KEY PROJECTS
Licentiate thesis: Voluntary biodiversity credits – Emerging concepts in managed forests
Biodiversity is declining at an alarming rate worldwide, threatening ecosystems that support food production, clean water, and a stable climate. Although much focus is placed on fighting climate change, the loss of species and habitats is an equally pressing crisis. A major challenge is that nature conservation lacks sufficient funding—governments alone cannot cover the costs.
Biodiversity credits offer an innovative financial tool to involve private investors and businesses in conservation efforts. Biodiversity credits function as a market-based solution that allows companies to invest in projects that enhance and restore ecosystems.
Similar to carbon credits, they provide a way to finance conservation efforts while offering businesses an opportunity to demonstrate their commitment to sustainability. By purchasing biodiversity credits, companies can fund initiatives such as forest restoration, habitat protection, and species conservation.
Forests used for timber production cover about 30% of the global land area. In Sweden and other European countries, these forests are vital to the economy, but they also play an important role in maintaining biodiversity. The Swedish forest management model aims to balance wood production with environmental goals, but a fundamental flaw exists: forest owners are only financially rewarded for wood production, not for conserving nature.
This creates a system in which conservation is often deprioritized in favor of logging. Current conservation measures, such as forest certification and voluntary set-asides, do not fully compensate landowners for income lost when prioritizing biodiversity. Without a market for biodiversity conservation, the decline in species and habitats will likely continue. Biodiversity credits offer a potential solution by providing financial incentives for forest owners to integrate conservation into their management practices.
Many international policies, including the EU Biodiversity Strategy for 2030 and the Nature Restoration Law, emphasize the need for private sector involvement in conservation. Despite this, Sweden lacks a structured biodiversity credit market, putting it at risk of falling behind in the global transition toward nature-positive finance.
With global biodiversity funding gaps ranging from USD 36 billion to 7 trillion annually, private capital must step in where government funding falls short. The recent geopolitical landscape makes it unlikely that governments will significantly increase conservation funding in the near future. Biodiversity credits represent a major investment opportunity by aligning financial incentives with ecological restoration.
For biodiversity credits to succeed, clear regulatory frameworks and trustworthy verification systems are essential. Further research is needed to explore how biodiversity credits can be best designed to benefit both nature and landowners while balancing conservation, carbon sequestration, and timber production.
By creating a well-structured market for biodiversity credits, Sweden and the EU can lead the way in making nature conservation a financially viable and scalable solution, ensuring that forests remain both productive and rich in biodiversity for generations to come.
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