At RRG Nature Based Solutions (NBS), as consultants, designers, developers, and operators of biodiversity-rich regenerative systems, we have engaged in extensive discussions with industry experts and fellow practitioners to explore the potential involvement of regenerative farms in the voluntary biodiversity credit market. These conversations have yielded several thought-provoking questions that we believe merit broader consideration and dialogue.

To share our insights with our wider community, we are launching a three-part series:

• This first post is dedicated to nature positive agriculture in the Global Biodiversity Framework and highlighting the role of biodiversity credits in scaling-up regenerative and agroecological approaches. 
• The second post will explore questions and key considerations concerning additionality criteria, pricing, monitoring, and evaluation of biodiversity credits, specifically within the agricultural context.  
• Scaling the biodiversity credit market is as much about increasing the pool of suppliers as it is about increasing the pool of buyers. The final post will explore how AI and digital technologies could play a critical role in making the process of developing biodiversity credits more accessible (i.e., less burdensome and less expensive) for farmers.

The nexus between agriculture and biodiversity conservation

Agriculture and food production are at the top of the conservation agenda. Agricultural lands not only occupy half of the world’s habitable land, but in the highly fragmented landscapes that characterize almost all of the world’s terrestrial surface, agricultural landscapes can facilitate or prevent migrations between fragments of natural ecosystems, and therefore are extremely important for the conservation of biodiversity within these fragments.

Recent reports such as the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES 2019), the Intergovernmental Panel on Climate Change (IPCC 2023), and the Farming with Biodiversity Report (WWF 2021) highlight the need to radically transform our farming and land management practices to protect and restore nature. Agroecological and regenerative approaches are increasingly recognized for their potential to enhance biodiversity while improving a farm’s profitability. However, scaling up these practices requires greater support than currently available and an enabling environment to overcome existing challenges.

Those of us working in this field know that farmers and food producers, as stewards of the land, are willing to adapt their practices with a long-term view towards biodiversity and soil and water health to the extent to which markets and the policies under which they operate understand and reward strong stewardship practices. Farmers typically operate on thin margins – low commodity prices, combined with rising input costs, can lead to stagnation or decline in overall farm profitability. Thus, implementation cost (or perceived cost) is amongst the main barriers to scale up agroecological and regenerative approaches.  Furthermore, without strong regional farmer training programs and peer networks that demonstrate successful and profitable models, farmers often perceive a high financial risk in adopting new practices.

To drive a large-scale transition from extractive to agroecological or regenerative agriculture, farmers need to retain or even enhance profitability during and after the transition. There is no single silver bullet; both the public and private sector need to take action. Eliminating harmful subsidies and negative incentives (like taxing land with natural habitat cover), developing secure markets, ensuring price premiums, and accessing ecosystem services markets are all essential to reduce risk and incentivize farmers’ transition.

The role of biodiversity credits in incentivizing uptake of regenerative farming

 Biodiversity credits, or biocredits, are used to finance actions that result in measurable positive outcomes for biodiversity, through the creation and sale of biodiversity units. They are a financial tool that could help reduce perceived risk and incentivize farmers’ transition. They are not to be confused with  biodiversity offsets, which are specifically designed to compensate for the residual biodiversity impacts of a project, after a mitigation hierarchy has been applied.

The biodiversity credit market has been gaining traction since the end of 2022, when about 200 countries signed the Kunming-Montreal Global Biodiversity Framework, or “the Paris agreement for nature”. Surprisingly, however, agricultural projects are out of the scope of the  biodiversity crediting schemes and initiatives being developed so far, which are focusing mostly on conservation projects.

Those of us who h ave witnessed the remarkable transformation of a degraded land into a fertile and biodiversity rich agroecosystem know that measurable and verifiable gains on biodiversity are possible in productive agricultural projects, and there does not need to exist a dichotomy between co nservation and food production.

Dozens of biodiversity studies in shaded coffee and cocoa agroforestry systems provide solid evidence that biodiversity (e.g., soil microorganisms, epiphytes, ants, butterflies, beetles, spiders, birds, bats, rodents, amphibian, and reptiles) improves with an increase in the density and diversity of shade trees (see for example Perfecto et al., 2003). Our own research experience confirms this.

In 2022, we conducted a biodiversity assessment on an Andean Cacao farm undergoing certification under the Climate, Community and Biodiversity standards from Verra. This farm contained 75% of the reptilian, amphibian, and mammalian fauna, along with 48% of the avian fauna characteristic of the Colombian savanna ecosystem due to the farm’s tree cover and landscaping features such as windbreaks and riparian corridors.

Shaded coffee or cocoa agroforests are not the only agroecosystems capable of harboring important levels of biodiversity. The worlds classical grain-production systems, such as, wheat, corn, and rice – which are typically cultivated as monocultures and are inherently less biodiverse – still have the potential to facilitate movement of organisms among fragments of natural habitat. This is possible if two key conditions are met: (1) the substantial reduction or elimination of pesticide usage; and (2) the integration of landscaping features into the agroecosystem. These features may include scattered trees or shrubs, biological corridors, live fences, hedgerows, flower strips, windbreaks, riparian vegetation, semi-natural habitats, among others. By adhering to these practices, annual cropping systems can provide high quality landscapes through which migrations may occur, and they can function as sources of food and resting sites, making them important contributors to biodiversity restoration and conservation.

Nature positive agriculture plays a crucial role in the Global Biodiversity Framework (GBF). Well designed and managed agricultural systems can make a major contribution to conserving and restoring 60% of the planet’s land area by 2030 (GBF’s Targets 2 and 3). By scaling-up nature-based solutions such as regenerative agriculture that integrates landscaping features, we can conserve and restore biodiversity in agricultural lands, enhancing ecosystem functions and services  that are vital for the resilience and long-term efficiency and productivity of agricultural production systems, food security, and maintaining nature’s contributions to people, therefore aligning with GBF’s Target 10 on enhancing biodiversity in agriculture, aquaculture, fisheries and forestry. To facilitate this transition, public and private incentives are essential, with biodiversity credits emerging as a promising tool as mentioned in Targets 18 and 19 on subsidies and financial resources. 

In the next post in our series, we will dive deeper into questions and key considerations on significant factors affecting the inclusiveness of agricultural projects into the biocredit market. In particular, we will focus on additionality and permanence criteria, pricing and crediting approaches, and monitoring and evaluation methodologies that reflect the realities and financial needs of all kinds of agricultural endeavors, big and small, in developed countries and in the global south.

About the Author:

Irene Montes, MSc., works on the intersection between biodiversity, regenerative agriculture, and climate at RRG NBS, which advises investors, companies, and asset-owners in the regenerative transformation process worldwide, focusing on farming, water, biodiversity, renewable energy, and supply chain strategies. Irene brings expertise in ecological restoration of rural landscapes through regenerative and agroecological approaches, valuation of ecosystem services, assessment of nature-related dependencies, impacts, risks and opportunities, scenario analysis, and reporting. She holds a bachelor’s degree on Environmental Engineering and a master’s degree on Forest Science from the Yale School of the Environment, with 15+ years of experience working in the agricultural sector.