A metric for tradable biodiversity credits quantifying impacts on global extinction risk

Axel G. Rossberg, Jacob D. O'Sullivan, Svetlana Malysheva, Nadav M. Shnerb

Research output: Contribution to journalArticlepeer-review

Abstract

The difficulty in identifying appropriate metrics for the impacts organizations have on biodiversity remains a major barrier to the inclusion of biodiversity considerations in environmentally responsible investment. We derive and analyze a simple metric: the sum of the proportional changes in the global abundances of species caused by an organization, with a regularization to cover the case of species close to extinction. We argue mathematically that this metric quantifies changes in the mean long-term global survival probability of species. The metric thus supports the objective “to significantly reduce extinction risk” of the 2022 Global Biodiversity Framework and allows organizations to set themselves corresponding science-based targets. We show that in a perfect market trade in biodiversity credits quantified by our metric would lead to near-optimal allocation of resources to species conservation. We further show that metric values are quantitatively convertible to several other metrics and indices already in use. Barriers to adoption are therefore low. Used in conjunction with metrics addressing ecosystem services and integrity, potential areas of application include biodiversity related financial disclosures and voluntary or legislated biodiversity credit or no net loss policies.

Original languageEnglish
JournalJournal of Industrial Ecology
DOIs
StateAccepted/In press - 2024

Bibliographical note

Publisher Copyright:
© 2024 The Author(s). Journal of Industrial Ecology published by Wiley Periodicals LLC on behalf of International Society for Industrial Ecology.

Keywords

  • biodiversity credits
  • diffusion approximation
  • extinction risk
  • industrial ecology
  • Living Planet Index
  • nature positive

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