Voluntary biodiversity credits : emerging concepts in managed forests

Biodiversity is rapidly declining worldwide, which threatens ecosystems that provide support for food production, clean water, and climate stability. A major challenge to protecting biodiversity is that there is insufficient funding for nature conservation and restoration. Approximately 30% of the global land area is covered by forests used for wood production. In Sweden and other European countries, these production forests are economically important and present valuable opportunities for biodiversity preservation, restoration, and sustainable management. However, without viable economic incentives that stewards how to best balance productivity with ecological integrity, declines in biodiversity will likely persist. Biodiversity credits are an innovative financial tool that can compensate private forest owners for their contributions to biodiversity enhancement to address funding gaps and encourage participation in conservation initiatives. By purchasing biodiversity credits, companies can fund initiatives such as forest restoration, habitat protection, and species conservation. This thesis reviewed biodiversity credits as a market-based mechanism to incentivize conservation and restoration efforts in production forests in a manner that aligns with policies such as the EU Nature Restoration Law. Clear regulatory frameworks and reliable verification systems are needed for biodiversity credit implementation to be successful. However, biodiversity credit design still needs to be optimized to sufficiently balance conservation, carbon sequestration, and wood production. Creation of a well-structured biodiversity credit market will allow Sweden and the EU to make nature conservation a financially viable and scalable solution to ensure that forests remain productive while retaining their rich biodiversity.