Biodiversity Credits: An Overview of the Current State, Future Opportunities, and Potential Pitfalls
ABSTRACT 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.
Authors
- Bo Jellesmark Thorsen (ORCID: https://orcid.org/0000-0002-3305-8343)
- Yitagesu Tekle Tegegne
- Megan Evans (ORCID: https://orcid.org/0000-0001-6763-310X)
- Andrea Pacheco (ORCID: https://orcid.org/0000-0003-2673-3037)
- Bart Muys (ORCID: https://orcid.org/0000-0001-9421-527X)
- Sophus zu Ermgassen (ORCID: https://orcid.org/0000-0001-6044-3389)
- Thomas White (ORCID: https://orcid.org/0000-0002-0536-6162)
- Martine Maron (ORCID: https://orcid.org/0000-0002-5563-5789)
- Trishna Dutta (ORCID: https://orcid.org/0000-0002-5236-2658)
- Joseph W. Bull (ORCID: https://orcid.org/0000-0001-7337-8977)
- Cecilia Fraccaroli (ORCID: https://orcid.org/0000-0002-4360-4926)
- Julia P. G. Jones (ORCID: https://orcid.org/0000-0002-5199-3335)
- Sven Wunder (ORCID: https://orcid.org/0000-0002-9422-0260)
- Alison Eyres (ORCID: https://orcid.org/0000-0001-7866-7559)
- Asger Strange Olesen
- Han Zhang (ORCID: https://orcid.org/0000-0002-0550-6604)
- Thomas Swinfield
Institutions
- University of Copenhagen (DK)
- University of Bonn (DE)
- Bangor University (GB)
- The University of Queensland (AU)
- University of Canberra (AU)
- Utrecht University (NL)
- University of Cambridge (GB)
- Leverhulme Trust (GB)
- UNSW Sydney (AU)
- University of Oxford (GB)
- European Forest Institute (ES)
- European Forest Institute (DE)
- UNSW Canberra
- Northwest A&F University (CN)
- Center for International Forestry Research (ID)
- KU Leuven (BE)
Publication Details
- Journal
- Business Strategy and the Environment
- Published
- 2025-06-17
- DOI
- https://doi.org/10.1002/bse.70018
- Citations
- 19
- Primary Topic
- Environmental Conservation and Management
- Type
- article
- Field-Weighted Citation Impact
- 43.60
Funders
- Horizon 2020 Framework Programme
- HORIZON EUROPE Framework Programme
- National Social Science Fund of China
- HORIZON EUROPE European Research Council