Episode Transcript
[00:00:00] Voice Over: This is Constructive Voices. Constructive Voices, the podcast for the construction people with news, views and expert interviews.
[00:00:12] Mark V/O: In this episode of constructive voices, Jackie De Burca is joined by Brian MacSharry from the European Environment Agency to unpack one of the most important yet least understood ideas in today's environmental nature credits.
Brian explains in clear, relatable terms how these credits differ from carbon credits, why they matter for business and society, and how they could transform the way we value biodiversity.
If you've ever wondered how we can fund nature restoration at scale, or why your morning coffee and even your chocolate bar depend on biodiversity, this is an episode you won't want to miss.
[00:00:52] Jackie De Burca: Good afternoon, this is Jackie here for Constructive Voices, and I'm with a person from my own country who actually went to the same university as me in Trinity College, Dublin. He did get there a bit later than me, so divulging ages again there. But Brian McSherry is with me today. Brian is with the European Environment Agency. Brian, first of all, thank you so much for taking the time.
[00:01:14] Brian MacSharry: You're very welcome, Jackie. And I should say to your listeners, I graduated last year from college.
[00:01:18] Jackie De Burca: Very good, Brilliant. So now we have to pretend that you didn't graduate last year because you have had quite an extensive career somehow or other since last year. Brian, could you just start by talking about your role as well at the European Environment Agency and how it connects to the current work on nature credits?
[00:01:37] Brian MacSharry: Yeah, thanks, Jackie. So I work in the European Environment Agency, which is an agency of the European Union which focuses, as its name says, on the environment.
We're just over 30 years old and we work across a few different areas. We have a very strong environment department which covers like air pollution, noise pollution, light pollution. We look at the marine, we look at fresh water, we look at biodiversity, which is my area. And then while we're in the agency, we do a lot of work in climate change and digital transformation and sustainability and foresight. So we do a lot of work across the wider environmental sphere. A lot of what we do in the agency is tracking progress towards different policies. And suppose from the biodiversity side what my. I've had a few different roles in the agency, but what I do at the moment is strongly linked to the European Union's nature policies, so the nature directives and the restoration regulation as well. And I do a lot of work in protected areas as well. So a biodiversity expert role. I did a lot of work on our State of Nature report, building on the Birds and Habitat Directive, and of course, recently with the discussion on nature credits it's kind of the several of us in the agency working on different aspects of this relatively new.
So we're looking at how we can support the commission and the conversation that they're having with this, and also how we can feed it into the work that we're doing. And also then how the work we do in the agency can kind of feed into the narrative about nature credits in terms of what should be worked on, how do we track success, etc.
[00:03:14] Jackie De Burca: Okay, perfect. So we're going to delve in a fair bit of depth into the nature credits, Brian. But out of curiosity, what was it that drew you personally into this space?
[00:03:23] Brian MacSharry: I suppose when I was younger, I grew up in Cork and my family are from Limerick. So I used to go up to the countryside in Limerick a lot. And I used to want to be a farmer for a long time. Well, when I was about four to five, I wanted to be a farmer. And then I smelt the manure from farms and my city nose was too sensitive to that. But I did love just being out and about in nature. When I was a teenager and younger and a bit of a in my late early 20s, I loved being outside. I loved hiking. I loved just the natural environment. Geology is my undergraduate and my PhD, but it was very much about kind of applying it to the shape of our landscape and, you know, why is this hill here? Why is that? And I really got an appreciation of the physical beauty of our landscape, and I was very keen to help protect that and understand how it helps shape our culture. There's a real passion for it. And then when I finished college, I got a job in Ireland with the National Parks and Wildlife Service, helping them do management plans of protected areas.
I loved it. It was like my first day I realized this was the area I wanted to work in.
It was really nice working on doing something very positive, society as a whole, and helping protect the nature that we have. And this was in Ireland, so it was right about the country I knew and I loved and I grew up in and helping protect that. And then as time went on, I got the chance to work at a European level. Worked in France for a few years, European biodiversity.
And that just broadened my appreciation of what biodiversity in nature is for us as a culture and a species, different countries. And I just was amazed by it all, you know, the commonalities and the differences. And then I got a job. I worked at the global level in Cambridge with a crowd called Unit wcmc, working on a global data set in protected areas. And that Sunny was working on biodiversity at a global level, and you start seeing what's happening in Africa and Oceania and Latin America, etc. And that was, for me, was it was amazing to do something I was passionate about, which was biodiversity in nature and working with people from all over the world and talking to them and listening to them, and then really seeing and learning how biodiversity, you know, is so important for society as a whole. I mean, for me, I always thought it was amazing. It was not even something I had to even consider why it is important, it just was. But I realized that a lot of people didn't have that experience or didn't have that vocabulary.
So over the last number of years, a lot of it has been trying to understand why it is important for people. And then I moved to the European Environment Agency in Copenhagen, working in biodiversity again at the European level. And that was pretty amazing. Working with the policies and setting up the Nature Restoration Regulation and then recently dipping our toes into nature credits. And a lot of it, really, if I was to boil it down, is really helping people appreciate how reliant we are on biodiversity in nature, how it underpins our economy, how it underpins our society and our culture. And I think it shapes us a lot as people and as a society and as well as the pure wonderment of biodiversity itself and the science behind it. But it was really that kind of bringing the connection of why biodiversity matters for you.
That's something I've really appreciated. And that's kind of. I started evolving into that a lot recently, was trying to explain the importance of biodiversity to a wider society, not just the scientists who get it, because, you know, they understand that to kind of lawyers and to property developers and to business people. I suppose that's where the nature credits comes in a lot. We do a lot of work with the European Commission because we're an agency of the European Union. About a year ago, the Commissioner, the president, Commissioner Vanderlein, when she was writing these letters for the new commissioners, she really outlined the importance of nature as a foundation for a competitive and resilient economy.
