The economics of biodiversity additionality (BIOADD)
Summary
BIOADD is exploring the economic, biophysical and political determinants of deforestation, natural forest regrowth and biodiversity in Amazon basin (particularly Bolivia) and Indonesia. The aim of the project is to develop new methods to value biodiversity and account for additionality from forest carbon taking into account the likelihood of deforestation and secondary forest regrowth as determined by the trade-offs between economic and biophysical processes. The aim of the project is to provide clear and workable for effective policy on nature based solutions to climate change and on biodiversity conservation.
Dates
2022-2025
Academic lead
Ben Groom
Funder
Natural Environment Research Council (NERC)
More information
BIOADD is exploring what impacts current policies in the Amzaon (particularly with SDSN partners in Bolivia) and Indonesia have on tropical forest regrowth and biodiversity. This is being tackled from 3 perspectives:
1. To guide trade-offs for sustainability efficiency for governments, central banks and financial institutions, and to value the additionality of biodiversity interventions
2. To understand the dynamic and spatial economic causes of secondary forest regrowth in the Amazon rainforest in Bolivia
3. To understand the role of ‘policy layering’ (multiple spatially overlapping or adjacent policies) in hindering or improving biodiversity outcomes in tropical forests in Indonesia
Using the body of theory and evidence collected from this work we will develop an online tool that will enable participants in the carbon offset market to compare nature-based solutions according to their impacts on biodiversity, the social value of the offset emissions, and their risk of failure and impermanence. The tool will be calibrated using project level data from partner CarbonPlan.
This work is funded by the Natural Environment Research Council (NERC).
Why it matters
The HM Treasury Dasgupta Review on the economics of biodiversity illustrated the complex and embedded ecology-economy relationships and thereby the fundamental economic and societal value of biodiversity. The Review evidenced the unsustainable path of exploitation of biodiversity and made plain the need to manage regeneration of natural capital in the global economy to ensure sustainability. For sustainability to be achieved efficiently requires trade-offs to be made, the relative economic values of biodiversity to be understood, and interventions to be evaluated according to “accounting” or “shadow prices”. The UK government’s aims in this regard are reflected in domestic (The Environment Act of 2021) and international commitments (e.g. the Kunming Declaration of the COP15 of the Convention on Biodiversity).
With the economy embedded in nature, economies must consider their impact on nature, yet Nature Based Solutions are implemented within economic systems. Interventions that aim to achieve sustainability and conserve or restore biodiversity: e.g. Protected Areas; Nature-Based Solutions to climate change mitigation (including REDD+); and, land-use and input policies for agriculture, therefore need to account for interactions in the economic system.
BIOADD will help the UK prioritise approaches to meeting its commitments to global biodiversity net-gains and carbon net-zero, and provide a general methodology for prioritising biodiversity regrowth and regeneration.
Project team
Ben Balmford
Senior Researcher
Sabrina Eisenbarth
Associate Professor
Ben Groom
Dragon Capital Chair
Ville Inkinen
Postdoctoral Research Fellow
Sarah Meier
Postdoctoral Research Fellow
Charles Palmer
Professor of Environment and Development Economics
Lorenzo Sileci
Research Assistant
Frank Venmans
Assistant Professorial Research Fellow
Diana Weinholt
Associate Professor of Development Economics
KEY PAPER: Realizing the social value of impermanent carbon credits
Nature Climate Change (2023)
KEY PAPER: Strong transparency required for carbon credit mechanisms
Nature Sustainability (2024)