Biodiversity credits. Why did they spark controversy at COP16

During COP29 in Baku, particular attention is paid to global environmental financing, including the search for new, effective mechanisms to support nature conservation efforts. Meanwhile, the topic of biodiversity credits was raised during COP16 in Cali, sparking both interest as a potential tool for funding conservation projects and numerous controversies. Although these credits are presented as an opportunity to secure funds for ecosystem conservation, they have raised concerns among local communities and environmental organizations that see a risk of commodifying nature.

Concerns and fears of local communities

Indigenous communities and environmental organizations have voiced strong concerns about biodiversity credits. They argue that the introduction of such credits may lead to the commodification of nature, which would mean the privatization of resources traditionally regarded as common goods. For many indigenous communities, biodiversity credits pose a potential threat to their traditional lands and way of life, which is based on harmony with nature.

These credits may also encourage the exploitation of ecosystem resources in areas with high biodiversity, leading to conflicts over resource access and ultimately causing the degradation of natural habitats. Additionally, there is a risk that wealthy corporations will begin to monopolize these areas, undermining the principles of environmental justice.

The biodiversity credit market and issues with carbon credits

During COP16, similarities to the carbon credit market were also noted, which for years has faced criticism for lack of transparency, abuse, and data manipulation, often aimed at maximizing profits with minimal impact on emissions reduction. Concerns about biodiversity credits stem from the potential risk of repeating these mistakes. Without proper regulations and oversight mechanisms, similar problems could arise.

Experts warn that a lack of control could lead to falsifying ecosystem reports or granting credits for superficial actions that do not bring actual benefits to biodiversity. Without appropriate standards, there is a risk that funds from biodiversity credits will not be used for their intended purpose, resulting in only superficial environmental benefits.

Potential benefits of biodiversity credits

Despite numerous concerns, biodiversity credits are seen by some experts as a promising tool that could support conservation and restoration projects worldwide. These credits could enable the reclamation of degraded or threatened areas due to human activity, supporting global efforts to protect rare species, restore habitats, and expand protected areas.

From an investor’s perspective, biodiversity credits present an attractive opportunity to finance projects aligned with sustainable development principles. Investments in ecosystems are viewed as a high-potential area of growth that also brings environmental benefits. Biodiversity credits could encourage the private sector to actively participate in ecological projects, thus fostering a modern approach to financing nature conservation.

Biodiversity credits and global environmental goals

In the context of global challenges related to the climate crisis and environmental degradation, the issue of biodiversity credits takes on particular significance. International goals for 2030 and 2050 include expanding protected areas and halting species extinction. The introduction of effective legal frameworks and financial tools, such as biodiversity credits, could help mobilize resources for ecosystem conservation.

As COP16 participants noted, the success of this initiative would require implementing regulations to ensure the protection of local communities’ rights and transparency in investment processes. It is also essential to create mechanisms for monitoring the effectiveness of projects funded through credits, to ensure that actions taken truly contribute to biodiversity conservation and restoration.

Will COP16 make biodiversity credits a viable tool for nature conservation?

Discussions at COP16 showed that biodiversity credits are an innovative and controversial tool that could play a significant role in the global environmental protection strategy. However, for them to become a real support for biodiversity, it is necessary to include the voices of local communities and introduce high standards and oversight mechanisms. The future of biodiversity credits depends on whether they can be transformed into a tool supporting sustainable development and ecosystem protection—not just as an investment product, but above all, as an effective means of nature conservation.