In recent years, the term biocredits has gained attention as a potential solution to incentivize protecting and restoring natural ecosystems. While the concept is still relatively new, biocredits have the potential to provide a valuable tool for conservation and sustainable development efforts. Let’s explore what biocredits are, how they work, and their potential benefits and drawbacks.
What are biocredits?
Biocredits are financial instruments designed to support the conservation of biodiversity. They are similar to carbon credits, which are used to mitigate climate change, but instead of reducing greenhouse gas emissions, they are used to protect and restore ecosystems. Biocredits are created by assigning a monetary value to the ecosystem services a given land area provides, such as carbon sequestration, water purification, and wildlife habitat. These ecosystem services are then quantified and verified by an independent third party. The landowner can sell the resulting biocredits on a marketplace.
How do biocredits work?
To create biocredits, a landowner must first identify an area of land with significant ecological value and potential for restoration or conservation. This could include areas of degraded land that could be restored to their natural state or areas of intact habitat under threat from development or other human activities. Once the land has been identified, the landowner can work with a conservation organization or other third party to quantify the ecosystem services the land provides, such as carbon sequestration, water purification, and wildlife habitat. This is typically done using a set of standardized methodologies and metrics that have been developed specifically for the biocredit market.
Once the ecosystem services have been quantified and verified, the landowner can sell the resulting biocredits on a marketplace. The price of biocredits is determined by supply and demand, and can fluctuate based on a variety of factors such as the availability of credits, the demand from buyers, and the cost of implementing conservation or restoration measures. Buyers of biocredits can include individuals, companies, governments, and other entities that are interested in supporting biodiversity conservation and sustainable development.
What are the benefits of biocredits?
Biocredits have the potential to provide a number of benefits for biodiversity conservation and sustainable development. One of the key benefits is that they provide a financial incentive for landowners to conserve or restore ecosystems. This can be especially important in areas where traditional land use practices, such as logging or agriculture, may not be economically viable. Biocredits can also provide a source of funding for conservation organizations and other stakeholders who are working to protect and restore biodiversity.
Another benefit of biocredits is that they can help to promote the sustainable use of natural resources. By assigning a monetary value to ecosystem services, biocredits can help to shift the economic incentives away from activities that harm the environment and towards those that promote conservation and restoration. This can help to reduce the pressure on natural resources and promote sustainable development.
Finally, biocredits can help to raise awareness about the importance of biodiversity conservation and ecosystem services. By creating a market for these services, biocredits can help to demonstrate the economic value of intact ecosystems and the services they provide. This can help to build public support for conservation efforts and promote greater understanding of the linkages between biodiversity and human well-being.
What are the challenges of biocredits?
While biocredits have the potential to provide a number of benefits, there are also several challenges associated with their implementation. One of the key challenges is ensuring that the ecosystem services being quantified and verified are accurate and reliable. This requires the development of standardized methodologies and metrics, as well as independent verification mechanisms, to ensure that the credits being traded on the market are legitimate and represent real conservation.
ValueNature Biocredits – Preserving Biodiversity through Technology and Local Communities
ValueNature is a new company that wants to protect nature and recognize its value by using technology to measure, value, and trade “biocredits.” Biocredits are like certificates that show how much conservation work has been done on a piece of land.
The founders of ValueNature saw that there was a problem with how people were protecting nature. It was often expensive and bureaucratic, which made it hard for individuals and organizations to get involved.
ValueNature is working with a company called Conserve Global to identify areas of land in Africa that could benefit from better conservation management. They are also using a technology platform called Hedera Hashgraph to support their work.
How are biocredits valued?
The ValueNature biocredit methodology aims to create a composite biodiversity score called the ValueNature Score (VNS) to protect landscapes and seascapes. The VNS is made up of flora and fauna indicators of ‘intactness’ weighted by carbon stocks and the IUCN Species Threat Abatement and Restoration (STAR) metric. This helps to conserve threatened and endangered species while ensuring the persistence of biodiversity in the concession.
Measuring Flora and Fauna Intactness:
The flora and fauna intactness is determined by comparing the measured indicators to an equivalent ‘pristine’ site that is used as a reference baseline. Flora intactness will be measured using remote sensing technologies, including the Normalized Difference Vegetation Index (NDVI) of satellite imagery to create a metric of vegetation health and land use change. Additionally, factors such as erosion and bare earth exposure will be incorporated into the intactness measure.
Fauna intactness will be measured using camera traps and bioacoustics sensors deployed by locally employed ‘biodiversity custodians’. Bioacoustics sensors will allow for the measurement of aggregated soundscape saturation across identified habitats, creating a species diversity value for vocal animals like birds, bats, frogs and insects. Camera trap photos will determine species richness of larger mammals (>1kg in weight).
The Importance of the IUCN STAR Metric and Carbon Stocks:
The IUCN STAR metric evaluates the potential benefit for threatened species of actions to reduce threats and restore habitat. Carbon stocks provide additional weighting for the value of the site, including above-ground, soil and/or wetland carbon, calculated as metric tonnes per hectare. Satellite technology and geographic information systems will be used to remotely assess carbon stocks, reducing the need for expertise in the field.
The ValueNature Score and Digital Certification:
The VNS is inputted using a distributed ledger process to create proofs and validations for each piece of data created across each category, speeding up validation and verification processes while ensuring immutability of the data. A digital certificate is created to represent the biocredit, reducing double accounting issues while also providing transparency and traceability. The credit will have an annual Environmental, Social and Governance (ESG) reporting certificate issued, detailing the site characteristics, metrics, and data that are used to calculate the VNS, the biodiversity custodians supported, including IPs & LCs, and the traceability of financial flows.
ValueNature Biocredits Trading and Royalties:
ValueNature determines the initial offering price by evaluating the minimum amount required to adequately ensure the persistence of biodiversity in the concession for that decade at a specific and documented management standard. Additional incentive payments are made to IPs & LCs who live in or around the landscape or seascape, and fees are paid to the government where required. Of the sale price, 80% goes to biodiversity custodians (land managers/owners, IPs & LCs, and government), while the remaining 20% is reserved for biodiversity assessments, reporting and certification, and trading of the digital certificates.
The acquirer (buyer) will be able to relist and sell the digital certificate during the ten-year time span of the credit development, and royalties will be allocated to the biodiversity custodians. At the end of the ten-year period, final assessments will be completed, and the digital certificate for each hectare is ‘minted’ as the final biocredit, which is held by the final owner as an asset. Credit owners have first rights to purchase the next ten-year credit period, which ultimately has a rolling 30-year permanence window.
Written by: Akarsh Pasi
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