Very clear in black and white. And in that, it was a lot of discussion about how do you value it? How do you pay people for doing the right thing from a nature perspective? And how do you enable them to continue having a livelihood while doing that, which is a positive, a global good, get a livelihood for that so they can continue doing this? And how do you make these connections between these different dots of say, you know, this is biodiversity, this is, you know, providing services for water. This is pollinators, this, this is a farmer, this is a business, this is a funder, this is the customer, the client. How do you join all those dots together? And that's when the nature credits in a European context really came into fruition. What tools could we have to put some kind of value and process behind that and some protocols around that? So that's kind of my circuitous journey into nature credits.
Passion for biodiversity with the kind of the need to communicate to a wider audience about why is it important? And just ticking different boxes saying it's important because it's economic valuable, it's important because it's culturally important.
[00:08:28] Jackie De Burca: Sure, Brian. Now, one question that I know listeners who are maybe not as directly involved in biodiversity as you are yourself would be can you break down what nature credits are and how they're different from carbon credits?
[00:08:44] Brian MacSharry: Yeah. It's nice to be asked a simple question, Jackie, as well.
I think this is probably the fundamental one.
So I think there's a few different layers to it. So I suppose starting off with, there's a lot of similarities. Of course, it's the language of use credit. There's a lot of commonalities in terms of both nature and carbon. What you're effectively doing is you're recognizing that there's an action happening. You're going to kind of quantify that somehow.
You're going to certify that you're going to create a certificate, There'll be some maybe a registry of these certificates to, you know, put in a bit of due diligence into the process.
You will develop a kind of a credit based on a positive outcome from what you've done. And then you might have a market of people who are trading or using those credits, are buying them for different things.
On one level, there's an awful lot of commonalities in terms of the infrastructure, if obviously use such a language to describe it, like the process of it. Where the differences come down to is that in carbon credits, what they've done, I think, very successfully is they've tacked it to kind of a unit, so a way of measuring what is being kind of stored or sequestered for carbon.
And, you know, the carbon credits, then they manage the kind of the equivalency of carbon dioxide and kind of effectively then greenhouse gases by association, what is being stored. So in the carbon world, what you're doing is, in a bit of an overstatement, you're monitoring and you're tracking something. The equivalency of carbon being stored so you've got a unit on there that you can measure, and then from that everyone else then has a common understanding of that unit of measurement is it's like when you're driving a car or something, kilometers per hour. We all understand that there's a limit. You can go speeding, you can go under the limit. So that's what the carbon credits are doing. They have a kind of an agreed upon unit that they work on. And then you can measure that and you can map that as well. You can say, where are things happening? Is it higher here, is it lower here? And you can kind of then say, you know, my action does 10, this carbon credit is 11.
So therefore you can balance the books and so forth from that one. So that's kind of where the carbon credits come into in nature credits, then it's using a similar mindset. But the challenge with the nature and the carbon is that nature of biodiversity, they're technically different, but they're often used interchangeably, is a lot more difficult to measure.
This is where the biggest conversation, at least in my circle, is how do I measure what is a credit? How do I measure biodiversity? What is the unit that it is representing? And this is where it gets very complex, because how do you value nature?
Is a certain species more important or more valuable than another species? Is a certain habitat more valuable?
The challenge or uniqueness of biodiversity is that it's very.
It depends a lot on where you are in the planet, depends a lot on what time you are, and it depends on how threatened or not threatened species are as well.
So it's. Whereas the carbon credits is a bit more harmonized in terms of there is an agreed upon unit with biodiversity in nature, it's a lot more difficult to actually have an equivalency, say if I'm in the Congo or if I'm in Amazon or if I'm in Ireland or if I'm in Antarctica, the actions, it's difficult to kind of put a value on those and say, well, this is a 10 and that's a 5 and that's a 1.
So I suppose that's where a lot of the challenges come from. And the next challenge then in the nature credits is how do I measure a change? So with the carbon credits, what you could do is you could measure an increase in the carbon equivalency that you're storing, have a sensor and you can monitor this and say, okay, it's a 10, I do certain action, or maybe I restore certain types of nature and I get a 12 or a 13 or 14. The challenge in biodiversity is to work out how do I measure an improvement and is this an improvement in the short term or the long term.
So there's been a lot of literature out there discussing this and there's a lot of people doing really good work, kind of debating some of these philosophical scientific principles for it.
What they tried to do when the European Union did this roadmap of nature credits, which was launched in mid July, ish, it tried to take one step back from that. And what it did was it starts off by highlighting the fact that nature is very important for society. And if you read this roadmap, it's very interesting in the language it uses, it really builds the case that our economy is dependent on nature, whether we're aware of it or not aware of it. There was some really interesting work done by the European Central Bank a while ago and it said that 72% of companies in the euro area are critically dependent on at least one service from an ecosystem that could be water pollinators, wood, something like that. It talked as well about 75% of bank loans in the euro area to companies are linked to one of those ecosystems services.
And then a lot of companies are effectively directly their nature companies, whether they realize it or not. So a lot of it is kind of connecting the dots to make sure that people are really aware of their dependency on nature, biodiversity and by default then having a healthy state of biodiversity. Because what the note starts off with is it kind of flags the fact that, you know, we have these dependencies but people aren't aware of them. Accept it as a given. Offshore, of course I have water, of course I have trees, of course I have pollinators, of course my crops will grow.
And what the science is telling us is that's not exactly 100% accurate, that there's a huge risk in there. So if we use kind of business language, we start flagging that there's a large amount of risk in those assumptions. And for example, the World Economic Forum did a report earlier this year and it says that for these global risks for the next 10 years, biodiversity loss in ecosystem collapse is a second of 10 in the rankings for what the long term risks are for the society and our economy and our world as.
[00:15:14] Jackie De Burca: A whole, which makes it very complex.
