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Biodiversity credit market poised for potential $180 billion boom by 2050

The World Economic Forum (WEF) predicts the demand for biodiversity credits soaring to $180 billion annually by 2050. According to a recent WEF report, a radical transformation in valuing nature could propel demand to $7 billion per year by 2030, driven by robust policy support and widespread adoption of nature targets among major companies.

Biodiversity credit market poised for potential boom by 2050_A bee gathering nectar from a flower with a sunrise in a background_visual 1A bee gathering nectar from a flower with a sunrise in a background.

The optimistic scenario sees almost all of the largest 500 US companies embracing nature-related targets, with biodiversity credits playing a pivotal role. However, two alternative scenarios project more conservative figures, with demand reaching $69 billion by 2050 in the effective development pathway and $6 billion in the limited development scenario.

The WEF's market outlook report, developed in collaboration with McKinsey, highlights the potential for rapid growth in the fledgling voluntary biodiversity market. Despite growing interest, actual trades have yet to materialise, but corporations expect a significant increase in transactions by 2028.

Read more: World Bank unveils vision for thriving global carbon markets

The report outlines five potential uses for biodiversity credits, from enhancing carbon credits to taking responsibility for unmitigated biodiversity impacts. The WEF acknowledges challenges in establishing a widely accepted business case but provides a guide for companies to use biodiversity credits with integrity.

To unlock scale in biodiversity credit markets, the WEF emphasises three key results: establishing a business case for buyers, developing high-integrity supply at scale, and consolidating common principles and standards. Policy support, including nature impact reduction and Indigenous peoples' land rights clarification, is crucial.

Read more: Biodiversity credits: an innovative financing mechanism for conservation

In a bid to foster market growth, the WEF aims to launch a buyers club for biodiversity credits early next year, signalling optimism for the industry's rapid development.

Biodiversity markets offer a distinctive avenue to expedite funding for biodiversity conservation while offering a financial incentive for preserving and restoring natural ecosystems. By crafting a framework specifically tailored to the challenges and opportunities inherent in biodiversity conservation, we can leverage market forces to pave the way for a sustainable future for our planet.

At DGB Group, we firmly advocate investing in nature-based solutions as the optimal strategy for safeguarding and reviving our environment. We specialise in designing and overseeing large-scale reforestation and afforestation projects aimed at restoring biodiversity and revitalising degraded ecosystems. Our array of solutions provides businesses, investors, and individuals with accessible and transparent ways to contribute to preserving nature.

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