(Bloomberg) -- The UK is setting out its own principles for the voluntary market for nature credits, representing a vote of confidence in a largely experimental financial product that’s intended to protect biodiversity.
Britain will unveil the guidance at the COP29 climate summit, as Prime Minister Keir Starmer steps up the country’s green ambitions with a new greenhouse gas emissions reduction target. The framework will also apply to carbon credits, with the guidance to be subject to public consultation next year, according to a statement seen by Bloomberg News.
“Governments, civil society and the private sector now have a clear framework of good practice to work from,” UK Climate Minister Kerry McCarthy told Bloomberg News. “We must now come together to unlock the additional finance they can provide, alongside our wider efforts to increase the finance from all sources — public and private — needed to limit global temperature rises.”
An international market for nature credits, which are tradable securities representing a unit of improvement to biodiversity, may reach $69 billion by 2050, according to the World Economic Forum. However, critics have warned such products risk succumbing to the same greenwashing scandals that have plagued the more established market for carbon offsets.
The UK is set to lay out its vision for good practice in voluntary credit markets at the COP29 summit on Friday. The idea is to build trust in light of greenwashing concerns, and to help offer clarity for companies on how such credits can be used to support net zero or nature objectives.
High integrity voluntary carbon and nature markets “can leverage additional streams of much-needed private finance, particularly for developing countries,” the UK said. India, Indonesia and Brazil are among countries seeking to attract finance for the development of low-carbon technologies and land management practices by selling credits, according to the statement.
The UK said it will build on work from initiatives like the Integrity Council for the Voluntary Carbon Market. Its new principles follow the first broad US government guidelines for carbon markets, which were disclosed in May.
The UK now aims to cut emissions by 81% from 1990 levels by 2035, Starmer said earlier this week in Baku. That’s a step up from the previous 78% cut Britain was targeting, and brings the government’s policy in line with the recommendations of its adviser, the Climate Change Committee.
(Adds UK targets in final paragraph.)
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