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

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

Journal of Industrial Ecology, 2024, vol. 28, issue 4, 1009-1021

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.

Date: 2024
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