[00:15:16] Brian MacSharry: Brian, what's interesting is that we're the argument has been building a lot that whether you're an economist or a biodiversity specialist, you're effectively caring about the same thing, really, that a lot of companies really are dependent on biodiversity. Whether they know or not. So it's been really building the connection with those. And then what the credit note, what this roadmap and a lot of other literature starts talking about is how do you make those connections and how do you start resourcing this gap in terms of financing needed to restore biodiversity. So for example, in Europe we do this work every few years called the State of Nature.
What we do is we work with 27 European countries. They do really good work in collecting a lot of information on a certain number of species and habitats across Europe. And we assess those and work a lot of experts to get the figures. The last time we did one, which was in 2020 when we published a report, we found that 81% of the habitats that we assessed were either poor or bad in their condition, but over half of them having a trend that is decreasing. Birds were a little bit better. Just under 40% were in a poor or bad condition. And then for those species, those non bird species, it was about just under 2/3 were poor or bad.
2/3 had an unknown are decreasing trend. And that varied a bit across Europe. Some areas, like the very Eastern Europe, generally had a healthier state of biodiversity than say Western Europe. But these figures really kind of flag to us that there is a risk there and we know what the risk is. So my assumption that if I'm a company and I'm doing X and there's a nature dependency upon that, there's actually quite a high risk for my business because that dependency is under threat and it's not equal everywhere. But we know this, this is one of the known knowns. We also know that companies are dependent on nature. So it's connecting those dots from those. We also realize that to rest protect nature, to bend the curve as they call it, it's going to take money. And again, we know what we need to do. We know like where these habitats and species are, we know the condition of them, we know what actions will help protect those and restore those, that is to reverse that trend, to make it better. So we know all of this and we, we have a good idea as to how much this costs as well.
And there's a figure of about 700 billion a year. That's global.
And this is to get to the ambition of 30% of the planet, land and sea by 2030.
So the convention of Biological Diversity and their cunning Montreal Global Biodiversity Framework work out for 700 billion a year to do that. Now a lot of that money comes from governments to do this, but of course they can't all come from them. And this is where the credits kind of start stepping in. So a lot of countries are saying we want to do, we put in a lot of money. Often it's to fix something rather than to stop something happening. But they're saying we need to marry the public funding with private funding.
And we also want to develop some kind of system where that those who are doing positive actions for biodiversity, those who are protecting, those who are restoring it, there is some way of recognizing that and maybe creating a kind of a credit or a certificate of that so that they can then use that to leverage funding or to attract public funding coming in.
So what the European reused Nature Credit roadmap does is starts talking about that. You know, we know these activities are happening and especially the restoration regulation. We expect a lot more of these positive activities to happen.
That if you want to do them, the credit route, what you need to do is you need to have certificate. You need to have somebody who will be independent from those who are doing the action to kind of assess what is happening, track the effectiveness of it, to make sure there's a quality of it, that there's compliance and there's monitoring so forth. And that would create a certificate. So that gives you kind of a quality. You know, I know something is happening. I know it is meeting a certain level. And that gives me kind of my credit, my certificate, sorry.
Then you might then have some kind of registry. So you could put those certificates somewhere and you could maybe track that and visualize it. The credit comes in then where you're tracking the outcome of that action and you're seeing is there a positive outcome and that's where the credit comes in. So the credit is that kind of where you know there's a major positive outcome from the actions of someone has taken, done.
And then you've, you know, you, you've had some metrics where you've monitored that. It's not that I rock up and say, hey, this is good. You have a kind of a due diligence and an audit trail that you can say, you know, I did this here. This was recognized that my actions were generally good. That's my certificate. After X amount of time, I can see there's a positive outcome from that. Therefore I get a certificate credit. And the idea is that credit then could potentially be traded and it could be used to attract certain funding from different organizations or to start mobilizing the market from that. So the note itself kind of covers those basics. It opens up a lot of questions and it's quite honest in saying that we need to understand a bit more about the market. We need to be able to kick start that. So there is a desire, like in carbon credits. There's a big market out there because people understand it.
There's a lot of organizations have been created to work in this and you can see action, A means this and I can do this. And you might be able to say, well, I've done something in Ireland, maybe there's a carbon credit in Indonesia. I can kind of balance what I'm doing with nature. The challenge then is the equivalency and understanding that what is my credit really doing? Is it something that I can offset an action for or is it something I'm just recognizing that, you know, I did something, it is having a positive value, therefore I'm getting a credit for that. So it's an acknowledgement of what I've done. I'm acknowledging that it's positive and there is a credit attached to that. So then that might be able to leverage some resourcing from that. So you have two steps in Europe, so certification and then a credit. And then from the credit you could then start transferring that or cooling it or banking it and doing different things with it. So that's kind of at a high level for it. But as I said, there's definitely a few open questions in the roadmap, which is very honest about it. And this is comparable with a lot of other literature done on kind of credits, is that people talk about the importance of biodiversity. It's an emerging vehicle, as some papers talk about how to try and attract funding and those. There was a really good paper done by a guy called Wunder et al. That was released just in May called Biodiversity Credits, an overview of the current state hydrocute and potential pitfalls. And that says that, you know, on the positive side, credits can be a really good tool to mobilize conservation financing in addition to what government agencies are doing. But this paper would argue that there's some clarity about some of the fundamental elements still required from that. You know, the protocol, the procedures and how do you monitor success?
And then how does that, how do the credits fit into the wider kind of economic landscape? Sure.
[00:22:56] Jackie De Burca: Now, the one thing that comes into my mind, and I know, you know, it may or may not be relevant, Brian is with BNG in England.
There's credits around there already as well, isn't there?
[00:23:10] Brian MacSharry: There are. With the biodiversity net gain. I know in the UK they do a lot of work, they have these kind of environments you stockpile nature in certain places and the biodiversity net gain is really, if you're doing an activity that it's not that you balance your actions so that it's always the same, you have a positive outcome from your action. Yes, a really interesting tool there. I think it could be called a net gain tool, but it was set up by Natural England a few years ago.
