Designing a biodiversity credit accounting framework for environmental investment and financing

Ningyu Yan; Gengyuan Liu; Sergio Ulgiati; Zhifeng Yang

doi:10.59717/j.xinn-geo.2024.100089

The Innovation Geoscience > 2024 Vol. 2 > No. 3 > 100089

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Designing a biodiversity credit accounting framework for environmental investment and financing

1.
Guangdong Basic Research Center of Excellence for Ecological Security and Green Development, Key Laboratory for City Cluster Environmental Safety and Green Development of the Ministry of Education, School of Ecology, Environment and Resources, Guangdong University of Technology, Guangzhou 510006, China
2.
State Key Joint Laboratory of Environmental Simulation and Pollution Control, School of Environment, Beijing Normal University, Beijing 100875, China
3.
Beijing Engineering Research Center for Watershed Environmental Restoration & Integrated Ecological Regulation, Beijing 100875, China
4.
Department of Sciences and Technologies, University of Naples ‘Parthenope’, Naples 80143, Italy

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Corresponding authors: zfyang@bnu.edu.cn (Z. Y.); liugengyuan@bnu.edu.cn (G. L.)
Received Date: January 09, 2024

Accepted Date: July 22, 2024

Published Online: July 28, 2024

The Innovation Geoscience 2(3), https://doi.org/10.59717/j.xinn-geo.2024.100089 | Cite this article

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PUBLIC SUMMARY
1. Ecosystem productivity, networks, and human well-being were considered in a biodiversity credit accounting method.
  
  Among the 157 ecological restoration projects, approximately 66% achieved an improvement in biodiversity credit.
  
  It may take at least 10 years for the profits from a biodiversity credit transaction to cover the construction costs.
  
  Biodiversity credit accounting and trading will support the the Kunming-Montreal Global Biodiversity Framework.

ABSTRACT

ABSTRACT

Achieving biodiversity goals and targets poses a significant financial challenge due to biodiversity externalities. Efforts to address this challenge have focused on market-based solutions for biodiversity offsets to bridge the financial gap. However, accurately calculating biodiversity credits remains a barrier to promoting and implementing these solutions. Here, we propose an innovative accounting framework for biodiversity credits based on the emergy accounting approach. Emergy (spelled with an m) represents the biosphere work performed over time and space (ecosystem services) that supports species, human societies and economies, and is measured in units of solar equivalent energy (emergy, sej). This unified accounting method considers the perspectives of ecosystem productivity, ecosystem networks, and human well-being. We evaluated the biodiversity credits in 157 restoration projects and found several advantages in terms of differentiating project types and setting thresholds for biodiversity credit increases in restoration projects. Only 66% of the projects achieved biodiversity credit increases, and only 29% of the generated credit can be traded on the market. This study provides a scientific foundation for decision-making in ecosystem restoration management and contributes to broader biodiversity conservation solutions as well as to bridging the financial gap in achieving biodiversity goals.
- biodiversity offset /
- credit /
- ecological compensation /
- ecological restoration projects /
- emergy accounting

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Yan N., Liu G., Ulgiati S., et al., (2024). Designing a biodiversity credit accounting framework for environmental investment and financing. The Innovation Geoscience 2(3): 100089. https://doi.org/10.59717/j.xinn-geo.2024.100089

Yan N., Liu G., Ulgiati S., et al., (2024). Designing a biodiversity credit accounting framework for environmental investment and financing. The Innovation Geoscience 2(3): 100089. https://doi.org/10.59717/j.xinn-geo.2024.100089

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