With species disappearing faster than at any time in modern history and public coffers running on empty, more governments are turning to market-like mechanisms to address the economic drivers of biodiversity loss.
In the past year, biodiversity offsets and compensation mechanisms worldwide totaled an estimated $3 billion – seven times the size of the global voluntary carbon market – according to Ecosystem Marketplace’s "2011 Update: State of Biodiversity Markets" report.
The issue of biodiversity conservation received global attention in 2010, the ‘International Year of Biodiversity’, which saw the launch of The Economics of Ecosystems and Biodiversity (TEEB) reports and the 10th Conference of Parties of the Convention on Biological Diversity (CBD COP10). Around the world, policymakers and business woke up to the real – and often irreplaceable – economic benefits that nature provides.
The 2011 Update highlights major developments in biodiversity offsets and compensation mechanisms over the past year, summarizing activity in North America, Latin America, Europe, Asia, and Africa.
Among the key findings:
- Biodiversity markets transact at minimum an estimated $2.4-$4 billion annually, and protect or restore at least 187,000 hectares (462,000 acres) each year. Actual market figures are almost certainly much higher, since about 80% of existing programs are not transparent enough to accurately estimate market size.
- Biodiversity markets exhibit great diversity in market and mechanism design – ranging from the EU-wide ‘no-net-loss’ biodiversity targets, to unconnected state-level programs in Australia, to protecting biodiversity through more traditional PES mechanisms in Central and South America.
- In some areas political will lags behind the need for biodiversity conservation. Brazil’s recent revision of its Forest Code threatens to dramatically weaken environmental protections and biodiversity market drivers, while in Alberta, Canada, the future of "no net loss" goals for the province’s wetlands are uncertain as industry groups lobby to dismantle existing policy.
- The vast majority of biodiversity market transactions take place in developed countries, with the US market being the largest – though Australia is catching up quickly – and Europe is on track to scale up the use of biodiversity offsets and compensation mechanisms in the coming years. Meanwhile, in developing countries, implementation is still in its early stages, with a few exceptions.
Read the report:
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