Got a really nice Excel spreadsheet which is online, or you can download it and you can fill out lots of information and it can start giving you a value as to what you're doing. So it allows you, as if you're doing an activity, to start getting some understanding of what is the kind of the outcome of that activity in terms of a number.
And that allows you to maybe develop some kind of credit or something akin to a credit. Understand, you know, if you have a net gain, is it, you know, one is your value? Is it a 10 or 20 or 100?
[00:24:09] Jackie De Burca: Yeah, that's it. And there's one or two softwares I know because we've spoken to the people involved who are specifically softwares around the BNG itself. So I just sort of wonder when I'm hearing the complexity and so on, because of all the different territories that will be involved in the eu, obviously. But is there sort of a head start that could be taken from what they've done to date in England?
[00:24:34] Brian MacSharry: Yeah, I mean, I think there's a lot of people all over the world working on this and there's a lot of organizations who do work on kind of trying to understand what we could do and where could we go.
There's several different organizations like World Economic Forum and World bank are doing some work and I think the International Panel on Biodiversity Credits is another one as well. So a lot of what they're doing is they're looking at different actions. And the nature credit roadmap in the EU flags that there's a few studies happening in Europe and by European companies overseas seas as well. And they're looking at these test cases.
There's several mentioned in this roadmap about all over Europe. And it's clear countries are testing it and experimenting and see what works, what doesn't work. Where are the challenges in this? For example, in the roadmap it talks about Estonia and France have pilot projects understanding how nature credits could support nature positive action and forest wetlands. So they're really testing this in the real world and saying, you know, does it all make sense? Where are the challenges in this? Where are the successes in this? And a Lot of it is trying to work with the markets that exist out there and make them aware of nature credits and start looking for creating a desire or market force to want some of these.
But yet there's a lot that can be learned. And I think that's one of the advantages of something like the European Union as a whole is that we learn from each other. And a lot of what we do in the agency is we talk to countries and, you know, we're learning from them and then we pass on the kind of success stories or the lessons learned from different projects to different countries.
And when we mobilize countries together for these different forum discussions, what's amazing is the level of work that countries are doing and the openness they have to learn from other countries and listen and say, you know, I want to do this. What has worked, what hasn't worked, how can I modify it, how can I improve it?
So there's, what I see is there's a general willingness to be receptive to lessons learned, positive and negative lessons. And it's always, you know, it's not somebody. Beckett said, fail, fail again, fail better. It's really just learning from that. You know, science is all about failure and learning from failure.
So that's what we try to do is work out at the moment what actions are working, what is the market and how can we go back to. Maybe one of the questions you ask, start like how do we measure this?
[00:26:55] Jackie De Burca: Sure.
[00:26:55] Brian MacSharry: Credits is about a nature positive outcome can be a challenge. From a European perspective. I can see options out there. For example, we've got this nature restoration regulation and in September, 26 countries are going to have to have a six month period where they have to submit their national restoration plans. So they'll be stating what they want to do and they'll be establishing baselines as to what the condition of something is.
So in a sense, you have a bit of a baseline and the state of nature work that I alluded to earlier on really helps establish that baseline. So, you know, I give a figure of 81% of habitats were poor or bad, and just under just over half of it, the trend was unknown or decreasing.
Those figures are based on a lot of information we collect from countries about short term trend, long term trend, population size, the physical and condition of habitats. So there's a lot of elements there that could potentially be used to understand the current baseline and then could be used to help understand change going forward with those.
And in Europe as well, we have the Natural 2000 Network, which is a network of protected areas designated under the Birds and Habitat Directive. And there's about 27,000 sites scattered on land and sea across the 27 EU countries.
It covers about 18% of our land and about 9% of the marine. And that's going to be a big tool used to get to our 30%. Not exclusively, it'll be done in conjunction with national sites as well. But for these natural 2000 sites, they ask for a lot of information to be collected for the different ones.
And we work with the European Commission a lot to manage this data set. And we have a very nice natural 2000 viewer where your audience can go in and go onto this online map and click on a site and get information of what the species and habitats and all the information about in there. But in that there's a lot of information being asked about the area of habitats, the condition of the habitats, the number of species, the trend, etc. And I think a starting point, I think there's something in there where we could start looking at it and saying, can we use these tools to help us understand if there's a positive outcome happening from the activities that are happening? When I started playing with data a little bit, there are some really interesting narratives coming out from it. You can see that countries really do a lot of work on these sites to tell us about the condition of them and with a lot more monitoring, start tracking change over time in those. So the European network, what we tend to do is we have metrics that are used to fill out this information from the 2,000 sites in the state of nature, and we can potentially track those between different versions of the reporting and see if some of those can help tell us if something is nature positive outcome or if it's not telling us anything, how can we use the data that we have to tell us something?
Where are there gaps in that?
How can we go about filling those gaps? And then when we have this information, what can we use it for?
Can we start using it for this credit conversation to understand baselines and understand how do I track a positive outcome?
Or is this something that you could do at a very local level where you have to design a monitoring scheme on particular features and track those over a period of time? But I think there's, we're still at the conversation stage at the moment. One of these things where I think at different scales you might have slightly different answers and solutions.
So, you know, there might be a European wide conversation and then there might be a very site level local conversation. I think there probably should. There will be some, a lot of similarities on those, but there's still a lot of conversation to be happening on this. You want to have credits that are meaningful, that are honest, but you also want to have the process that is achievable. It's a realistic process that can happen.
And then you can have. You don't have something where it's very onerous to do something and you don't see an outcome for say, several years. And then the market has moved in a different direction.
So there's a lot of forces that you need to balance in those market. Carbon credit market, there's a lot of the protocols and procedures we can learn from, so we're not really inventing something. And it's probably important to use those as well because the market is familiar with those, the systems are set up for those.
But of course, there are differences, as I mentioned at the start as well, on those. So you have to learn what those differences are, acknowledge those and see how you can start fitting in things.
And again, I think for me personally, where do you go in terms of the complexity? Do you go for something maybe higher level, or do you go for something at deeper level?
Where do you start focusing your discussions on?
