Global demand for biodiversity credits, or ‘biocredits’, is growing among governments, people and businesses, according to a research paper for the United Nations (UN).

A biocredit is a similar concept to a carbon credit, but is used to incentivise nature conservation and restoration.

According a recent research paper published by the International Institute for Environment and Development (IIED), a body that works closely with the UN, biocredits can complement carbon credits but are most effective as their own asset.

The paper examined three existing biocredit schemes in various parts of the world and outlined the main challenges to “implementing an effective biocredit market”.

These challenges include how to fairly measure a ‘unit’ of biodiversity; how to generate sufficient demand and sales of biocredits; and how to channel revenue from biocredits to communities most effected by biodiversity loss.


A biocredit represents a unit of biodiversity that is being restored or preserved. They are designed to be bought and sold with the aim of channelling money towards effective biodiversity conservation and supporting locally-led action.

The function of a biocredit can be divided as follows:

  • Preserving or avoiding loss of biodiversity (whereby biocredits are applied to an ecosystem, landscape or seascape that already have high levels of biodiversity and that is under threat);
  • Restoration (whereby biocredits are applied to an ecosystem or landscape that requires restoration for biodiversity regeneration);
  • Supporting existing efforts (whereby biocredits are used to reward existing management efforts).

Biocredits can be supplied through various entities, including conservation organisations, enterprises, public landowning agencies, and private landowners.

Theoretically, they can be supplied by any organisation, government or individual that is trying to restore or preserve biodiversity.

Buyers of biocredits will often be driven by corporate commitments to nature-related targets.

The three examples of biocredit schemes referenced in the IIED paper each measure biocredits as a unit of land (either 1ha or 10m2). The biocredits in those schemes are maintained for between 10 and 20 years.

However, the paper calls for the further incorporation of social and cultural valuation of biodiversity, including variables that acknowledge traditional and cultural knowledge and valuation of biodiversity.

This includes working with local communities to determine how traditional and cultural knowledge can be translated into an indicator that can be used as a metric.

The paper also outlines the importance of generating sales while avoiding greenwashing.

It advises the use of targeted marketing and also screening buyers to ensure that the biocredit is not being purchased to offset damage elsewhere.

The paper also emphasises the importance of transparency in order to ensure the local communities are seeing the financial benefit of a biocredit market.