28-December-2024-Special-Article

BIODIVERSITY CREDITS AND THEIR ROLE IN CONSERVATION

Biodiversity is the foundation of life on Earth, but its rapid loss due to human activities has raised concerns globally. In recent years, biodiversity credit markets have been promoted as a potential solution to offset biodiversity damage by funding conservation efforts. However, recent studies have questioned the effectiveness of this market, raising concerns about its real impact on nature.

What Are Biodiversity Credits?

Biodiversity credits are tradable financial instruments designed to reward actions that contribute to the conservation of nature, including species, ecosystems, and habitats. These credits are generated through land or ocean-based conservation initiatives over a set period.

Origin:

• The World Economic Forum (WEF) introduced the Biodiversity Credits Initiative to promote new funding for biodiversity outcomes.
• It aims to provide a mechanism for compensating biodiversity loss by allowing companies or governments to purchase credits that fund conservation projects elsewhere.

Mechanism:

• Much like carbon credits, biodiversity credits work on the principle of “offsetting.”
• If a company or government entity damages biodiversity, it can offset the harm by purchasing biodiversity credits, which finance conservation actions in different locations.
• This allows for the balancing of biodiversity loss with conservation efforts, often attracting private investment in the process.

Market Potential:

• According to WEF, the biodiversity credit market is valued at approximately USD 8 million and is projected to grow significantly, reaching USD 2 billion by 2030 and USD 69 billion by 2050.
• The Kunming-Montreal Global Biodiversity Framework 2022 calls for mechanisms such as biodiversity credits to raise USD 200 billion annually by 2030 to protect biodiversity globally.

Biodiversity Credit Alliance (BCA)

Purpose:

The BCA is an international voluntary alliance designed to support the objectives of the Kunming-Montreal Global Biodiversity Framework.

The BCA aims to establish a credible and scalable biodiversity credit market by building a framework of high-level science-based principles.

Formation:

• The alliance was launched in December 2022 during the 15th meeting of the Convention on Biological Diversity (CBD COP 15) held in Montreal, Canada.
• Key stakeholders include the private sector, indigenous peoples, local communities, and organizations like UNDP and UNEP-Finance Initiative (UNEP FI).

Key Goals:

• The BCA focuses on facilitating the private sector’s involvement in biodiversity conservation through biodiversity credits.
• It aims to create a credible and transparent market that supports biodiversity conservation while ensuring social safeguards.

Biodiversity Conservation Initiatives

India’s Efforts:

India has implemented various initiatives to conserve its rich biodiversity, including:

• India Business & Biodiversity Initiative (IBBI)
• Wetland (Conservation and Management) Rules 2010
• National Plan for Conservation of Aquatic Ecosystem
• Wildlife Crime Control Bureau
• Biological Diversity Act, 2002

Global Initiatives:

At the international level, there are numerous efforts to protect biodiversity:

• The Nagoya Protocol
• Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)
• World Wide Fund for Nature (WWF)

Concerns Regarding the Biodiversity Credit Market

While biodiversity credits present a new financial avenue for conservation, several concerns have emerged regarding their effectiveness:

Flawed Concept:

• Critics argue that the biodiversity credit mechanism allows for harm to continue in one area while offsetting it in another, rather than addressing the root causes of biodiversity loss.
• This approach might result in the displacement of harm rather than its prevention.

Displacement and Land Grabs:

• Wealthier nations and corporations can purchase biodiversity credits from poorer countries, often in the Global South.
• This practice may lead to land grabs and the displacement of indigenous and local communities.
• The displacement disproportionately impacts marginalized groups, including women, who rely on these lands for their livelihoods.

Measurement Challenges:

• Unlike carbon credits, which are standardized based on a fixed measurement (e.g., one tonne of CO₂), biodiversity credits are measured in hectares, making it difficult to compare biodiversity outcomes across different ecosystems.
• This lack of uniformity complicates the credit system’s effectiveness in ensuring genuine biodiversity protection.

Leakage of Harmful Activities:

• One major flaw in the biodiversity credit market is the phenomenon of “leakage.”
• This occurs when harmful activities, such as deforestation, shift to new areas as a result of biodiversity credit purchases.
• For example, a company may offset its biodiversity loss in one location but engage in damaging practices elsewhere, thus not reducing overall biodiversity degradation.

Delay in Addressing Systemic Issues:

• The reliance on biodiversity credits could delay more systemic changes needed to address biodiversity loss at its roots, such as curbing deforestation, reducing unsustainable agricultural practices, or limiting fossil fuel extraction.
• Moreover, the short duration of some biodiversity credit agreements makes it difficult to assess long-term conservation outcomes, as some ecological processes require decades to show measurable impacts.

Way Forward

To enhance the effectiveness of biodiversity conservation efforts, it is necessary to focus on long-term, sustainable solutions that go beyond market-based instruments like biodiversity credits:

Preventing Biodiversity Loss:

• The primary focus should be on preventing further biodiversity damage rather than simply offsetting it.
• This involves tackling the root causes of biodiversity decline, such as deforestation, pollution, and unsustainable resource extraction.

Developing Context-Specific Metrics:

• To improve the accuracy of biodiversity credits, it is crucial to develop context-specific metrics that consider the health of ecosystems, species interactions, and cultural significance, rather than merely focusing on land area.

Holistic Approaches:

• Industries that drive biodiversity loss, including agriculture, forestry, and mining, must undergo transformation to minimize their environmental impact.
• Promoting circular economies and integrating biodiversity protection into all sectors of policy is essential for long-term sustainability.

Empowering Local Communities:

• Local communities and civil society organizations should play a central role in monitoring and assessing biodiversity credit projects to ensure that the benefits of such initiatives reach the people and ecosystems that need them most.

Shifting Towards Nature-Based Solutions:

• A more sustainable approach would involve expanding protected areas, restoring ecosystems, and supporting community-led conservation efforts.
• These solutions not only protect biodiversity but also recognize the intrinsic value of nature beyond its economic worth.

Conclusion

Biodiversity credits have the potential to support global conservation efforts, but they are not without their flaws. While the market offers a new way to finance biodiversity protection, there are significant concerns regarding its ability to deliver genuine, long-term outcomes. To truly address biodiversity loss, efforts must focus on preventing harm, improving measurement standards, and empowering local communities to take the lead in conservation.

Mains Question:

1. “Critically analyze the concept of biodiversity credits as a tool for conservation and discuss the challenges associated with their implementation.” (150 WORDS)