Is it about figuring out where should you be doing this work? Is it figuring out who these different entities are that are doing the work and who will have a certificate or a credit? How do you develop the market for that? And how do you come up with these metrics or indicators to track nature positive outcome? Who would be the assessors of this as well? It has the potential to generate a nice economy in itself.
Of course, you want it can be an assist to state funding.
You want it to be meaningful at the same time as well, what you're effectively doing is you're helping shorten that gap in terms of what we need to do to protect nature in terms of money and what the public coffers can afford to do as well. So it's that balancing act between what we can do, what's affordable, what isn't affordable, and how do you bring in private financing to help with that. And then of course, if you're running that in, you know, how do they recognize that and how can they trade that and how can they put it on their balance sheets? A lot of companies recognize the importance of biodiversity for what they do. But, you know, they're businesses, they need to show something on a balance sheet at the end of the day, because that's the language that they work on.
So you need to work with Those willing partners understand what their needs are, and how do you mobilize them, how do you engage them? And then how do you link that into a protocol that is, you know, it's got a quality attached to it. So you got a trust in there so that, you know, if I have a credit, I know it's actually doing something positive. If I have my magical 100 credits, there should be kind of an audit trail back to say, yeah, this is real and it's actually doing something. And the fact that there's money attached to that from someone that's helping improve this situation, and we're seeing a positive trend as a result of that. But again, I think the commission in their roadmap have said there's a number of steps that need to get to take in the next two to three years to really kind of fill out this roadmap. Because it's a roadmap. It's not a strategy, per se.
[00:33:46] Jackie De Burca: Of course. Of course.
[00:33:47] Brian MacSharry: And it's really. It's kind of flagging, saying, you know, we don't know, but there is definitely potential in here. And I think a lot of it, for me, when I read this is really about recognizing the people who are doing these positive actions and giving them some credit for it, both in terms of words, but also some potential monetary credit that's in the language of a nature credit. And then can that be leveraged to generate additional resource income in these actions?
[00:34:19] Jackie De Burca: I think as a business, I mean, the first thing you know, there's obviously so many strands and layers to all of this, and as you said, Brian, of course, it's a roadmap right now, but I think as a business, certainly starting off with, you know, any EU stamp on the website or on paperwork that shows that you've contributed in some shape or form, like, it's very well known that certainly lots of people, and particularly younger people, are much more likely to start to choose companies who have a better reputation when it comes to biodiversity and climate change and so on.
[00:34:55] Brian MacSharry: You're right. In terms of the growing trend for people to put their money where their mouth is, in terms taking organizations that have better environmental credentials. I know personally myself, when my family and I are buying something, we really consider the environmental impact and we look at, you know, where something is made, what are the sustainability standards and so forth. We might be the minority, but I think it's growing. There's a growing recognition that we're all part of the solution in terms of having a better planet for us. And we all need to learn and money talk, as I say. And if you start putting your money and your resourcing into positive companies, you know, that will allow them to, you know, continue to do what they're doing.
[00:35:37] Jackie De Burca: You think, you think to yourself, well, I could pay depending on your income level and what you can afford to do. But you think, okay, at my income level I can afford to pay that extra. We'll say €5 for that product and you know, okay, it's a little bit more expensive than the other one. But I know by that that I'm, I'm pouring good into the planet essentially.
[00:35:55] Brian MacSharry: There's a lot of discussions there about like sustainability and circular economy and some of our colleagues in the agency do a lot of work in this. You've also liked, I think importantly like the affordability of some of these actions. I'm going to really butcher a phrase I think from Finland that a friend of mine was telling me that often like you're too poor to buy a good pair of shoes or something like that, you can buy a pair of shoes that are quite cheap but they don't last very long. So you end up spending more money over a 10 year period on a pair of gloves or a pair of shoes.
Yeah, because they're cheaper, they break, versus a really good pair at the start. So that's of course, you know, some people are in a position where financially they can afford to do this, other people are not. But I think those who can should. And I think as a society we need to work out how do we reward those companies that are doing a positive thing versus those who are not doing a positive thing. But then going back to the brand of the European Union, of of course the eu and you know, I'm speaking from my personal perspective here, wouldn't want to just put its label on everything if it is something that they would say there's a strong quality aspect to it. You know, obviously the idea would be that maybe an EU branded credit would be very trustworthy and therefore maybe if there was a trading market that it might have a higher value than something else.
And that's a lot of, I think, what the roadmap starts talking about.
So, you know, certain cheeses are only from a certain place and certain drinks are only from a certain place. And that's kind of this EU branding. And I know in Italy, for example, they have branding for certain products that come from protected areas. So they're farmed in a very particular way in that complements the nature objectives of that particular site.
They get Additional, you know, you charge a premium for quality product and it's branded and labeled as, you know, being good in verticamas and it comes from this space. And I was in a site in very south of Italy many years ago where they were discussing this. And several years later I was in Florence with my wife on a holiday and we got a pizza in a place I recognized the name of a protected area in Puglia in the heel of Italy. I worked out that what they were saying was that the tomato base of the source of the pizza came from tomatoes from this particular protected area. And that's why they charge a bit more of a premium for that pizza versus something else. And that was their marketing thing, was saying, you know, we're giving you good quality product that is relatively local, but it's a high standard. Yes, the credits could be something akin to that as well. So that you go, well, this is branded and trustworthy and you know, in the market. And I trust is probably quite important. I'm a scientist, so I probably don't understand economics and markets particularly well.
From my limited understanding is I think it's that trust is very important, important. So yes, point there about, you know, a branding and an audience and a user group picking one thing over.
[00:38:42] Jackie De Burca: Well, you know, the, the.
It could be a brand.
I don't know what it's going to be, but something that's really catchy and simple and people know exactly what that is, so doesn't even have to say the EU people know, you know, what it is in the future when it comes out. I have one of these sort of like, I don't know, friends of the Earth, in response to the roadmap, say nature credits are a cover for inaction, a green washing shortcut that allows corporations to keep destroying nature as long as they pay for it. Instead of treating biodiversity as a business opportunity, EU decision makers must strengthen environmental law, refund nature restoration and redirect harmful subsidies.
