Last week, whilst speaking at the European Parliament about the need to “put a price on nature”, physicist and ecologist Vandana Shiva momentarily left the stage to demonstrate her stance. “I have dedicated 50 years of my life to the protection of biodiversity, it has always been a fight against commercialisation,” V. Shiva emphasised upon returning to the microphone. “When the British arrived in India, they turned all Indian land into a commodity.”
The discussion held on Tuesday (16 May) was part of the three-day “Beyond Growth” conference, which involved EU commissioners, including the President of the European Commission, Ursula von der Leyen (Ursula von der Leyen), as well as academics, activists, and high-level policymakers, to discuss Europe’s “green growth” trajectory. V. Shiva left the conference when the special envoy for the World Wide Fund for Nature (WWF), Marco Lambertini (Marco Lambertini), took the floor, as he was reserved in his speech on the subject.
Others, however (unlike V. Shiva), did not find his speech surprising. In fact, the WWF envoy’s message—that the market and private capital will need to get involved to protect large natural areas and biodiversity—has become popular. EU commissioners have been defending this for more than a decade.
At the UN COP15 world biodiversity summit held last December, the governments of 188 countries agreed to protect at least 30% of the world's biodiversity-rich land, lakes, coastal areas, and oceans.
“We are being misled about ecology”
At the heart of this plan are biodiversity offset markets. The biodiversity offset and credit market, referred to as the Kunming-Montreal Global Biodiversity Framework (GBF), was mentioned as one of the methods to “mobilise at least 200 billion US dollars by 2030” to “close the funding gap” for biodiversity strategies.
This vision promotes the monetary valuation of nature (by putting a price on “ecosystem services”) and the possibility of offsetting the loss of nature.
“We are undervaluing nature from an economic perspective,” pointed out M. Lambertini. “Currently, value only exists for dead nature. A tree becomes valuable when it is cut down. Fish are only valuable when they have been caught.” He added that valuing nature as an “asset” could help prevent ecological destruction by making nature conservation more profitable.
On the other hand, ecologist and economist Clive Spash (Clive Spash) said that putting a price on nature “confuses our understanding of ecology”. “Conservation is about ecosystem integrity. It is about protecting everything, not just what humans like the most,” he added, arguing that strict regulation is the best way to avoid the demise of nature.
“Greenwashing”
Underpinning the discussion about treating nature as an asset class is evidence of the presence of “greenwashing” (greenwashing).
“Polluter pays” schemes already exist as carbon offset markets, which are worth over two billion euros and are used by consumers wishing to mitigate their harmful impact. Large international corporations, such as Shell, Disney, Netflix or, as recently reported by the newspaper Guardian, the band Pearl Jam, also offset their pollution. This is done by specialised companies that allow for the trading of so-called carbon credits. Each credit represents a specific reduction in carbon dioxide by planting trees or preventing deforestation.
Offsetting schemes are increasingly coming under scrutiny
A recent audit of the world’s leading carbon emissions standard, Verra, found that more than 90% of the rainforest offset “credits” sold to the aforementioned companies did not, among other things, correspond to genuine carbon emission reductions and should not have been approved.
Verra has denied these findings, but the results were confirmed by two independent research groups, one from the University of Cambridge and investigative journalists from the German weekly newspaper Die Zeit and the non-profit journalistic organisation SourceMaterial.
Barbara Haya (Barbara Haya), director of the Berkeley Carbon Trading Project, who has been studying carbon credits for 20 years to find a way to make the system work, told the Guardian that the implications of the study are “very serious”, adding that “these problems exist in almost all types of conservation credits”.
“Carbon offsets are ‘hot air’,” said Frederic Hache (Frederic Hache), director of the independent think tank Green Finance Observatory, on 16 May. However, the biodiversity offset system is being actively promoted worldwide.
The current state of affairs
In Australia, a process is underway to establish a nature repair market. The United Kingdom will launch a biodiversity offset programme in November.
France recently collaborated with the UK and Gabon, with the support of the World Bank and Walmart, to create a biodiversity certificate market.
In April, the EU Commission updated its sustainable investment taxonomy to include biodiversity offsetting as a way for companies to obtain green status under the EU labelling system.
The Platform on Sustainable Finance, one of the expert groups advising the commission, called on the EU to abolish biodiversity offset markets in a feedback report in May 2023.
Green NGOs, such as Carbon Market Watch, have also called for a complete ban on the offset market. The European Union, however, has shown no desire to change course so far.
In March of this year, while presenting new legislation aimed at tackling “greenwashing”, Environment Commissioner Virginijus Sinkevičius stated that the European Union is “not going to ban the carbon offset trade”. However, he admitted that there is a “significant risk: carbon emission reduction schemes can lead to ‘over-crediting and double-counting’”. Ecologists warn that these risks could be even greater if applied to the much more complex issues of biodiversity.
Millions of species
“There are only six forms of carbon, but there are millions of species,” points out F. Hache. “If you think carbon offsetting is bad, then simplifying the complex web of interdependence that is life will create incomparably worse environmental outcomes.” He explained that there is no scientific justification for the effectiveness of biodiversity offsets, for example, by replacing lost habitats by restoring a similar habitat elsewhere as a way to compensate for losses.
“Replacing a flamingo habitat in southern Spain to make room for an airport, and restoring it nearby, rarely yields results because we are unable to restore all the functions of the destroyed ecosystem,” added F. Hache.
A recent study in Sweden of 40 such offset projects found that ecosystem losses “were never evaluated”.
Offset markets “distract from the need to implement stricter environmental regulation” and from the need for wealthy countries and corporations to “limit harm”. Like V. Shiva and Spash, F. Hache also believes that policymakers should focus on “stricter environmental regulation”.
“We definitely do not need to put a price on nature to implement a sensible conservation policy,” noted Green Finance Observatory director Frederic Hache.