The linear fossil-based economy of the industrial era has reached its limits, altering nature, climate and the environment to an unprecedented degree. The science is clear: we need to rethink our economy if we want to rewrite our future.
This requires addressing the past failure of our economy to value nature, creating nature-based-and-positive business activities and deploying financial capital accordingly. Transitioning from an extractive fossil-based economy to a regenerative economy powered by and prospering in harmony with nature - a circular bioeconomy - is the defining question of our times.
Businesses need to play a key role in this process – first by understanding their impacts and dependencies on nature, but ultimately by investing and working in symbiosis with nature to transform and rethink their value chains rather than to offset for its failures.
This process of transforming value chains, including the landscapes upon which they depend, is crucial to move towards a circular bioeconomy. It will be challenging depending on the sector, but it should be the final goal.
In parallel to the landscape-to-value chain transformation of key industrial sectors, which should be the central focus, we should develop high-integrity nature markets to enable private investment in nature conservation and restoration. They will allow businesses to transform while investing in landscapes to enhance the ability of land and freshwater and marine habitats to provide carbon, nature recovery, clean water and other benefits. For investment in nature markets to grow, those “producing” and purchasing need to have clarity and confidence in the principles and standards that should be used to structure investments. Clarity is also needed on the governance arrangements to ensure that these new, emerging markets will operate transparently and deliver benefits for nature, the economy, indigenous people and local communities.
Biodiversity credits raise high hopes of mobilizing funding to address the global biodiversity crisis – but its effectiveness will depend on its implementation and upscaling.
Our CBA policy brief sets out 10 principles for successful biodiversity credits, learning from previous experiences of the carbon markets.
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