Abstract:

Aim: Biodiversity credit is the ecological measure of biodiversity gain and loss, quantifying the results of ecological conservation into standardized units that can be traded. Through the creation and sale of biodiversity credits, it can provide a market solution for biodiversity financing. 

Method: In order to understand the development of biodiversity credits mechanisms and the trend of evolution, the case comparison method is adopted to compare the international mechanism (the cases of the United States, Britain, Australia and other countries) with the domestic practice of Jiangxi Wetland Banking, Nanping Forest Banking, Lishui Eco-Credit Evaluation and Biodiversity-themed Green Bond from three aspects: credit accounting method, constraints & incentives policy, and market based model. Three deficiencies in China’s biodiversity compensation mechanism were identified: policy enforceability, scientific accounting, and market activity. The underlying reason behind these deficiencies lies in the compensation mechanism’s primary focus on economic compensation, which prioritizes “economic equivalence” while downplaying “ecological equivalence.” 

Conclusion: It proposes a three-step implementation pathway: First, develop methodologies to ensure scientific rigor, standardization, and transparency in quantifying biodiversity credits, with third-party certification to enhance market recognition. Second, facilitate successful bottom-up pilot transactions to provide essential decision-making support for top-down legal and policy frameworks. Efforts should be made on both sides. Supply Side: Enact national park legislation to grant conservationists the right to monetize conservation outcomes as biodiversity credits; Demand Side: Mandate developers to comply with specific obligations for achieving “no net loss” of biodiversity by revising the Regulations on Ecological Protection Compensation and the Environmental Impact Assessment Law. This includes incorporating core requirements such as quantifying biodiversity gains and losses, assessing ecological scarcity, implementing Mitigation Hierarchy and offsetting measures, and ensuring a credit validity period of ≥ 30 years. Only with “legal compulsion+market incentives” model successfully put into effect, can biodiversity credit become an effective mechanism to support high-quality development goals, and help make lucid waters and lush mountains become invaluable assets.

Key words: biodiversity credits, biodiversity offsetting, Kunming-Montreal Global Biodiversity Framework (GBF)