The Current Column

International Day for Biological Diversity

Biodiversity credit markets: Commodifying nature's complexity?

Rodríguez de Francisco, Jean Carlo
The Current Column (2026)

Bonn: German Institute of Development and Sustainability (IDOS), The Current Column of 18 May 2026

Bonn, 18 May 2026. Biodiversity credit markets are gaining traction, but they cannot protect what they cannot fully understand.

Biodiversity credits are financial instruments designed to channel private capital toward verified conservation and restoration outcomes, enabling companies to support nature-positive claims and manage nature-related risks. Credits are issued against measurable biodiversity gains and purchased on biodiversity markets, with revenues flowing to project implementers. Their role in helping the Global Biodiversity Framework is set to feature prominently at the 17^th UN Biodiversity Conference. The idea is appealing: define a unit of biodiversity, assign it value, and create a market that generates funds for conservation. Yet the market cannot protect what it cannot fully measure, value, or understand.

For biodiversity to be tradable, it must be reduced to a composite score — a "biodiversity unit" — yet there is no global consensus on how to construct it. More than 570 different biodiversity metrics exist, each reflecting competing choices about what aspects of nature matter most. A biodiversity unit combines indicators such as species richness, habitat distinctiveness, site area, ecosystem structure, condition, and location. This simplification is not neutral: gains in one indicator can offset losses in another. For example, increases in a few generalist species can mask the decline of rarer, more sensitive ones, producing a unit that obscures real ecological trade-offs. Proponents frame this proliferation as a developmental stage comparable to early carbon markets. But the analogy fails: carbon relies on a single universal metric — a tonne of CO2 equivalent. For biodiversity, any such metric inevitably blurs socio-ecological value, which is inherently context-dependent and place-specific. The proliferation of methods signals that there is no neutral unit, only competing choices about what to count and what to ignore. The UK's Biodiversity Net Gain metric illustrates what these choices conceal: as a condition for planning permission, developers must demonstrate a 10% net gain for 30 years, yet the metric can reward habitat creation in one location while masking irreversible losses of ecosystems elsewhere.

Markets require exchangeable units within and across scales, but biodiversity is inherently site-specific. Ecological functions operate across larger, interconnected systems that cannot be reduced to discrete parcels of land. The Amazon generates flying rivers of water vapour that travel by wind, bringing rainfall to distant regions of South America — connections that remain invisible to any scoring methodology.

Indigenous Peoples and Local Communities hold place-specific knowledge that standardised metrics cannot fully accommodate: species interdependencies, seasonal dynamics, and the cultural significance of particular habitats. Even where schemes include stakeholder engagement requirements, these provisions remain structurally subordinate to the credit calculation itself. In Colombia, even community-focused schemes risk repeating carbon market harms — unfair contracts and funds failing to reach communities. The problem goes beyond implementation: Indigenous Peoples are included in governance bodies but often lack real influence over what gets measured and how value is defined. As an Indigenous leader noted, the goal of scaling these markets was predetermined, making participation largely symbolic. As a result, communities may be consulted yet have no say over what is measured or valued, making these markets socially unjust.

Although framed as nature-positive tools, the distinction between biodiversity credits and offsets collapses in practice. Three of the fifteen operational biodiversity credit schemes, including those by the UK and Indian governments, explicitly allow their credits to be used for offsetting. Colombia illustrates this starkly: voluntary credits have effectively become an extension of mandatory offsets introduced in 2012, with habitat banks marketed to extractive industries. Market data confirms that genuine nature-positive demand remains low: of roughly 11.6 million credits issued or projected, only 124,183 have been sold and just 1,285 retired. As the carbon market has shown, additionality failures, leakage, and human rights abuses can fatally undermine trading systems, and biodiversity's greater complexity makes these problems more intractable still.

Biodiversity loss is not a market failure that better pricing will solve, but a structural consequence of an economic system whose growth imperative drives ecological overshoot beyond planetary boundaries. Responses must therefore go beyond pricing reforms to include post-growth approaches, structural measures such as debt cancellation and subsidy removal; and rights-based approaches including legal recognition for nature and Indigenous and Traditional Territories.