Nature credits: opportunities, risks and preconditions for nature restoration
As part of the Nature and Economy strategic project, INBO reviewed the EU document ‘A roadmap towards nature credits’. This EU roadmap examines how nature credits can contribute to the financing of nature restoration. With this plan, the European Commission aims to attract more private capital for projects that strengthen nature. Anyone who carries out a nature restoration project with a measurable impact, or invests in it, will be rewarded for doing so.
The INBO review concludes that nature credits have the potential to mobilise additional funding for nature, but points to the scientific knowledge about the risks: credit systems can cause ecological and social damage. For nature credits to work well in a voluntary market, the bar for their effectiveness (for nature restoration) often needs to be lowered. Moreover, the focus on market-based nature credits in the search for funding for nature restoration distracts attention from more effective – but politically more difficult – financial innovations, such as the reallocation of environmentally harmful subsidies. Research shows that the funding gap for nature restoration is small in comparison with the public funds that go to environmentally harmful activities.
The INBO review therefore recommends that nature credits be more clearly framed as a complementary instrument, embedded in scientific knowledge about financing mechanisms, and with more attention to the known risks. Nature credits can certainly help facilitate new financing flows, but public investment and strong regulation remain indispensable for making real progress towards a sustainable economy with less impact on nature.
>> Read the full review on the EU website.