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Biodiversity Credits: An Overview of the Current State, Future Opportunities, and Potential Pitfalls

Author

Listed:
  • Sven Wunder
  • Cecilia Fraccaroli
  • Joseph W. Bull
  • Trishna Dutta
  • Alison Eyres
  • Megan C. Evans
  • Bo Jellesmark Thorsen
  • Julia P. G. Jones
  • Martine Maron
  • Bart Muys
  • Andrea Pacheco
  • Asger Strange Olesen
  • Thomas Swinfield
  • Yitagesu Tekle Tegegne
  • Thomas B. White
  • Han Zhang
  • Sophus O. S. E. zu Ermgassen

Abstract

Biodiversity credits are an emerging vehicle for pro‐environmental financing, yet much uncertainty remains around how and when they could boost biodiversity conservation. Here we define what biodiversity credits are and explore impact pathways through a proposed theory of change. Based on evidence from 34 pilot projects and a review of lessons from related market‐based incentives for conservation, we further explore potential opportunities and pitfalls, including future supply and demand, bundling/stacking options, and needed social safeguards. We explore how biodiversity credits can better tackle challenges linked to additionality, permanence, leakage, and commensurability. While new monitoring technologies can help quantify biodiversity, trade‐offs exist between simple metrics enabling liquid markets and costlier ones more adequately representing biodiversity. To avoid past mistakes, sound credit design and implementation require more robust crediting baselines, standards, governance, and impact evaluation. Quality credits will be more expensive than those cutting integrity corners, which may dampen the expected biodiversity credit boom.

Suggested Citation

  • Sven Wunder & Cecilia Fraccaroli & Joseph W. Bull & Trishna Dutta & Alison Eyres & Megan C. Evans & Bo Jellesmark Thorsen & Julia P. G. Jones & Martine Maron & Bart Muys & Andrea Pacheco & Asger Stran, 2025. "Biodiversity Credits: An Overview of the Current State, Future Opportunities, and Potential Pitfalls," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 8470-8499, November.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:7:p:8470-8499
    DOI: 10.1002/bse.70018
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    References listed on IDEAS

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