[00:39:24] Brian MacSharry: I think I agree with some of what they said. I disagree with other aspects of it. Overall, when I worked with the commission over a number of years, I do believe they're very passionate about protecting the environment.
I think the challenges that we have is that to protect the environment and to do X and Y and Z, there's always a balancing act between different things. Sometimes the commission, governments and people get it right, other times they get it slightly wrong.
From my personal experience is I've never come across people I work with in the commission who have been against strengthening laws and strengthening resourcing and doing the right thing. I understand. It's also only one voice among many voices and sometimes the argument may not be made the best by those protecting or advocating for biodiversity. I think in principle I agree with the need to resource and strengthen. I think you do need to balance that with overall budgets of countries and where they see priorities are. Obviously, I personally would see the importance of spending a large amount of money to protect the environment because it is the foundation of our economy. So with the nature restoration regulation, there was a figure that for every euro put in, there was somewhere between 8 and 38 Euro in benefit coming back out. The UN had a figure of $1 and $10 coming out. So there's a lot of return of investment coming in, but indirectly.
But I think going back to the point is when I see the roadmap, I think, and I might be slightly wrong here, I thought in the communique about this and in the roadmap itself, it says this isn't. Instead of resourcing from a national and from public goods, it's in addition to.
Sure, yeah, I think it's. I can see where friends in New York are coming from with this because it's always important to flag the need to have adequate resourcing.
I think with this figure from the global biodiversity framework about the cost of protecting. We're not seeing governments spending this money on biodiversity if we're going to be realistic. We're just not seeing them putting the money in. They could argue that maybe they should, but they're not at the moment. And I think credits is a way of helping push that and take action and push it in that direction. I'm not saying it's the only solution, but I think it's part of the solution. I think Commissioner Rosman and President Van der Lijen did an op ed in several papers. I think they were pretty clear in this saying that they really wanted it to be and you know, nitrocredits and public financing instead of. But I don't think it's greenwashing in that aspect. I would think if you looked at the roadmap, you read it and said what was meant to happen. I think the certificates, the certifier and this registry and the generating the credits, when you read it, it starts talking about the certificate is really about an independent body assessing the plans and the methodology. So there's a quality in there. The credits can only come when you're going to nature positive outcome. So if you have that process quite robust and independent, you should in principle have credits coming out that are actually nature positive, so it shouldn't be greenwashing in that regard. No, you are right. And there's another point in that I think he might have mentioned to her. I heard it in the question somewhere about maybe offsetting. And one of the what the nature credits tries to does. I don't know if it's explicit in the roadmap or not, but it does connect across to what we call the mitigation hierarchy. This is kind of a, you know, you've got avoid, minimize, restore, compensate, offset, these four different parameters, and this is embedded in the Environmental Impact Assessment Regulation, but also in the birds to have that directive. This is kind of the principle of how you should operate. So when you should avoid things, then you should minimize and you should restore. And maybe that's where the credits really comes in. And then the next stage after that is if you can't do your avoid minimizing restore, you should compensate and offset.
There's definitely a few schools of thoughts about that. There is one school of thought that says credits should not be used for offsetting. There's another school of thought that said offsetting credits are bedfellows and they can go hand in hand. I think the reality is probably somewhere in the middle, but I haven't looked into it enough myself to really understand. And I think the roadmap from the commission was, I think, opened up a few questions about that. I think in principle it wants to reward the activities that are happening.
So you would the market potentially then giving resources for people to protect and restore nature for the fact that you're protecting and restoring it, and not necessarily from an offsetting perspective, but I think you do see from the carbon market that there is an offsetting element in there. So how the market can regulate itself or if it is wanted to go for offsetting, I don't quite know, but it's definitely one of these open questions that need to be discussed.
I think the roadmap is quite brave to put it out there and say that there are open questions that need to be discussed, but maybe we can start the conversation now without it being perfect and acknowledge where there's areas for improvement rather than waiting for it to be perfect.
[00:44:33] Jackie De Burca: Yeah, absolutely.
[00:44:34] Brian MacSharry: You know, dotting every I, crossing every T.
There are definitely schools of thought and I've read literature on the pro and the con against offsetting and they've been very well written, they make a very good argument. And at the end of it I've said I can see the point from both Personal bias, and you know, this is purely me speaking as a, as a nature lover, is that it really should be about helping fund the restoration, protection of nature for the sake of restoring and protecting nature.
[00:45:02] Jackie De Burca: You mentioned Brian, Ursula von der Leyen, for example, was one of the people giving op eds naturally enough, after this. And I have a quote for her from her here and she says, and I think it's very straightforward and can be very easily digested by like an average person. We have to put nature on the balance sheet. That's exactly what nature credits do. When well designed, they will provide an efficient, market driven instrument that encourages the private sector to invest and innovate. With investment and innovation, we generate revenue for those who work to protect nature.
[00:45:38] Brian MacSharry: Yeah, I mean, I think I obviously would agree with everything you just said there from the President, but I think it's very well articulated and I think it really, it positions what the roadmap is aiming to be.
And I think, you know, this putting nature on the balance sheet has been something that a lot of people have been spoken about for a while and it's always been the how. And I think this roadmap is, is a step in that right direction. A big step, I would say.
But for me, statements like that in the op ed I think is very clear.
A lot of discussions. And it was last September at a conference in Munich, the President said something about this, about nature credits was the first real public discourse about it. And she said things very similar at the time.
And for me, when I read this and I listen to those different presentations, it's very clear what the ambition from the European Union is about. This is put it on the balance sheet.
It's helping.
And it is really about protecting and restoring and mobilizing the market to allow that and put in funding for nature and recognizing the importance of nature and how it basically pays for itself.
You know, we know nature is the cornerstone of our economy and businesses depend on it.
