Getting to market-based biodiversity solutions at speed and scale

Without the diversity of life on earth, which we sum up as “biodiversity”, so many of the things we take for granted — pollination of our crops, clean water, reduced flooding risk, amazing human experiences in nature, climate regulation, and a huge array of nature-derived products — would simply not exist. Around half of the global GDP, roughly $44 trillion US, is highly or moderately dependent on nature, according to the World Economic Forum. But the destruction of biodiversity has been taken for granted as a part of doing business for far too long. The costs of destroying biodiversity, which hurts all of us, have been everybody’s and nobody’s problem. With nobody on the hook for fixing the destruction, action has not kept pace with need: 25% of species are currently threatened with extinction, and declines are accelerating.

There’s a growing understanding of our deep dependence on nature and its biodiversity, with mounting pressure on businesses and governments to take action to halt and reverse the destruction. The Convention on Biological Diversity’s Global Biodiversity Framework ratified at COP15 in Montreal, Canada, in December 2022 is the latest and highest-profile agreement, but other efforts like the Science-Based Targets for Nature and the Taskforce for Nature-Based Financial Disclosures are also making important progress. Businesses are taking note, with efforts like the Business for Nature “make it mandatory” nature dependencies campaign signed by more than 330 businesses worldwide, including Nestle, Unilever, Volvo, Ikea, and many more. 

Regardless, a huge gap remains in finance for biodiversity conservation, estimated to be roughly $700 billion per year over the next ten years. Filling this gap calls for bringing the value of nature, including biodiversity, into all parts of our economy. We have many tools to do so that we know work(backed by research). The IUCN estimates that without conservation actions to date, trends in species extinction risk would be 20% worse than they are. But closing the finance gap with available tools at scale will require government actions like stopping harmful subsidies and putting protective regulations in place. It will also require that we develop rapid, scalable ways of measuring and valuing nature, including in the private sector. We cannot value, conserve, and invest in what we cannot measure.

At NCX, we are working to help bring quantitative measurements of biodiversity to life in our carbon-crediting work and beyond. We see biodiversity as a key co-benefit of carbon, allowing buyers to distinguish between high-quality carbon that measurably enhances biodiversity (and other co-benefits) and low-quality carbon that does not. We also know that biodiversity has value independent of carbon. However, it turns out that high levels of carbon and biodiversity often go hand-in-hand as the result of healthy ecosystem function.

Accurate measurements of biodiversity, as well as prediction and verification of how paid interventions benefit biodiversity, are just the starting point for creating successful market-based solutions for biodiversity. To get to market-based biodiversity solutions at speed and scale, we think there’s a lot to learn from other natural capital efforts, from wetland and species mitigation banking to water quality trading, novel insurance mechanisms for ecosystem repair following disasters, temporary bird habitat credits, fire risk mitigation programs, and much more. 

Join us for a conversation exploring the importance of biodiversity, the challenges to scaling biodiversity markets and credits, and what we can learn from other market-based approaches to nature. In the first in a series of conversations, we’ll be speaking with Sarah Heard, the Director of The Nature Conservancy’s MarketLab. She has over 20 years of experience in environmental markets and conservation finance and is focused on demonstrating the economic value of sustainable natural resource use as a means to incentivize conservation. 

To join the conversation live, register for our webinar: The Path to Nature Positive Carbon Credits Starts with Better Measurement. Or, if you’re reading this after it happened, you can register and watch it on-demand.