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Meet the perky younger siblings of carbon credits

Why bio-credits are the future of African conservation… and could democratise the protection of the natural world

Hello – conservationists have laboured for decades to sustain Africa’s diverse species and natural habitats.

The solutions are well-known: Gazette protected areas, monitor fauna and flora, create additional support and foster community relations. 

But every passing decade brings more bad news. Species are in decline across most of the continent, alas. 

Not only does biodiversity have intrinsic value and beauty – but it is essential to a global ecosystem that includes major carbon sinks. 

What more can be done? Welcome to Conservation 2.0, or Voluntary Biodiversity Credit Markets. They barely exist yet but may be the most promising innovation in this field. 

Bio-credits create an incentive for those protecting local habitats – in the form of linked financial assets they can sell. Destroying nature will have an immediate and financial cost.

Today’s reading time: 4 mins

LOGISTICS UPDATE | Thursday 18 July

EVENTS…

📆 SA hosts meetings on biodiversity & conservation (Aug 14)

📆 Kenya hosts Powerelec exhibition & conference (Nov 13) 

📆 Nigeria hosts green finance workshop (July 23)

AND JOBS…

💼 Vestas seeks a health & safety manager (South Africa)

💼 One Acre Fund seeks a seed production lead (Rwanda) 

💼 Shift EV seeks an electric drivetrain engineer (Egypt)

1.🚁Heli view: Can a storm of financial innovation save Africa’s wild places?

They may not yet have the sex appeal of electric vehicles. But “biodiversity credits” – currently emerging across the continent – appear similarly vibrant and futureful.

What they are: Financial instruments aimed at conserving or restoring specific bits of nature. 

The status quo: Carbon credits, now two decades old, at times already include similar aspects. 

  • But mostly they’re an add-on rather than being core to the instrument.

What’s new: Bio-credits are now rapidly splitting from the carbon markets, differing in aim. 

  • Carbon credits focus on direct climate impact, for example on reducing CO2. 

  • While bio-credits aim to sustain diversity in nature, benefitting climate indirectly. 

  • This could be rocket fuel for conservation efforts, especially in Africa.

The market: Experts see bio-credits becoming standalone, tradable assets within 2-3 years.

  • They’re projected to be worth $2 billion by 2030 (similar to carbon markets today). 

  • By 2050, demand for bio-credits is estimated to reach up to $180 billion a year.

Organisational wilderness: NatureFinance, a Geneva-based outfit, is preparing a technical report that maps and analyses the emerging bio-credit landscape across the continent. 

Rule-making: It has already published suggestions to boost bio-credits by focusing on: 

  • Quality of credits and market (dis-)incentives 

  • Equitable market access and fair prices for all stakeholders 

  • Regulations for transparency and efficient trading, capturing stakeholder views.

Tip of the iceberg: A frenzied race is underway to set standards, develop crediting frameworks and influence outcomes.

  • Cooperation as well as competition is bringing together NGOs and consultancies in various settings.

  • Big names include McKinsey, Dalberg and Crossboundary, as well as the World Economic Forum and The Nature Conservancy. 

  • Standard setters from carbon markets are also involved, including Verra, Plan Vivo, Gold Standard and Social Carbon. 

  • And last but far from least, successful carbon credit developers: SouthPole, Green Collar, Terrasos, Nature Credit, Wilderlands and more.

On the ground: Perhaps the most interesting work is done at individual project level. Dozens of initiatives are pioneering or trialling solutions (see our map and cheat sheet).  

Shovels to miners: On the periphery of the emerging bio-credit sector, specialist service providers are setting up shop. 

  • Baotree offers tracking using mobile technology, bridging on-the-ground data collection with monitoring across portfolios of projects.

  • AirImpact builds comprehensive monitoring platforms to scale conservation efforts, with a focus on transparency and community engagement. 

  • BIRA, the “Biodiversity Investments—Researcher & Accelerator” is Africa’s first accelerator for biodiversity credit projects. 

Main drivers: Why the rush? Biodiversity markets aim to solve three problems: Generate capital for conservation, change harmful behaviour and boost local stewards of nature.

First, conservation capital: A big funding gap is limiting efforts to protect wild places.

  • Nature globally needs up to $1 billion by 2030. 

  • Actual funding today is perhaps $150 billion.

  • The public sector historically contributed 80% of funding but can no longer cope.

To fill the gap: The private sector is called on to scale financing for nature beyond philanthropy. Likely investors include: 

  • Financial institutions: Banks, insurers, pension funds

  • Polluters: Car makers, airlines, property developers

Second, behaviour change: Another goal is to make biodiversity destruction expensive. 

  • If the survival of a species has financial benefits, business is expected to shift towards more nature-positive products, services and processes. 

Third, equity: Indigenous peoples & local communities need a bigger stake in conservation.

  • Bio-credits will give them additional ownership in their native landscapes. 

  • Sharing rewards with nature’s stewards will benefit general ecosystem health.

Litmus test: Like EVs, bio-credits are a fast developing pillar of the green economy. 

  • Within three years, we should know if they really will be a major new asset class.

  • This would undoubtedly be a win for conservation.  

Yes but: Nascent markets are exciting yet do not always thrive (remember crypto?)

  • Countless proprietary biodiversity methodologies are in development.

  • No single global standard has emerged – yet.

  • Is one even desirable, or should credits remain individual and proprietary?

  • The answer may dictate who will be the commercial winners. 

2. Cheat sheet: 5 bio-credit projects spotted in the wild

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