Biodiversity credits: learning lessons from other approaches to incentivize conservation

Integrated forest management is a fundamental concept for the sustainable provision of demanded ecosystem services and the simultaneous promotion of biodiversity in our forests. Biodiversity credits are an emerging vehicle for pro-environmental financing. Here we define and delimit biodiversity credits, explore their impact pathways, discuss potential future supply and demand, bundling/stacking options, and needed social safeguards. We scrutinize early evidence from 34 pilots and suggest lessons from other market-based incentives for conservation and climate mitigation, including biodiversity offsets and forest carbon credits. These have attracted large private funding flows, but have been questioned regarding their additionality, permanence, and leakage. All these issues apply to biodiversity credits, on top of another challenge: rendering biodiversity commensurable. While new monitoring technologies can help quantify biodiversity, tradeoffs exist between simple metrics enabling liquid markets, and costlier ones more adequately representing biodiversity. To avoid past mistakes, biodiversity credit design, implementation, and impact evaluation require more robust crediting baselines, standards, and governance. Quality credits will be more expensive than those cutting integrity corners, which may dampen the expected biodiversity credit boom.