Making Biodiversity Credits Work: Exploring Drivers, Incentives, Barriers and Challenges to the Development of Biodiversity Credit Schemes in Europe
(2025) In IIIEE Master Thesis IMEM01 20251The International Institute for Industrial Environmental Economics
- Abstract
- Biodiversity Credits have received substantial attention as an innovative financial mechanism that can attract private financial capital towards biodiversity conservation and restoration. To explore this potential, the thesis examines how key market actors perceive the drivers and incentives (RQ1), as well as barriers and challenges (RQ2) of this emerging market. To answer these questions, a qualitative analysis of 14 expert interviews was conducted within an originally developed framework. The findings reveal that the main drivers are political attention and regulation, and the main incentives are reputational benefits and financial returns. Furthermore, the main barriers are a critical perception of credit-based approaches and a shifting... (More)
- Biodiversity Credits have received substantial attention as an innovative financial mechanism that can attract private financial capital towards biodiversity conservation and restoration. To explore this potential, the thesis examines how key market actors perceive the drivers and incentives (RQ1), as well as barriers and challenges (RQ2) of this emerging market. To answer these questions, a qualitative analysis of 14 expert interviews was conducted within an originally developed framework. The findings reveal that the main drivers are political attention and regulation, and the main incentives are reputational benefits and financial returns. Furthermore, the main barriers are a critical perception of credit-based approaches and a shifting political climate, while the main challenges are the complexity of biodiversity and the fear of greenwashing accusations. The discussion highlights that the perception of biodiversity credits is shaped by the negative associations the interviewees showed towards related concepts and systematically examines the focus of the findings. The practical implications call for a clear taxonomy of use cases for biodiversity credits, an integrity-focused terminology, and collaboration to establish a track record of successful practices. Companies should consider biodiversity credits as an entry point to their engagement with their biodiversity impact, potentially leveraging them as a cost-effective insurance against biodiversity-related risks to their business models. States and supranational entities, such as the EU, are advised to take a more active role in shaping the biodiversity credit market, establishing a transparent, robust and science-based approach from the outset. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9209289
- author
- Basset, Lars LU
- supervisor
- organization
- course
- IMEM01 20251
- year
- 2025
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- biodiversity credits, drivers, incentives, barriers, challenges
- publication/series
- IIIEE Master Thesis
- report number
- 2025:22
- ISSN
- 1401-9191
- language
- English
- id
- 9209289
- date added to LUP
- 2025-08-12 13:43:20
- date last changed
- 2025-08-12 13:59:27
@misc{9209289,
abstract = {{Biodiversity Credits have received substantial attention as an innovative financial mechanism that can attract private financial capital towards biodiversity conservation and restoration. To explore this potential, the thesis examines how key market actors perceive the drivers and incentives (RQ1), as well as barriers and challenges (RQ2) of this emerging market. To answer these questions, a qualitative analysis of 14 expert interviews was conducted within an originally developed framework. The findings reveal that the main drivers are political attention and regulation, and the main incentives are reputational benefits and financial returns. Furthermore, the main barriers are a critical perception of credit-based approaches and a shifting political climate, while the main challenges are the complexity of biodiversity and the fear of greenwashing accusations. The discussion highlights that the perception of biodiversity credits is shaped by the negative associations the interviewees showed towards related concepts and systematically examines the focus of the findings. The practical implications call for a clear taxonomy of use cases for biodiversity credits, an integrity-focused terminology, and collaboration to establish a track record of successful practices. Companies should consider biodiversity credits as an entry point to their engagement with their biodiversity impact, potentially leveraging them as a cost-effective insurance against biodiversity-related risks to their business models. States and supranational entities, such as the EU, are advised to take a more active role in shaping the biodiversity credit market, establishing a transparent, robust and science-based approach from the outset.}},
author = {{Basset, Lars}},
issn = {{1401-9191}},
language = {{eng}},
note = {{Student Paper}},
series = {{IIIEE Master Thesis}},
title = {{Making Biodiversity Credits Work: Exploring Drivers, Incentives, Barriers and Challenges to the Development of Biodiversity Credit Schemes in Europe}},
year = {{2025}},
}