An influential biodiversity market may not direct investment toward habitats of national importance

Abstract Biodiversity markets are proliferating globally, aiming to increase private investment to address conservation financing gaps. Markets commodify biodiversity to facilitate the trade of biodiversity “units” even across heterogeneous ecologies. However, the metric used to commodify biodiversity can strongly influence which habitats become valuable in biodiversity markets, and there has been little research on whether the biodiversity incentivized through markets maximizes conservation value or is aligned with higher‐level conservation goals. Here, we address this gap by using an ambitious national biodiversity market as a case study. We calculated the value of habitat transitions in England's Biodiversity Net Gain metric to investigate which habitats deliver biodiversity gains from common habitat baselines and explored how well these habitats aligned with those outlined in national conservation targets. Our results suggest that the biodiversity metric works well to incentivize avoidance of biodiversity impacts, but without policy coordination, the investment generated by biodiversity markets risks being allocated toward activities that do not maximize conservation potential.