#13 - Biodiversity credits: counterbalancing impacts with clear ecological equivalency rules
Joshua Berger
CEO de BioInt | Transformer la mesure des impacts & dépendances | Faciliter des actions pragmatiques & fondées sur la science | The Biodiversity Footprint Intelligence Company | Les opinions exprimées sont les miennes
This thirteenth issue of The Nature Intelligence Newsletter discusses in-depth one of the thorniest issue around the use of biodiversity credits to counterbalance negative impacts: to which extent a gain in an ecosystem is equivalent to a loss in another? It covers:
?
It is the fourth in a series of issues providing a deep-dive on biodiversity credits, previous issues covered:
Future issues will look at schemes, key questions of scheme design, trends and metrics.
As the cover indicates, this issue mostly builds on the first Biodiversity Brief released by The Biodiversity Footprint Intelligence Company (BioInt) .
Biodiversity credits should be mainly used for supply chain impacts, after the application of the mitigation hierarchy
How should companies approach supply chain impacts and how do the mitigation hierarchy apply to them? How do biodiversity credits fit within this?
A peer-reviewed paper (Maron et al. 2023) published in September 2023 provides a very useful framework to approach those issues. The Biodiversity Footprint Intelligence Company (BioInt) summarized key points of the paper based on its lead figure, displayed below.
How to apply (or not) the mitigation hierarchy at each level:
?? For project level/direct operations:
- Limits defined, avoidance prioritised
- Indirect & cumulative impacts included
- Offsets are like-for-like (i.e. needs to consider ecological equivalency)
?? For value-chain level (e.g. suppliers)
- Impacts assessed and addressed
- Compensatory actions target affected biodiversity (but without strict ecological equivalency)
?? Other conservation actions
- Do not replace the mitigation hierarchy
- Include hard-to-replace biodiversity
The authors do not say it clearly or explicitly but for me, that means biodiversity credits could be used for supply chain impacts but only after applying the mitigation hierarchy, with a less strict ecological equivalency rules (e.g. at the ecoregion level?).
Why we cannot ignore the ecological equivalency question
The elephant in the room is the question of ecological equivalency
As noted in the previous section, the mitigation hierarchy should be applied before considering any use for biodiversity credits: companies should really prioritize impact avoidance and then reduction. And only then can they consider counterbalancing negative impacts with positive ones.
Such counterbalancing implies some sort of equivalence between negative and positive impacts. The current lack of consensus on the use of biodiversity credits for counterbalancing negative impacts means a total lack of discussion of the rules governing such equivalence. There is an urgent need to debate how it would work in practice to avoid practices moving faster than conceptual frameworks and ending up with low-integrity credits.
Should we establish those rules or is this use of biodiversity credits too risky and should we instead focus on other instruments?
The question should be raised: if appropriate rules for biodiversity credits are not debated and implemented, and new use cases compared to existing instruments do not emerge, then should we instead focus our collective energy on phasing out harmful subsidies, regulatory bans (e.g. on deforestation), etc.?
The questions raised when counterbalancing negative supply chain impacts - and some potential answers
To achieve high-integrity biodiversity credits, a number of criteria have been identified by Pollination , around the following topics:
- Governance & scheme design
- Indigenous peoples & local communities
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- Relevance
- Completeness
- Consistency
- Transparency
- Accuracy
- Conservatism
One key aspect missing from those criteria is ecological equivalency - because the use of biodiversity credits to counterbalance negative impacts was not considered in Pollination's analysis -.
The post below includes the thought leadership piece developed by The Biodiversity Footprint Intelligence Company (BioInt) on the topic. A shorter summary is provided below (scroll down if you prefer the summary to the full 7 pages). A Carbon Pulse 's article also summarizes key insights from the Biodiversity Brief.
A balance between feasibility and perfect ecological outcomes
The Biodiversity Brief introduced above argued for requiring the counterbalancing to be conducted at the ecoregion level. Why? Because this seems a pragmatic compromise which can ensure high ecological integrity.
Accounting for impacts at the ecoregion level is however not easy, for instance the ecoregion scale is rarely (if ever) used in existing tools and platforms. Ecoregions also often span several countries, making this scale difficult to manage administratively. The debate is still thus open and at the same time, data providers should start developing solutions at the ecoregion level as it is in any case very relevant.
Please share your thoughts in comments! And please let me know if there is a topic you'd like me to cover in the future!
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Disclaimer: all views are mine and do not represent any institution or initiative's.
Access previous issues of the Nature Intelligence Newsletter:
Case studies and examples
#01 - Impacts on ecosystem integrity of a listed equity index assessed for the first time - STOXX600
Ecosystem condition definition and metrics
Biodiversity measurement tools
Biodiversity credits