Abstract:

Background & 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. To elucidate the evolutionary trajectory and developmental trends of biodiversity credit mechanisms, this study employs a comparative case study approach. It contrasts international frameworks—specifically those implemented in the United States, the United Kingdom, and Australia—with domestic initiatives in China. These include the Jiangxi Wetland Banking, Fujian Nanping Ecological Banking, Zhejiang Lishui Eco-Credit Evaluation, and biodiversity-themed green bonds. The analysis is structured around three key dimensions: the methodology for credit accounting, the system of constraints and incentives, and the market-based operational model. Analysis of China’s biodiversity compensation mechanism has revealed that three aspects need to be improved: weak policy enforceability, non-standardized scientific accounting, and insufficient market activity. The root cause of these shortcomings can be attributed to the mechanism’s predominant focus on economic compensation. This approach prioritizes “economic equivalence” at the expense of “ecological equivalence”, thereby failing to ensure the functional integrity of the ecosystems being compensated.

Suggestions: We propose 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 (KMGBF)