How can carbon credits protect biological diversity?

May 22, 2023

Since the Industrial Revolution of the nineteenth century, human activities have led to a significant decline in biodiversity on a global scale. The International Union for Conservation of Nature estimates that 42,100 species are currently threatened with extinction, largely as a result of:

• Habitat loss and fragmentation, which are accelerated by urbanization, infrastructure development, resource extraction, and similar activities.
• Rising temperatures, which not all species can adapt to quickly enough, caused by increased greenhouse gas (GHG) emissions. This destroys vital habitats such as coral reefs and polar ice caps.
• Pollution and chemical contamination, which can disrupt ecosystems and cause long-term damage to habitats, especially harming aquatic organisms.

The three pillars of biodiversity—species, genetic, and ecosystem diversity—play a crucial role in maintaining the overall stability of ecosystems. An ecosystem with a high level of biodiversity is more resilient to environmental changes and enables its inhabitants to adapt to and recover from disruptions more quickly.

The International Day for Biological Diversity, which takes place on May 22nd each year, encourages people to recognize that functioning ecosystems and strong biodiversity are vital to all species living within them, including humans. Importantly, a diverse ecosystem is a strong ecosystem, better able to withstand environmental challenges such as natural disasters and the proliferation of invasive species. With biodiversity in decline, however, we face challenges not only for the aforementioned 42,100 species but for all human and non-human life.

The benefits of strong biodiversity

The Kunming-Montreal Global Biodiversity Framework—an outcome of the 2022 United Nations Biodiversity Conference and often termed the ‘Paris Agreement for Nature’—now gives humanity a framework within which to recognize the fundamental importance of biodiversity. Put simply, biodiverse ecosystems provide services that might be largely intangible to us but which are critical to our survival and wellbeing. These include:

• the purification of water and air;
• the formation of soil (which is an effective and cheap capturer of carbon);
• automated regulation of diseases and pests; and
• the provision of raw materials.

Additionally, as we have a natural connection to our environment, a loss in biodiversity can also lead to a loss of ties to the world we live in, leading to cultural and aesthetic deficits.

Restoring biodiversity is an ongoing challenge. Governments, organizations, and individuals work on addressing this subtopic of climate change—but, given that time is of the essence, functioning solutions available right now must play a key role in reversing the damage that has already been done. One such solution is the Voluntary Carbon Market.

The role of carbon credits in biodiversity

Carbon credits are traditionally used to offset GHG emissions caused by human activities in an effort to close the emissions gap. However, carbon credits can positively affect biological diversity as well—sometimes directly, sometimes indirectly—through the activities of the associated carbon projects. For example:

• Reforestation projects restore previously destroyed habitats (or create entirely new ones). They also sequester carbon, which lowers global temperatures over time.
• Renewable energy projects can replace energy generated by burning fossil fuels, which can reduce air and water pollution and thus enable various species to return to once destroyed habitats.

Not all carbon credits are intended to directly unlock benefits to biodiversity, of course. To ensure a credit can be used as a trusted means of maintaining or boosting biodiversity, reliable frameworks like REDD+ by the UNFCCC COP have been established.

REDD+ seeks to reduce emissions resulting from deforestation and forest degradation. Through the preservation of forests, habitats are protected and the services provided by their ecosystems are maintained. This can lead to positive impacts on biodiversity in the areas where REDD+ projects are situated, as well as a multitude of co-benefits.

As the recent open letter by Indigenous peoples in support of REDD+ states, Indigenous and community lands hold at least 22% of the carbon stored in tropical and subtropical forests, 17% of the total carbon stored in forests, and 80% of the world’s biodiversity. If we are to halt deforestation and keep global warming to 1.5°C by achieving a net-zero world, high-integrity climate finance must be scaled and channeled to Indigenous-led conservation efforts that have the preservation of biodiversity as a foundational aim.

As long as the project delivers on its vision, then, organizations and individuals choosing to support verified REDD+ projects can expect to support growth in biodiversity as well. In the Digital Carbon Market, such projects are well represented in the NBO, MCO2, and NCT pools. Examples include:

• The Pacajai REDD+ Project in Brazil, created to stop the deforestation of more than 130,000 ha of forest.
• The North Pikounda Project, designed to protect over 90,000 ha of unlogged, native Congolese forest from deforestation.

These and many more projects of a similar type are available on Carbonmark right now, and you can easily filter for Forestry projects if this is the type of carbon credit you are looking for.

The many different types, regions, and vintages also enable companies to support local communities, as organizations can choose which carbon project to support—whether that be on the other side of the world or in their proverbial backyard.

Blue carbon credits on Carbonmark

Beyond large-scale UN initiatives such as REDD+, some carbon projects specifically focus on improving biodiversity in very specific ecosystems. One great example of carbon credits with potentially large benefits to ecosystems and biodiversity are blue carbon credits. This type of credit focuses on conserving and restoring coastal and marine ecosystems, ranging from salt marshes to seagrass beds and mangroves. Through its partnership with Vlinder, Mangrove DAO recently made this type of credit available on Carbonmark.

The goal of this specific project is to restore roughly 2,260 hectares of degraded lands in Myanmar, ultimately aiming for the creation of a healthy mangrove ecosystem. This benefits biodiversity in this area while offering co-benefits such as poverty reduction by creating sustainable livelihoods in coastal communities. Indeed, such blue carbon credits can offer multiple benefits to their ecosystems:

• Numerous marine species feed, breed, and live in these areas. Restoring habitats increases biodiversity across a large number of different species, including fish and shellfish, birds, and other wildlife indigenous to mangroves.
• Mangroves are a natural barrier against natural disasters, providing shelter for marine organisms of all kinds. Seagrass improves water quality and helps maintain the local food chain.

Marine ecosystems also have high carbon storage potential, which allows them to capture and store substantial amounts of carbon in their sediment. This can indirectly affect biodiversity in a positive way on a global scale.

This practical example highlights benefits enabled by carbon credits that are available right now. Selling them on an open market allows this project to continue its work and protect the area against further degradation, thereby substantially boosting biodiversity via a virtuous circle effect.

Linking your success to carbon credits

Historically, human beings have not been successful at assigning value to ecosystems and their associated biological diversity. Unless they generate a financial return—such as through tourism activity or agricultural use—ecosystems and the diverse groups of species living within them have not been thought of as financially relevant, despite their unquestionable value to our entire planet.

Carbon credits, when created following strict, reliable standards, link a value not only to carbon removal or reduction but also to biodiversity and thereby ecosystems as a whole. They can play a vital role in conservation efforts, even if not all types of carbon credits directly address this goal.

Beyond the conservation and restoration of biodiverse ecosystems, companies which do engage in carbon offsetting activity through the use of carbon credits also benefit in immediately tangible ways, such as:

• more decisive reductions of their own emissions compared to companies not using carbon credits;
• a faster path to Net Zero enabled by the creation of consistent ESG goals; and
• the potential to generate higher returns compared to companies that do not act in an environmentally responsible way.

The International Day for Biological Diversity 2023 is an opportunity to familiarize yourself with the positive effects of carbon credits on biodiversity and how the portfolio of more than 20 million carbon credits on Carbonmark can help your organization reduce its GHG emissions.

If you are interested in helping your organization reach its ESG goals, contact us here.