Biodiversity banking, also known as biodiversity trading, conservation banking, mitigation banking,[1] habitat banking, compensatory habitat,[1] or set-asides,[1] describes a market-based framework for biodiversity offsetting where offsets can be traded in the form of credits to offset negative environmental impacts of development projects or activities. This involves biodiversity banks, areas with biodiversity value.[2] On the site of a biodiversity bank, conservation activities may be carried out to preserve, restore, enhance, or conserve biodiversity.[3][4] The outcomes of projects carried out at biodiversity banks are valued in the form of credits, which can be purchased as a way to offset unavoidable adverse environmental impacts, often with the aim of achieving no net loss of biodiversity.[5]
Biodiversity banking emerged from wetland mitigation banking in the United States, beginning in the 1980s and arising from the no net loss policies developed with the Clean Water Act in the 1970s.[6] Since then the concept has been extended, including its application to the bond market.[7][8]
The terms used to describe biodiversity banking are dependent on the focus of conservation aims and the policies of the country or region in which it is applied.[9] Some of the countries where biodiversity banking has been implemented include the United States, Australia, Canada, Brazil, and Colombia.[10]
^Sullivan, Sian (2018). "Bonding nature(s)?: Funds, financiers and values at the impact investing edge in environmental conservation". In Bracking, S.; Fredriksen, A.; Sullivan, S.; Woodhouse, P. (eds.). Valuing Development, Environment and Conservation: Creating Values That Matter. Routledge Explorations in Development Studies. pp. 99–121. doi:10.4324/9781315113463-6. ISBN9781315113463.