Country Life: Dollars for nature - can biodiversity credits fix NZ's conservation woes?

If mud and dead things aren't your thing but you still want trees planted, pests killed and wetlands to flourish, you could pay others to do the hard slog through biodiversity credits.

Not to be confused with carbon credits, they are a way for private investors and corporations to pay others to save the skink or clean up sludgy streams and, in so doing, meet the expectations of a company's increasingly green customers.

A biodiversity credit market is something the government has been perusing for a few years now, given limited public funds to pay for the huge costs involved in protecting and restoring nature.

At Fieldays this month Associate Minister for the Environment Andrew Hoggard said farmers and other landowners were already doing their bit to protect biodiversity and wanted to do more.

"Supporting voluntary nature credits markets is a chance for the government to show them the carrot, not just the stick.

"We want to connect those caring for the land with investors who support conservation."

This week, Christchurch-based business consultancy Ekos launched its own biodiversity credit scheme, BioCredita, where investors can purchase bundles of credits to fund nature projects, including Sanctuary Mountain Maungatautari, a fenced eco-sanctuary in Waikato.

The project, covering 3363 hectares, costs $5000 daily to run and is hoping to fund operations through credits or units priced at $12 each, representing the cost of protecting one hundredth of a hectare.

The first buyer, according to Ekos' chief executive Sean Weaver, is a window manufacturer "who liked the idea of selling biodiversity-enriched windows".

"They can't do much biodiversity conservation in the factory, but they can support a nearby project, which is what they've done," Weaver told Country Life.

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The Ekos credits are measured, independently verified and registered, and the project monitored to ensure operators do what they say they're doing, Weaver said.

"We've built a standard called the Ecos SD standard, which defines all of the things you need to do in order to demonstrate the benefits that you're delivering. And then we've built a registry, a digital registry on blockchain technology, so that these units can be issued once they've been verified to the standard, and then they can be tracked and traced across."

Weaver stresses the credits, unlike carbon credits, are not for use to offset damage to the environment.

The Maungatautari project is among several pilot projects which the government is hoping to learn from. Others include a Silver Fern Farms project and Te Toa Whenua Northland which is transitioning around 100 ha from exotic forestry to native trees and includes pest control on iwi-owned land.

Foreign funding for local projects

A voluntary biodiversity credit market is just another tool for companies, both here and overseas, which want to fund New Zealand's conservation efforts, according to Hayden Johnston, GM for the Natural Environment at the Ministry for the Environment.

"We know that in New Zealand, companies are spending in the millions of dollars each year to keep up with either their regulatory requirements or claims that they want to make about their brands.

"I think people see New Zealand as a ... country that has high credibility in the international space, and I feel really confident that we could be creating some really high-end premium products or credits to be offered internationally.

"One of the key questions we've always had is, you know, who is going to buy these things, and what do they want to buy?"

Ekos' Sean Weaver said his scheme ultimately wants to attract foreign revenue to New Zealand which is seen as a hotspot for biodiversity.

"Imagine going to Europe and lassooing, I don't know, 10,20,30,40 hundred million dollars worth of demand from big actors in those economies so that we can create a fire hose of money to point at New Zealand conservation interests. That's really the goal here."

Greenwashing, commodifying nature?

But what about criticism the credits could be another vehicle for greenwashing - companies exaggerating or misleading consumers about their green credentials?

The integrity of biodiversity schemes is key, given the world's chequered experience with carbon trading. Already critics are flagging concerns around the nascent biodiversity credit industry, not just greenwashing - but scaleability, distaste at the "commodification" of nature and the risk of distracting governments from their funding obligations.

Johnston said the government hopes to develop "guardrails" by following the pilot projects' experience.

"Principles like transparency, so that the buyer knows exactly what they're buying; additionality, so that what they're buying is clearly an additional benefit from what would have happened otherwise; longevity, so that the action or the outcome will occur over a longish period of time."

A central registry for the credits is something they will be considering too, he said.

Weaver describes credits as a variation on philanthropy.

"Are they commodifying nature? No, they're not. They're commodifying the human labour and technology cost to look after nature. So no nature is being traded in these credits."

It's not a goldrush

Johnston said biodiversity credits could work well for farmers and landowners working collaboratively, say, in catchment groups, to fund things like fencing and pest control.

"One of the things I'm really keen we test is how you can do this in a way that is cost effective.

"We know that examples of projects that are using international verification, for example, can be quite costly, and we want to find ways to make this an available tool in New Zealand for New Zealand circumstances."

Weaver said the Ekos credits, which are tradeable, should not be seen as a goldrush, but essentially a form of sustainable financing.

"Everybody in the value chain, in our programme has to make a profit, but nobody is allowed to make a super profit, like an unjustifiable super profit.

"The main reason for that is that the end-user of biodiversity credits is buying a conservation outcome, and they want to be confident that they're funding the true cost of looking after the place, and not funding, you know, somebody's super profit that will help them just buy another yacht."

"Projects still need to go out and hunt for buyers, and our system is a new net to go fishing for that money," Weaver said.

Learn more:

Read submissions and discussion paper on a biodiversity credit system for NZ here.

Find out more about Ekos