Nature finance and biodiversity credits: independent reference areas

ramet5 finds the areas of a landscape most comparable to a project area. It uses the satellite record to find those areas, not hand-picked variables. For biodiversity, those are the places to measure alongside the project. The question for biodiversity work is whether the protected area’s habitat did better than it would have done unprotected.

There are dozens of biodiversity credit schemes, and they measure biodiversity in very different ways. For belian.earth, the question underneath a biodiversity credit is the same as for every carbon credit: what would have happened without the project? How many frogs, butterflies or tigers would there be if no one had protected or restored the area? The question is the same, just for nature rather than carbon.

While this is exactly what we work on for carbon, it is much harder for biodiversity, because you cannot measure biodiversity from space. What you can measure from space is the landscape that biodiversity depends on. Habitat, its condition, its extent, its history of disturbance, and how all of that compares to similar places that were never protected.

Without reference areas, a project can only compare before with after: count everything before the work starts, count it again afterwards. That is the simplest kind of baseline, a time-zero baseline: it treats what was there at the start as what would have stayed. It is how a great deal of conservation science has been done. More extreme climate events make it work less well. If the years after are the hottest on record, the project looks like it failed when it did not. If the first years of the project are favourable climatically, it might look like the project is doing well, but that is hard to defend. The fix, which some biodiversity standards already use, is a counterfactual baseline: choose the most similar habitats as the reference areas, and measure biodiversity on the ground in both the project area and the reference areas. Ecologists call this design before-after-control-impact (BACI): the reference areas are the control sites. Measured over the same years, similar habitat controls for confounding climatic events in the results.