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Bio-credits

Facts for Prelims (FFP)

 

Source: DTE

 Context: There is growing momentum behind the concept of biodiversity credits or bio-credits, proposed as a financial mechanism to support the targets outlined in the Kunming-Montreal Global Biodiversity Framework (KMGBF) adopted in 2022.

 

What is Bio-Credits?

Bio-credits are financial instruments proposed to support the targets outlined in the Kunming-Montreal Global Biodiversity Framework. Similar to carbon credits, bio-credits aim to generate funds for biodiversity protection and restoration by selling credits, with proceeds directed toward conservation projects.

 

Organizations Involved:

The Biodiversity Credit Alliance was launched (in COP15 of CBD, 2022) to promote bio credits. Other initiatives, such as the Ocean Conservation Commitments, have emerged to encourage the use of Bio-credits.

 

About KMGBF:

EventDetails
Conference Name15th Conference of Parties (COP15) to the UN Convention on Biological Diversity (CBD), 2022 adopted Kunming-Montreal Global Biodiversity Framework (GBF)
Goals of GBFRestore 30% of degraded ecosystems globally (on land and sea) by 2030
Conserve and manage 30% of areas (terrestrial, inland water, coastal, and marine) by 2030
Prevent the extinction of known species
Reduce various environmental risks and footprints
Targets of GBF23 targets for achievement by 2030, including the 30×30 Deal, reduction of pesticide and nutrient risks, pollution control, sustainable consumption, climate change mitigation, invasive species control, and wildlife trade management
Need for Bio-CreditThe KMGBF targets private investment through innovative schemes like bio credits, with an estimated annual need of at least $200 billion for biodiversity protection.

 

Examples of Bio-Credits:

Bio-Credit ExamplesDetails
Ocean Conservation Commitments (OCCs)Launched in September 2023 by the Government of Niue and the non-profit Tofia Niue. Offers OCCs based on the size of Niue’s Marine Protected Area, available for purchase to fund conservation projects.
Wallacea TrustA biodiversity and climate research organization based in the UK. Has financial commitments for 5 million biodiversity credits, with 60% of the issuance price directed to local stakeholders.
Besparingsskog (Sweden)A forest cooperative in Sweden. Swedbank has invested an undisclosed amount to protect 13 hectares of forested area over 20 years, using bio credits.
GlaxoSmithKline (GSK)Purchased bio credits from rePLANET to protect Cusuco National Park in Honduras.
ValueNatureA company facilitating the development of biodiversity credits. Plans to bring biodiversity credits to the market in 2024, aiming to generate funds for biodiversity protection.