Biodiversity credits

  • The world is facing two major environmental threats – climate change and species loss. Govts and the private sector have started significant policy changes and spend on addressing the climate change issues (eg Net Zero Carbon spend commitments) but other than generalized commitments from a few companies and govts on Net Nature Benefit, there has not been the same progress on biodiversity. This is partly because identifying progress in climate change can be quantified in terms of carbon credits (1 carbon credit is 1 tonne of carbon dioxide not emitted or sequestered) whereas quantifying biodiversity progress is much more difficult. There is no single taxon that can act as a read across to carbon dioxide, in which increases can be seen as beneficial in all circumstances or even a reflection of the overall biodiversity changes in other taxa.

    In the UK we are seeing the first international legislation requiring a minimum of 10% biodiversity uplift in all new planning applications. In order to quantify this, DEFRA has developed a biodiversity metric 3.0 which is based on scoring the habitats and their condition. However, applying just this metric can seriously underestimate the biodiversity uplift in sites like the Knepp Wildlands where insect abundance has grown enormously, there are many more Red List breeding birds, bats and butterflies including the largest population of Purple Emperor. Yet using the DEFRA biodiversity metric shows only a small (in comparison to the faunal groups) improvement in overall score when changing from wheat fields to a mix of woodland, scrub and grassland.


Is there a solution to measuring biodiversity uplift?

  • One solution to this problem would be to mimic the approach used by the Retail Price Index which compares a basket of goods and services in current use in each country to determine inflation rates in the economy of those countries. The baskets of goods and services vary enormously between individual countries to reflect what is being purchased in those countries, but the resulting inflation figures can be compared.

    Opwall has formed a 50 strong Biodiversity Credit Working Group comprising corporates (eg. Glaxo Smith Kline, Sainsbury’s, Croda plc etc), financial institutions (eg World Bank, IMF, Finance for Biodiversity, Task Force for Nature-related Financial Disclosures, TNFD), experts in different taxa and biostatisticians to develop an international biodiversity credit standard that could be traded in the same way as a carbon credit. Credits would be issued by a third party independent certification body – Plan Vivo (one of the longest established carbon certification schemes).

    The biodiversity equivalent of the RPI is to identify the conservation targets for each ecoregion or habitat and then develop a basket of metrics that can be used to assess progress towards those targets. The Convention on Biodiversity (1992) required signatory countries to produce national Biodiversity Action Plans with objectives for biodiversity uplifts in each habitat.

    Many countries have now gone further and produced local Biodiversity Action Plans that define the objectives at a local level. In the UK these are now being replaced by Local Nature Recovery Strategy groups, with a network of these groups across the UK being formed under the aegis of local councils as part of the soon to be passed Environment Act. The overall objective of this network will be to have 30% of semi-natural habitat with connectivity between them.

    For biodiversity credits then the certification standard would require a minimum of 5 measurable metrics that would reflect the national and local conservation objectives for that habitat. The proposers of schemes for production of credits would need to convince a panel of biodiversity experts contracted by Plan Vivo that the metrics being proposed would reflect the national and local biodiversity targets for those habitats. This approach would then allow metrics to be developed for any eco-region, habitat or location around the world and a biodiversity credit defined as a 10% uplift in the basket of metrics per hectare. The benefit of spend on biodiversity could then be quantified.


Once you have the basket of metrics how do you issue biodiversity credits?

  • Carbon credits can be issued either as ex-ante credits or as ex-post credits. In carbon terms ex-ante credits can be obtained for planting a forest and are based on predicting how much carbon will be sequestered over an agreed timescale. Ex-post credits in carbon terms could be used to issue credits on a reforestation projection after the carbon had been sequestered at set time periods after planting (e.g. at 5 year time periods).

    It is proposed that biodiversity credits would similarly be obtainable both ex-ante and ex-post. Ex-ante biodiversity credits could be assessed from the predicted changes in those metrics over an agreed future time scale, where there was a suitable reference site. The reference site would need originally to have been of a similar area, soil type and habitats as the submitted site and have taken a known time to develop the increased biodiversity using the same management approach as proposed for the submitted site. The measurement of the metrics at both the reference and the submitted site would need to be completed simultaneously to avoid changes in weather conditions affecting the results. The sampling strategy would need to be sufficiently extensive to allow statistical analysis to determine if the observed differences are significant at a predetermined significance level (a 10%, 0.1 probability might be considered sufficient for this purpose). Because the metrics used will likely have unknown error distributions, jacknife or bootstrap simulation methods would be used to test for significant differences.

    Ex-post credits could be issued for projects where the average increase in the basket of metrics has been measured over a given time period (e.g. from adoption of the new management in year zero compared with say 5 years later). Alternatively ex-post credits could be issued for areas of high biodiversity value that are under threat from development (biodiversity credits for avoided development projects that would mirror the carbon credits for avoided deforestation projects). In this case it would require measuring the value of those metrics at the submitted site versus a developed site that reflected the proposed habitats that would ensue from completing the development.

    One of the key tasks of the certification body is to confirm that the developed site is a true reflection of what the submitted site will become if the proposed development goes ahead. Note for avoided development ex-post credits, the key decider on whether the credits can be issued is the likelihood that the submitted site will be changed to a new use and biodiversity loss is therefore a reality. The project proponent will therefore be required to submit evidence that in the absence of the biodiversity credit funding development of the site and loss of biodiversity will occur.


Monitoring, setting conservative targets, biodiversity credit insurance bank and retiring credits

  • Biological populations as well as the presence/absence of rare species in any particular year, have a high degree of variability. In order to give ex-ante biodiversity credits credibility, the predicted uplift should be set lower than has been achieved at the reference site over the same time period. Moreover, just as with carbon credits, 20% of the final issued number of credits should be retained by Plan Vivo to provide a biodiversity bank that can be used to offset any shortfall in achievement of the biodiversity targets on the various projects for which biodiversity credits have been issued.

    Biodiversity credits issued by Plan Vivo will be retired through a third-party independent organization. They will issue a unique serial number for each biodiversity credit to ensure there is no double-counting or double-selling of Plan Vivo biodiversity credits.

Example baskets of metrics

Each basket of metrics would differ but two examples are given below:

  • Lowland arable and livestock farmland converting to rewilding or regenerative farming
    1.DEFRA biodiversity metric 3.0 to measure uplift in habitats
    2.Biomass of arthropods to measure changes in total food availability for insectivorous birds
    3.Species richness and abundance of pollinator bees and hoverflies
    4.Changes in butterfly and macro-moth species richness and abundance
    5.Changes in UK Red, Amber or Local Biodiversity Action Plan breeding birds
    6.Changes in bat species richness and abundance


    Coral Reefs
    1.Reef rugosity measured by 3D mapping
    2.Coral cover
    3.Fish species richness and abundance measured from stereo video fish counting
    4.Total macro-invertebrate species richness measured from eDNA sampling
    5.Abundance of commercially exploited invertebrate species on the reef


    If you are interested in potentially using biodiversity credits to fund projects on your land, please contact Dr Tim Coles (

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