TY - JOUR
T1 - Biodiversity credits
T2 - An overview of the current state, future opportunities, and potential pitfalls
AU - Wunder, Sven
AU - Fraccaroli, Cecilia
AU - Bull, Joseph W.
AU - Dutta, Trishna
AU - Eyres, Alison
AU - Evans, Megan C
AU - Thorsen, Bo Jellesmark
AU - Jones, Julia P. G.
AU - Maron, Martine
AU - Muys, Bart
AU - Pacheco, Andrea
AU - Olesen, Asger Strange
AU - Swinfield, Thomas
AU - Tegegne, Yitagesu Tekle
AU - White, Thomas B.
AU - Zhang, Han
AU - zu Ermgassen, Sophus O. S. E.
N1 - Publisher Copyright:
© 2025 The Author(s). Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd.
PY - 2025/6/17
Y1 - 2025/6/17
N2 - Biodiversity credits are an emerging vehicle for pro-environmental financing, yet much uncertainty remains around how and when they could boost biodiversity conservation. Here we define what biodiversity credits are and explore impact pathways through a proposed theory of change. Based on evidence from 34 pilot projects and a review of lessons from related market-based incentives for conservation, we further explore potential opportunities and pitfalls, including future supply and demand, bundling/stacking options, and needed social safeguards. We explore how biodiversity credits can better tackle challenges linked to additionality, permanence, leakage, and commensurability. While new monitoring technologies can help quantify biodiversity, trade-offs exist between simple metrics enabling liquid markets and costlier ones more adequately representing biodiversity. To avoid past mistakes, sound credit design and implementation require more robust crediting baselines, standards, governance, and impact evaluation. Quality credits will be more expensive than those cutting integrity corners, which may dampen the expected biodiversity credit boom.
AB - Biodiversity credits are an emerging vehicle for pro-environmental financing, yet much uncertainty remains around how and when they could boost biodiversity conservation. Here we define what biodiversity credits are and explore impact pathways through a proposed theory of change. Based on evidence from 34 pilot projects and a review of lessons from related market-based incentives for conservation, we further explore potential opportunities and pitfalls, including future supply and demand, bundling/stacking options, and needed social safeguards. We explore how biodiversity credits can better tackle challenges linked to additionality, permanence, leakage, and commensurability. While new monitoring technologies can help quantify biodiversity, trade-offs exist between simple metrics enabling liquid markets and costlier ones more adequately representing biodiversity. To avoid past mistakes, sound credit design and implementation require more robust crediting baselines, standards, governance, and impact evaluation. Quality credits will be more expensive than those cutting integrity corners, which may dampen the expected biodiversity credit boom.
KW - biodiversity monitoring
KW - ecological economics
KW - economic incentives
KW - environmental finance
KW - equity
KW - forest carbon
KW - impact evaluation
KW - institutions
U2 - 10.1002/bse.70018
DO - 10.1002/bse.70018
M3 - Journal article
AN - SCOPUS:105008320527
SN - 0964-4733
JO - Business Strategy and the Environment
JF - Business Strategy and the Environment
ER -