With low confidence in the environmental credit system, a new report coinciding with a government consultation outlines how to build a robust and transparent sector before it’s too late.
The Nature Markets Dialogue [NMD], which brings together 169 specialists working in 147 private and public sector organisations, has published a new paper.
Its Findings and Proposals report takes into account 12 months of wide-ranging engagement on developing a fit-for-purpose nature market. Calling for greater transparency and integrity, those behind the research believe this is the only way to save the beleaguered environmental credit system from collapsing, with confidence already low.
Unveiled as Downing Street begins its Voluntary Carbon and Nature Markets consultation, both emphasise the urgent need for more private investment to stop the decline of biodiversity and ecosystems across the UK. The fear is that without reform, this will not happen due to concerns the current system is not fit for purpose and is leaves room for abuse and manipulation.
Key findings in the report include:
- Scale follows integrity: An enduring governance framework is essential if markets are to grow. The lack of a robust framework has resulted in a widespread lack of confidence, exacerbated by past failures in the voluntary carbon markets. Governing a market in credence goods like nature, with complex and hard to measure benefits, is not easy but a solution has been found
- Markets can accelerate nature recovery: they are tools to help land managers to restore and conserve ecosystems, they are not simply for offsetting nor are they replacements for statutory environmental protections
- Integrity is multi-dimensional: environmental projects must be scientifically robust, the credits they generate must quantify the actual nature benefits being delivered, the participants in the market must be complying with agreed standards, and the buyer must be using the credits to make valid claims
- ‘Stacking’, the selling of multiple benefits from one project, can be valuable if well-governed
A new Nature Market Governance Scheme has instead been proposed, which NMD and parent organisation Broadway Initiative argue strikes a better balance between government oversight and industry leadership. This would be based on the following principles:
- Legal Foundation: a statutory basis to define market roles, rules, and responsibilities
- Independent Oversight: a governance body to enforce compliance, ensure transparency and prevent conflicts of interest
- Landholder Rights: clarity over rights to trade nature-based benefits and use credits
- Scientific Underpinning: a formal process for reviewing and approving metrics and standards
- Accountability: ongoing monitoring and periodic review by government
‘If we don’t have legislation, we have nothing,’ said NMD chair, Peter Young. ‘No other billion pound scale investment market is unregulated, so why should nature be different? Government must act quickly to restore both business and environmental-sector confidence.
‘We have identified how all parties can play their part in establishing the market mechanisms to allow both regulated and voluntary transactions to operate with integrity,’ he continued. ‘By bringing transparency to insetting as well as external markets, we prevent greenwash and unlock real funding for nature recovery. It is a regulatory failure not a market failure that impedes private funding for nature, so Government must play its part, unlocking the only credible route to reversing nature’s decline.’
Image: Johann Siemens / Unsplash
More on Biodiversity, Climate Change, Nature and Sustainability: