Biodiversity Units of Gain and Credits

Need for Biodiversity Accounting

The Coalition for Private-sector Investment in Conservation (CPIC) in 2021 published a report showing the massive difference in private sector spend on climate change ($851 billion in 2021 according to Refinitiv) compared to the much smaller sums ($18 billion in 2020) on slowing the catastrophic rates of species extinctions. The Global Biodiversity Framework had identified that between $600 – $800 billion a year was needed if the targets for slowing extinction rates were to be achieved. This funding was not going to be available from governments or philanthropists and would need to come from the private sector, who were already achieving those levels of spend for climate change. Couldn’t a large part of this spend be redirected to nature-based solutions that would both sequester carbon and provide biodiversity gains?

A large part of the problem was that without an accounting unit for biodiversity there was no way of measuring or reporting it, so how could the private sector quantify any biodiversity gains or losses for which they were responsible? In 2021 the Wallacea Trust (a UK registered charity) convened a 60+ strong group of financial institutions (World Bank, IFC, IMF, Finance4Biodiversity, TNFD etc), corporates with Nature Positive commitments (GSK, Anglo-American, Sainsbury’s), consultancies (Nature Metrics, Space Intelligence, Arup, Nature Positive), academics with expertise on different ecoregions/taxa and biostatisticians, to tackle this problem.

How Does the Biodiversity Unit of Gain Work?

The Wallacea Trust methodology modelled its approach to that of the Consumer Price Index (CPI), which is a basket of goods and services in each country that is priced up annually in order to estimate annual inflation rates. We compare inflation rates around the world but the basket of goods and services that are measured in each country vary enormously. It doesn’t matter though, because that is what people are buying in those countries.

So, why not use the same approach for biodiversity – measure a basket of metrics that reflect the conservation objectives of what you are trying to achieve in the submitted habitat and ecoregion? This basket of metrics would then be measured at the start of a wildlife improvement scheme to obtain the baseline data and then after 3 – 5 years to quantify the changes in each of those metrics. Each of the metrics would have a percentage change value and the median value of the metrics would reflect the overall improvement in the biodiversity of the site.

A unit of biodiversity could then be defined as a 1% gain in the median value of the basket of metrics per hectare. This would then enable corporates already investing in nature-based carbon projects to quantify the biodiversity uplift or avoided loss their spend was achieving and report these improvements in their ESG reports in the same way as they quantify their climate impacts through carbon credits.

How Do You Determine the Basket of Metrics to be Used?

For each site you identify the biodiversity conservation objectives that are trying to be achieved for the submitted habitats in a particular ecoregion. These may overlap into other ecosystem services such as pollination potential (which can be measured by bee and hoverfly species richness and abundance), water quality (measured from aquatic macroinvertebrates), soil health (measured from soil invertebrate species richness and biomass), or air quality (measured from lichens). The easiest way to understand this is to look at two completely disparate projects – a lowland farm in England that is going to be rewilded to increase biodiversity and a coral reef in Indonesia which is being protected as marine reserve against bomb and cyanide fishing to increase the biodiversity value of the reef.

For the lowland farm then the basket of metrics could include: DEFRA biodiversity metric (a way of quantifying habitat improvements), higher plant species richness and abundance, soil invertebrate species richness and biomass, aquatic macro-invertebrate species composition (assuming there is freshwater on site and as a measure of water quality improvements), total arthropod species richness and biomass (declines in arthropod biomass is one of the main drivers of species loss in the UK) and breeding bird species richness and abundance).

For the coral reefs none of the above metrics would work but the following could be used: rugosity (measured from 3D mapping), coral cover, species richness and biomass of piscivore fish, species richness and abundance of herbivore fish, biomass of commercially exploited macro-invertebrates (octopus, sea cucumber, giant clams, lobsters etc).

How Do You Combine Species Richness and Abundance?

Just using species richness is a poor measure of biodiversity because not all species are of equivalent value. Species that are rarer or declining have a greater conservation value than those which are common. So wherever possible a conservation value should be assigned to each species.

The fall-back position should be using the IUCN threat categories (eg assigning a value of 5 to Critically Endangered species, a 4 to Endangered etc), but in many cases there are also national importance ranking schemes or even regional ones that can be used.

Over time you would hope to see an increase in the number of species at the site, but having an increase in the abundance of rare species at a site is just as important as adding a new rare species. The widely cited 70% loss of biodiversity in recent decades is reporting on declining populations and biomass, so improving populations of the more conservation valuable species should be a crucial measure of success. Adding abundance can swamp the species richness data, so just as with conservation value which is assigned a 5-point scale, abundance is similarly assigned into one of 5 categories by comparing the measured abundance of each species at a reference site (a site that has used the same management approach as being proposed for the submitted site and started from a similar baseline to the submitted site) in developing quintile categories. To calculate the Wallacea biodiversity score for say all breeding birds at a site, each species is assigned an importance value and these values multiplied by their relative abundance value and the totals for all species summed. Each metric is therefore a weighted value that reflects species richness, conservation value and relative abundance of the component species.

