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Habitat Banking

An interesting report crossed my virtual desk last week from Climate Change Capital, an outfit I've known for a while through their alternative energy funds. They're also heavily involved in carbon markets, from where this latest idea takes its inspiration. Their basic premise is pretty straightforward; current efforts to halt biodiversity loss in the UK are failing. Rather than continuing to make grand sounding gestures, setting increasingly impossible targets and introducing more subsidies (sound familiar?!), they are suggesting a radical new approach to tackling the problem, and one which very much chimes with one of the core aims of Habitat Aid. The report's authors argue that the public and charity sectors alone, particularly at the moment, cannot generate enough capital to halt the loss of biodiversity we are experiencing. We must massively scale up the private sector's involvement in ecological restoration. This could be done through a system of biodiversity debits and credits, where "a debit is unavoidable and residual damage to biodiversity, and a credit is an additional action to benefit biodiversity". These credits would need to be "delivered" by Habitat banking - in other words, they would need to be tradeable. Creating a workable and robust market with environmental integrity would be a huge challenge; it would need to be considerably more complex than the carbon market. For a start, the creation of a common unit, which the paper argues would be essential to attract investment, is fraught with difficulty. Kick starting a market like this would be simple though, through a combination of legislation and corporation tax relief for purchases of excess credits, for example. This might seem completely bonkers, but it is being discussed in Europe and to my mind deserves serious consideration. Something different needs to be done, and done quickly. Of course people like Climate Change Capital have a commercial interest in promoting a potential solution like this - that's the point.