Abstract
Abstract
Biodiversity credits (BCs) are one innovative financing scheme that the Global Biodiversity Framework proposes to mobilise private capital and narrow the biodiversity financing gap. BCs and the voluntary biodiversity markets (VBMs) around them are nascent, offering an opportunity to learn from shortcomings of the adjacent voluntary carbon markets and design them for both ecological and social integrity from the outset. This paper examines the requirements for the effective functioning of BCs and VBMs at the unit and market levels. We propose a requirements framework based on a horizon scan and semi-structured interviews with market participants. Key five unit-level criteria, comprising four environmental integrity criteria (measurement and monitoring, durability, additionality and leakage minimisation) and one social integrity criterion (environmental and social safeguards), are proposed. At the market level, three components underpin functioning VBMs: clearly defined, fairly allocated and easily transferable rights. Building on lessons from carbon markets, we derived mitigation measures to guide the development of an improved market architecture.