Whilst breeding birds might have increased by say 30% from the baseline, other metrics (e.g. soil invertebrates, pollinators, herpetofauna etc) will also have changed but by different amounts. To estimate the overall change in biodiversity the median change value in the basket of taxa is used and multiplied by the total area f the submitted site in hectares to calculate the units of biodiversity gain.

Verification of Biodiversity Claims

Claims of biodiversity gain by corporates or their consultants are unlikely to be accepted without independent verification. In order to verify such claims though, auditing of the data comparing the baseline with the current situation would be needed and this requires academic expertise. In 2023, the Biodiversity Futures Initiative (BFI), an international group of leading biodiversity academics, was formed to provide peer review scrutiny of claims. This is achieved by requiring all the raw data from both sampling occasions and auditing samples of those data to compare against data sheets. If this audit reveals no issues, then each of the metrics is recalculated and one of three results are provided:

The 40% claim for biodiversity gain is verified
The data do not support the claim bit do support (say) a 30% gain
The data were collected in such a way that no claim can be verified

In order to avoid this third option, the BFI introduced a stage 1 application where applicants can submit their proposed site to be monitored, the basket of metrics that will be used, the methodologies to quantify each of the metrics and the sampling strategy to be used (how will the samples be stratified, and numbers of replicates proposed).

Biodiversity Credits

Many of the rePLANET projects stop at the verification stage to confirm the units of biodiversity gain achieved. For example, carbon credit generating projects either from offsets or insetting projects can quantify the biodiversity gain achieved in a form that can be included in annual ESG reports. No organisation, at the moment, can claim to be Nature Positive because there is no agreed methodology for Biodiversity Footprinting in the same way as for Carbon Footprinting (e.g. PAS2060). However, they can demonstrate to their stakeholders that they are taking steps towards this target by quantifying the biodiversity benefits accruing from their existing nature-based carbon spend. Indeed, adopting a policy of only investing in nature-based carbon projects that produce a minimum of say 50% biodiversity gain, could make a significant difference to biodiversity conservation given the scale of existing carbon spend.

There are some ecosystem restoration or protection projects though that can’t be funded by just carbon credits (see Biodiversity Led Projects). For these to work financially then the issuance of biodiversity credits is also needed. In the carbon world most certification bodies verify the size of the claim and then issue credits based on this claim. The greater the size of the verified claim then the more credits are issues and since a large proportion of their income comes from credit issuance, this produces a conflict of interest. The Biodiversity Futures Initiative has committed to never issuing credits and will only verify the size of claims. This means an independent organisation is needed to issue 80% of the verified biodiversity units of gain claim as credits (the other 20% of the claim is retained as buffer as for carbon). rePLANET uses a Swiss based block chain system for issuance and retirement of biodiversity credits but it is expected that multiple ways in which verified biodiversity credits can be issued will be developed.

Who Is Buying Biodiversity Credits?

Most corporates have now committed to Net Zero Carbon targets prior to 2050. Many though have realized that this can be achieved by planting oil palm, Sitka spruce or eucalyptus and so want to demonstrate their biodiversity credentials by also adopting Nature Positive targets.

No corporate can yet claim they are Nature Positive and this won’t be possible until biodiversity footprinting can be measured in the same way as for climate with standards like PAS2060. Development of biodiversity footprinting is going to take many years and we have seen from the Global Biodiversity Framework that there isn’t time to wait for this to be developed fully. Some corporates are keen on investing in projects that produce biodiversity uplift or avoid its loss, to demonstrate that they are taking steps to meet their Nature objectives, whilst waiting for the biodiversity footprinting tool to be developed which will enable them to claim to be Nature Positive.

In addition, there are various compliance schemes aimed at developments that require replacement of lost biodiversity or even biodiversity net gain. Biodiversity credits which are a significant improvement on the habitat or rare species type of approaches used for these compliance schemes, could offer a more rigorous approach to protecting biodiversity.

Unique Points About the Wallacea Trust Biodiversity Credit

There are 4 unique features about the biodiversity credit:

It works in all ecoregions and habitats around the world
It can define a unit of biodiversity uplift or avoided loss
It can be independently validated and verified by third parties
It uses exactly the same architecture as carbon to be able to trade biodiversity credits

rePLANET Biodiversity Units of Gain and Credits

Need for Biodiversity Accounting

How Does the Biodiversity Unit of Gain Work?

How Do You Determine the Basket of Metrics to be Used?

How Do You Combine Species Richness and Abundance?

Verification of Biodiversity Claims

Biodiversity Credits

Who Is Buying Biodiversity Credits?

Unique Points About the Wallacea Trust Biodiversity Credit

rePLANET

About

Legal

Join the conversation.