Marine Biodiversity Credits: Technical Framework for Protection Credits

Marine Biodiversity Credits (MBCs) entail a natural capital accounting methodology that establishes comparable units of marine biodiversity value, which can be turned into credits or assets. This technical framework outlines the methodology for generating MBCs, which are designed to support both policy and financial applications. The framework is based on the concept of Biodiversity Units (BUs), which are defined as spatially and temporally coherent areas for marine biodiversity evaluation. Within each BU, Marine Biodiversity Units (MBUs) are calculated from a set of modulating factors (MFs) that capture the ecological and social value of marine biodiversity within the area of interest. The MFs are weighted and normalized to generate a single score for each MBU, which reflects its relative biodiversity value. The MBCs are generated without counterfactuals, as they reward maintaining a high baseline of biodiversity within each BU. The methodology includes a buffer that allows for some variability in the MBU scores, while ensuring that the credits are only issued to BUs that maintain a high level of biodiversity. The MBC framework is designed to be flexible and adaptable to different contexts, while ensuring scientific rigor and transparency. 

Applied to policy, this accounting methodology can help governments and decision makers base conservation efforts using data-driven ecological economics. More importantly, MBCs are designed to support diverse financial mechanisms. As natural capital assets, once properly issued, they can operate in mechanisms such as guarantees in conservation finance, nature-debt swaps, tradable commodities, or as backing for environmental derivatives and other securities. By providing a market-based mechanism for valuing and protecting marine biodiversity, MBCs have the potential to unlock new sources of funding and engage a wider range of actors in conservation efforts. This paper presents the technical details of the MBC framework and discusses its potential benefits and challenges.