Going beyond carbon with biodiversity, the next frontier of carbon markets
What is biodiversity?
Biodiversity refers to the assortment of living organisms found within an ecosystem, including plants, animals, fungi, and microorganisms.It encompasses the number, variety, and variability of all life on Earth, as well as their habitats and ecological interactions.
The Convention on Biological Diversity (CBD) defines biodiversity as “the variability among living organisms from all sources, including, inter alia, terrestrial, marine, and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species, and of ecosystems”
Biodiversity creates more productive and adaptive ecosystems, which can in turn better support carbon storage, climate regulation, resilience, and food security.
The loss of biodiversity is the result of the global economy’s inability to internalize the value created by these kinds of ecosystem services.
Biodiversity credits in the carbon market
Ecological projects are increasingly going beyond carbon credits to address a broader range of ecosystem and social issues. While carbon credits remain an important tool for helping sustainable companies go beyond net zero emissions and address climate change, ecological projects are recognizing that other environmental and social challenges are also critical for regenerative development. Biodiversity credits contribute to this movement and add vital value to the preservation and regeneration of the planet by:
- Protecting unique and irreplaceable ecosystems: Biodiversity credits can help protect unique and irreplaceable ecosystems, such as rainforests, wetlands, and coral reefs, that are important for maintaining global biodiversity and providing essential ecosystem services.
- Recognizing the value of biodiversity: Biodiversity credits recognize the intrinsic value of biodiversity and the critical role it plays in supporting human well-being by providing clean air and water, regulating the climate, supporting food security, etc.
- Encouraging conservation and restoration efforts: Biodiversity credits provide a financial incentive for landowners and managers to conserve and restore biodiversity by providing a market for the ecosystem services that healthy ecosystems provide.
- Creating new funding streams: Biodiversity credits can create new funding streams for conservation and restoration efforts, which can help support the development of new projects and initiatives.
- Supporting regenerative development: Biodiversity credits can support regenerative development by promoting the conservation and restoration of ecosystems that are critical for supporting local livelihoods and economies.
Biodiversity credits created through Regen Registry
Created via Regen Registry, ERABrazil is developing a biodiversity protection credit, focusing on umbrella species’ role as a cornerstone for balance of the ecosystem. Umbrella species, which play a vital role in the structure, function, and productivity of an ecosystem, can be used to determine locations and sizes of conservation areas. This project will increase the number of protected hectares of habitat, publish a general framework to incentivize the monitoring of umbrella species and ecosystem health in various biomes, and ensure that local residents receive payments for becoming stewards of a chosen umbrella species occurring in the project areas. The project enrolls land steward data collection strategies for the ecological corridor and water source protection of 32,000 hectares, with 11,000 hectares of native vegetation.
An expanding biodiversity market
Biodiversity credits are unique and valuable because they recognize the intrinsic value of biodiversity, incentivize conservation and restoration efforts, create new funding streams, and support regenerative development. By providing a way to monetize the value of biodiversity, biodiversity credits can help ensure its long-term protection and restoration.
Signs of inflection in the biodiversity market are emerging that are reminiscent of the evolution of the voluntary carbon market. If we’re able to do this effectively at Regen Registry — create standards and technology for at scale biodiversity offsets — a thriving biodiversity offset market may resemble the carbon market today, helping sustainable companies go beyond net zero emissions. This would be a first step towards creating economic systems that internalize the value of our planet’s ecological health beyond just carbon emissions. This is critical if we hope to meaningfully change our planet’s current trajectory.
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