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Protecting endangered ecosystems is usually thought of as a job for governments. Now, a new financial instrument hopes to get the private sector to help out. Stan Alcorn and Tomas Uprimni take a look at biodiversity credits for NPR's Planet Money podcast.
TOMAS UPRIMNI: To figure out what this new financial instrument is, we decided just to buy one.
STAN ALCORN: So let's go buy a biodiversity credit.
UPRIMNI: OK.
ALCORN: For 25 bucks, we could get a credit, promising to protect 10 square meters of cloud forest in the Andes Mountains of Columbia, where there are 20 threatened species, including the spectacled bear.
UPRIMNI: The bear from Paddington.
ALCORN: Are you ready to own our own little piece of the cloud forest?
UPRIMNI: I'm ready to save Paddington.
ALCORN: (Laughter).
Once we'd bought a credit...
We did it.
UPRIMNI: Done.
ALCORN: ...We wanted to see how exactly it protected biodiversity. So we had to go there...
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ALCORN: ...To a place called El Globo.
Are we in El Globo now? Like, this is all...
MAURICIO SERNA: Yeah, this is El Globo right now.
UPRIMNI: Mauricio Serna, one of the leaders of this project, takes us to see the dense jungle of the cloud forest and the traces of its most famous resident, the spectacled bear.
ALCORN: Wow, the scratch marks.
SERNA: He climbed all up over there, and you see scratches...
ALCORN: ...All over the tree.
SERNA: ...All over the tree.
ALCORN: This biodiverse forest is the exception here in El Globo. Most of it was cut down for cattle to graze, until it was what they call clean.
SERNA: And clean means no trees, no shrubs, and nothing but grass for cattle.
ALCORN: To turn the clean cattle ranch back into cloud forest means planting trees, putting up fences, hiring a ranger. The $25 credit we bought is supposed to help pay for all that.
UPRIMNI: Serna will eventually need to sell more than 300,000 of these credits.
SERNA: That's a big inventory. So we need corporate buyers who can buy a big bunch of this credit.
ALCORN: The pitch to corporate buyers is a bit like voluntary carbon credits. Companies buy those to reduce carbon emissions and to make claims that they're carbon neutral.
UPRIMNI: With biodiversity credits, companies might claim they're helping nature.
SERNA: It was a shot. I mean, it was, like, let's try to make it work.
ALCORN: To see if it was working, I followed Serna to the U.N. Global Biodiversity Conference in Cali, Colombia. Biodiversity credits were one of the hottest topics there, with panel discussions, meetups, even a tequila company...
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UNIDENTIFIED PERSON: (Non-English language spoken).
ALCORN: ...Handing out shots to promote a jaguar credit.
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UNIDENTIFIED PERSON: (Non-English language spoken).
UPRIMNI: But there were also plenty of skeptics - like Mark Opel, a conservation finance watchdog at a group called Campaign for Nature.
MARK OPEL: We think they're a distraction.
ALCORN: Opel points back to voluntary carbon credits. Reports in recent years have shown the majority of credits in that market didn't actually live up to their carbon-reducing claims. He thinks biodiversity credits will have the same problems and that companies won't buy them.
OPEL: At the end of the day, companies are in the business of generating shareholder value. There is not a business case for biodiversity credits to generate shareholder value beyond a token amount of philanthropy and marketing. We will never meet our goals by looking to the private sector to voluntarily make investments that don't maximize shareholder value.
UPRIMNI: By the end of the conference, Serna had talked to 30 or 40 companies, but none of them had bought biodiversity credits.
SERNA: We all hoped this was the other way around and that there was a problem with supply, not of demand, but it's just not.
ALCORN: He and many others now say that demand for biodiversity credits will only really grow if there are regulations or tax incentives that give companies more of a reason to buy them. In other words, the biodiversity crisis may still be a problem for governments to solve.
For NPR News, I'm Stan Alcorn.
UPRIMNI: And I'm Tomas Uprimni from Bogota, Colombia.
(SOUNDBITE OF ANTIGONI SONG, "HIT LIST") Transcript provided by NPR, Copyright NPR.
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