The World Economic Forum, I think in 2020 said half the world's GDP is moderately highly dependent on biodiversity. The rest of it still is, but maybe to a lower extent.
So having any kind of conversation where it connects that business world to the rest of the nature world and the financing, I think is to be supported.
[00:47:11] Jackie De Burca: Absolutely. Now in your opinion, Brian, and I know we're talking, you know, at a time where there's only a roadmap there. So it's literally a conversation right now. But how can nature credits genuinely incentivize private sector actors without undermining regulatory obligations? Or public responsibilities.
[00:47:33] Brian MacSharry: They have an obligation to adhere to different regulations, the nature directives, the nature restoration regulation. They have an obligation to address and resource those needs independent of any nature credits. That's what they have to be doing and they should be doing. They are often held accountable for that.
So for me, nature credits are on top of that and I think it's very easy to track that as well. You know, I think the budgets are generally public information about how much has been spent on different areas, so you can start tracking that. But for me, what I've read, it's very clear it's an add on, not an instead of Part of it is then how credit scene can recognize what is being done on one end. And a very simplistic version, they could say you've done X amount of work, it is having a major positive outcome, you get a credit for it, it's kind of some certification credit for doing that work.
Then if that can be used to attract additional funding to put into it, it will start closing that gap with that 700 billion a year that is needed to, you know, restore and protect biodiversity globally. Obviously the figure for Europe is a lot lower.
So I think the language to date has very much been that is an additional, not an instead of or replacement of. But I think we need to keep an eye on this. And there's different groups around Europe who are doing a very good idea of keeping this under review.
And I think a lot of it then is to start seeing how can we work together to ensure that there is a credit system that is quality based, that is additional based and that is helping put money back into nature and restoration to the pockets of those doing the work and to help them, help them and help us, you know, a more positive nature. For the last number of years, I've had a lot of meetings with different government ministers from across the world and they all are pretty common what they're saying. They said, we know we have a large role to play in protecting, restoring nature. I said, we don't feel it's exclusively our obligation to do it. Private sector should come in and help with this as well. Because if you're going to be using resources and using nature, put some of it back in. A lot of times when I'm talking to governments, they're not saying we don't want to protect and put money in. It's just saying we know what proportion of the budget goes into it, what proportion can we afford to put into it? And there's always, people like me will argue it should be higher than it is.
They're never saying it should be zero. They're always saying, we know we need to do this. But they also want other people to come in and help as well. I mean, if you look at who owns land in Europe, it's not the country's own large amount of land, it's a lot of private landowners, a lot of people using the land, a lot of businesses in land. How can they be mobilised to get credits? How can they be mobilised to invest in credits to help restore the environment?
I think these are some open questions and there's several expert groups being created by the Commission to help answer some of those questions.
[00:50:36] Jackie De Burca: If you, Brian, could actually develop and design the ideal nature credit system separate to your job and separate to any other constraints, what would that look like?
[00:50:47] Brian MacSharry: Wow. It's a good question. I think if I had the solution, I'd probably be doing it right now. But I think if I was to design the ideal situation, I think I would have there will be a company whose job it is to develop protocols one to identify what needs to be protected, what needs to be restored. So what would be sufficient for an activity to happen?
So if there's an area of really good biodiversity, maybe I don't need money in there to restore it, I might need money to protect it. Is there sufficient money going in so some kind of workflow to say, well, does this need money to restore, does it need money to protect? On what level? So I'd have some kind of way to understand the need of a particular area. I would then and again, in Europe we have this, we have, with the State of Nature report, we have a lot of information about those.
I would then work out who are the actors in the area who could do this work, like landowners or NGOs or companies, etc. So kind of work out that you have people who could do something.
I would then start looking at what's the best practices to move it to a positive. So if I have a particular habitat in a poor, bad condition, what are the pressures on that?
And then what's the inverse of those pressures? What are the solutions to those?
So maybe looking at these habitats, maybe at a superficial level and then diving down into a deep, into a local level, what is it that I want to achieve?
And be very clear about that, how am I going to achieve it and what am I achieving it again? So what's my barrier for success?
Have some kind of matrix about those so I can start tick boxing things and have a list of activities. And then have I say, well, if I do all of this, what would I expect to happen? And that could be a series of generalized indicators like I expect the population to increase, I expect the physical condition of the habitat to increase.
Something that I can actually tick box and say I'm seeing this, I'm seeing this. Once I have that in process, I would then say there needs to be a regular monitoring process.
So again, I bought a field in Ireland, for example, and I'm going to restore a wetland in my field.
I should be very clear about what I want to do, what my barriers are and what success look like. So there's a pond that has been very, you know, if it's drained or something like that, I'm going to re drain it, I'm going to have wetlands, I know what my ideal should look like and I start then I'd have to have a monitoring program on that to start tracking the change that I see. That could be using drones, it could be using field visits, it could be using expert judgment, it could be using environmental DNA to track. If I have different species coming in, there's a few different mechanisms you can use. Some are very intensive, some are less intensive. And again you get a gradient of the quality coming from those different ones. So I developed a system in place where I can start tracking progress towards my aims. And obviously I want to have aims that I can monitor. So again, use a specific, measurable, achievable, realistic and time bound. So I should have a project management approach to that. Once I have that done, there should be some way of certifying that and then putting into a secure register so that it's open and transparent. This is, you know, Brian has bought a field in Ireland, he's restoring a wetland. This is his five year annual monitoring plan. His five year monitoring plan so far, tick, tick, tick, it's all going very well. And then there should be these periodic reports as to what is the state of nature, what's the positive aspect since my baseline.
And again that's pretty challenging. But maybe if you take a slightly overview on things, you might be able to find some things that you can start establishing that there's an improvement, an upwards or downwards, you know, positive and negative trend from certain things. I would then have a system where I would have that in place. So I could say that field, we can see there's a change in land cover, we can see it's moving more towards natural. I can see there's increase in number of birds, the number of species in there. All this is pointing in the right direction, it's nature positive. Then bang, I get a credit from that.
