WEF recognizes Voluntary Biodiversity Credits potential to unlock financing for nature
The Voluntary Biodiversity Credits launched by ClimateTrade and Terrasos last May are gaining traction as a tool to direct financing towards nature conservation.
The World Economic Forum (WEF) published a briefing paper this September, titled ‘Biodiversity Credits: Unlocking Financial Markets for Nature-Positive Outcomes’. In it, the authors remind readers of the importance of biodiversity conservation for the planet, but also for business.
“Over 1 million species are at risk of extinction, one third of the world’s topsoil has been degraded, forest fires are now more extensive and destructive than at any time in the past 10,000 years and 50% of the world’s coral reefs are destroyed. With more than half the world’s GDP moderately or highly dependent on nature and the services it provides, this loss of biodiversity integrity and functionality is increasingly undermining our economy, development, health and social stability,” the paper says.
While the WEF notes that business needs to transition towards regenerative practices for long-term nature protection, it recognizes that biodiversity credits are an opportunity to “protect critical ecosystems that businesses and the world depend on from irreversible tipping points” during this transition.
One of the case studies detailed in the paper revolves around the Voluntary Biodiversity Credits (VBCs) launched by ClimateTrade and Terrasos in May this year. Under the initiative, Terrasos is able to sell VBCs generated from conservation in Colombia’s Bosque de Niebla-El Globo Habitat Bank on the ClimateTrade marketplace.
ClimateTrade’s Distributed Ledger Technology (DLT) makes it possible to overcome various conceptual and technical obstacles around the sale of VBCs, such as the lack of consensus on how to treat intervention or responsibility around nature conservation between communities, NGOs, governments and companies. It also adds clarity around the rules of the Protocol for the Emission of Voluntary Biodiversity Credits (Beta version) developed in the context of the Partnership for Forests to overcome the lack of trust resulting from years of misallocation of ecosystem and forest conservation financing going to the all-powerful voluntary carbon market.
Since the launch of the VBCs in May, more than 100 credits have been sold on the marketplace, signalling strong interest in this form of climate mitigation.