Could farmers get money for protecting birds or plants? That’s the hope of the European Union, which is seeking to monetise biodiversity by creating a market for “nature credits”.
The European Commission last month launched a series of talks with financial, farming and green groups to ponder the idea, which has some environmentalists worried.
“You can make good money by razing a forest to the ground, but not by planting a new one and letting it grow old,” the EU’s environment commissioner Jessika Roswall told a “Global Solutions” conference in Berlin on Monday, adding the bloc wanted to change that.
The plan is still in its infancy, and no concrete details have been put forward yet.
But the idea is to replicate the financial success of carbon credits, which launched two decades ago to help finance efforts to tackle global warming and have developed into an almost trillion-dollar global market.
Carbon credits allow a polluter to “offset” their emissions by paying for “avoided” emissions elsewhere.
Nature credits, on the other hand, would see businesses brush up their green credentials by paying for initiatives that restore or protect nature — something Roswall said cannot be financed by public coffers alone.
At a UN biodiversity summit in 2022, world nations agreed to a target of protecting 30% of the planet’s lands and oceans by 2030 and to provide $200 billion a year in finance.
Pricing nature
Under the EU plan, activities that protect or restore nature would be certified and the related certificate traded in a dedicated financial market.
But things get more complicated in practice.
“Putting a price tag on nature” is a “more complex” affair than pricing carbon emissions, said an EU official.
How much CO2 is released into the atmosphere or sequestered by a specific activity is easily measurable, the official said.
The same can not be said of biodiversity, which is by definition diverse, with many varieties of animal and plants making it tricky to measure and identify value.
“Waking up to the song of birds, drinking water from a mountain spring, staring at the endless blue of the sea and of the ocean. How could you possibly put a price tag on any of this?” Roswall asked in Berlin.
“We do put a price tag on nature, every second, every day, but only by taking resources away from their natural environment,” she added.
In Europe, several pilot projects have been launched to test the concept, including in Finland, France and Estonia, where an initiative is seeking to reward forest owners for sustainably managing their plots.
The 27-nation EU is hoping these and other projects will provide farmers and foresters with an additional source of income.
‘No coincidence’
It is not alone. Similar schemes were discussed at the UN COP16 nature talks in Colombia last year, and more than a dozen countries, including the United States and Germany, already have a nascent market or a project underway.
Yet, striking a cautious note, pan-European farmers’ group Copa-Cogeca said it wanted to see a concrete proposal before commenting.
Environmental groups, on the other hand, are worried about a possible repeat of the many scandals that have dogged carbon credit markets, from tax fraud to the certification of projects that did nothing for the environment.
Nature credits could offer firms another opportunity for “greenwashing” — pretending they are greener than they really are — and authorities an excuse to cut back public funding for biodiversity, some warn.
“Not even the commission knows what they want to do,” Ioannis Agapakis, a lawyer with ClientEarth, an environmental group, said of the European Commission.
Yet, it was “no coincidence” — and “a concern” — that the idea was being floated as the EU’s executive body prepared to negotiate the future European budget, he added.
