22. 07. 2010.

EU foresees take up of 'biodiversity businesses'

Biodiversity and ecosystem conservation offer an array of new opportunities for business, which can either develop green products and services or trade biodiversity 'credits', argues a new European Commission report on the economics of nature.

The Economics of Ecosystems and Biodiversity (TEEB) for business report was launched on Tuesday (13 July), setting out the business case for providing green services.

It notes that biodiversity and ecosystem services offer opportunities for all business sectors, mainly because integrating environmental concerns into company management can increase the cost-effectiveness of operations, ensure the sustainability of supply chains and attract new customers.

But nature considerations can also be the basis for new businesses, the report underlines. Conserving biodiversity and using biodiversity and ecosystem services in a sustainable and equitable manner can be the basis for unique business propositions, enabling entrepreneurs and investors to develop and scale up biodiversity businesses, it argues.

The authors note that opportunities for such businesses are growing, particularly due to the expected increased pressure on and more restricted access to natural resources on both land and sea.

Trading biodiversity credits

The report predicts the emergence of biodiversity and ecosystem service (BES) markets, alongside existing ones such as the EU emissions trading scheme for carbon dioxide.

This could create new biodiversity assets with local and international trading opportunities, the report adds, citing Reducing Emissions from Deforestation and Forest Degradation and related land-based carbon storage and sequestration methods (REDD+) as the first major opportunity for such business.

Another potential market opportunity is the Green Development Mechanism (GDM), a financial mechanism currently discussed under the Convention on Biological Diversity to mobilise private sector funding to mitigate biodiversity loss, particularly in developing countries.

New markets for biodiversity credits and intangible ecosystem services such as watershed protection are also emerging, providing new environmental assets with both local and international trading opportunities, the authors note.

Securing property rights over nature

But before ecosystem markets can be developed, a number of financial, regulatory and market pre-requisites need to be addressed, the report says.

These include securing property rights and insurance over ecosystem assets as well as defining ecosystem credits and debits.

According to the report, fiscal incentives - such as tax credits for conservation and the establishment of a legal authority to trade ecosystem credits and debits - are also necessary.

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