity standard, but to improve scientific interoperability, encourage data sharing, and develop common principles for assessing biodiversity outcomes across very different ecosystems.
Markets ultimately depend on confidence, and confidence depends on science. Without credible measurement, even the most sophisticated financial instruments cannot mobilise capital at scale.
Asia’s greatest opportunity may therefore lie not in supplying biodiversity credits, but in helping define how biodiversity is measured, verified, and understood. If carbon markets spent the past two decades developing a common language for carbon, the next two decades may require biodiversity markets to develop a common framework for interpreting many different ecological “languages”. Helping to build that framework may become Asia’s most significant contribution to the future of nature finance.
CONCLUSION
As governments, corporates, and investors increasingly look beyond carbon towards broader nature outcomes, the quality of this market’s foundations will matter as much as its pace of growth. It faces legitimate questions about scientific integrity, market demand, governance, and long-term credibility. Those questions deserve careful debate. But they should not obscure a more fundamental reality: markets rarely mature because everyone agrees on a single approach.
Carbon markets provide a useful precedent. Their growth was not driven by methodological consensus, but by the gradual development of trusted institutions, transparent governance, independent verification, and sufficient comparability for investors to make informed decisions. Diversity did not prevent market formation. Confidence enabled it.
Nature is inherently more complex than carbon, and biodiversity outcomes will always be context-specific. The objective is not to replicate carbon markets, but to build a market architecture that recognises ecological diversity while providing investors with sufficient confidence to allocate capital.
That is why the current debate should move beyond asking which biodiversity credit scheme will ultimately prevail. Wallacea Trust, Verra, Plan Vivo, and other emerging biodiversity credit approaches – including those currently being developed by research institutions and practitioners across Asia – should not be viewed as competitors in a winner-takes-all contest, but as important contributions to an evolving market. The real test is whether these approaches can establish enough scientific credibility and interoperability for investors, regulators, and corporate buyers to trust the outcomes they represent.
Markets are built on trust, not uniformity. Biodiversity credits will not scale because every project measures nature in exactly the same way. They will scale when investors trust that different approaches produce outcomes that are scientifically credible, transparent and sufficiently comparable.
If carbon markets spent the past two decades building a common language for carbon, the next two decades may require biodiversity markets to build a common framework for interpreting many different ecological “languages.” In helping to build that scientific infrastructure, Asia’s greatest contribution may not be supplying biodiversity credits—it may be helping build the institutional confidence that allows biodiversity markets to mature.
Any opinions expressed in this commentary reflect the views of the authors and not of Carbon Pulse.
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