My credit is linked then to the activities I'm doing.
And then that is maybe on the market, if I suddenly don't bother doing anything or do negative things, maybe that credit decreases. So I think there has to be some continual connection between the credit and the certification, so that if I keep on doing good work, my credit gets more and more valuable.
And that would be kind of my ideal system, that I would work out what needs to be done and where, who are the actors who can do this?
And of course, then you want to work out the market, obviously, those. So I always kind of think there's some friends of mine working in NGO in Kenya and they're always looking for funding and they work with the local community. I kind of thought, well, that would be an ideal example of where they've got very clear objective is to restore mangroves and they want to work with the local community in that as well. So you're kind of, you know, having a very good social dimension to that. But you can have very clear metrics about the number of mangroves that are planted, how many are surviving after a year, two years, three years, four years, five years, what's the land use change happening in that area? And you can kind of match some of those, and that would be really good is to give them some certificates saying you have the intent and then track that over time and then suddenly see how does that land change.
And then you get some credits that could go back into that local community and give them resourcing. Because my friend who runs this ngo, he's always looking for resourcing to come in and often he's got to write these new novel projects every few years to get more funding.
He says, often what he's doing, he's saying the same thing, but he's going to put a spin on it. Oh, this is about engaging the community. Oh, this is about carbon, this is about nature.
[00:56:15] Jackie De Burca: Sure.
[00:56:15] Brian MacSharry: And then for me, that kind of project would be ideal for a credit because you've got really keen people who are doing something positive for nature and it can be tracked.
If we can have some kind of certificate for what he's doing, and then that certificate is this robustness, then I think from there onwards, you've got a quality in there. So what you're saying is somebody's going to do something very positive, they're open about it, they're going to be held accountable for what they're doing. And they've got a good plan in place and they've got metrics in place to track what they're doing, how it's improving things, and they've been clear about what improvement looks like.
And of course, you might need to have some standards on that if you're going to do something at a European or a global level.
What success looks like for me or for you might be slightly different. But for me, when I look at it and I kind of think of a few examples that I'm aware of, I can see how this could work. I think if I was to bring the several examples in my head that I know of together, there might be a need to have some tighter language on certain things.
But then it's about getting the market, how do I attract people to get these credits so that my friend who's got this NGO in Kenya can actually keep on getting funding for it?
[00:57:26] Jackie De Burca: That's it. I mean, what you've mentioned about your friend is such a good example, actually, Brian, because his energy could be then 100% focused on the actual work as opposed to what am I going to do this time around to find funding to get the good work done.
[00:57:39] Brian MacSharry: You know, that's what they say, is that sometimes you've got to be very innovative in some of the funding, and sometimes it's about X, sometimes about Y.
If we could just get consistent funding, we could do so much. And that's on top of other government funding that maybe other areas in that region get that they may not get.
So it's a lot of it is, I think for me, credit's at the simplest is when things are working. We know there's a lot of really good success stories across the planet of where people, governments, individuals, companies are doing things that are having a nature positive outcome.
It's documented, it's measurable.
How can they be rewarded? And then how can they become kind of exemplars for other people to copy them and say, hey, I'd like to do that. And you know, a lot of times people want to do the right thing, but they have to live at the same time.
If I set up my company doing this and I'm making a fortune from it, the people doing the work on the ground, they're making a good living from it. Those companies working on that, they've got a stable resource coming from, all comes back to me is this kind of big circle saying we're so dependent on the economy is so dependent on nature.
It's very difficult to quantify that exactly but we know it is the better quality nature is the reduced risk we have, and the more actions we can do to reduce the risk in our economy, the better.
[00:59:01] Jackie De Burca: I think the other thing. I wonder, Brian, are there pilot projects happening at the moment in the eu?
[00:59:06] Brian MacSharry: There are, there's. There's several pilot projects. I don't know them off the top of my head.
[00:59:10] Jackie De Burca: Yeah, that's fair enough.
[00:59:10] Brian MacSharry: Yeah, I know there are. The, the, this note, the roadmap in mention is a few in France and Estonia, and I think it mentions ones in Ireland and a few other countries as well. And so the people who wrote this, now, they're aware of the exact ones. But there's this other paper I think I alluded to as well. It had a list of different projects across the. Across the world. They've got this nice little map in there with I think, about 20 or 30 different examples, and that's ones that they were just aware of.
[00:59:37] Jackie De Burca: Yeah, okay, but that's. Look, look. I mean, obviously that's where it has to start. So listen, it's like loads and loads of information.
It is a roadmap at this stage for those.
Brian, with your expertise and your passion is like an understatement in your case is often a horribly overused word for nature. What would you like to leave with the listeners? How they could support biodiversity in a meaningful way, whether they're just normal citizens or policymakers or business people.
[01:00:10] Brian MacSharry: Good point. I think for me, the first thing is to recognize and appreciate.
I think you interact with biodiversity every single day, whether you realize it or not. And maybe pausing every now and again, just think about, like today, you know, for example, porridge this morning for breakfast with honey. So the porridge came from the wheat fields. They needed to have a certain fertility from. The honey came from some bees. They needed to have pollinators. Pollinators nearby to allow me to have my honey. I had some chocolate earlier on. Chocolate grows in the tropics and equatorial regions. It needs pollinators to. So my bar of chocolate I had today was thanks to ants and small little flying insects flying around, you know, the equatorial regions of the world. I cycled into town today, rubber on my bike. Rubber comes from a rubber tree.
So everything I'm doing actually has a really strong biodiversity connection. And that's something, I think, maybe if the audience could say, actually, what. What is my dependency on biodiversity? Pause for 10, 20 seconds and think about it. You'll probably be really surprised by how much of what you eat, use, interact with is really dependent on Nature and biodiversity. And just think about what would happen if something happened to one of those things. So I could have no porridge in the morning or cotton is changed. And you can see this with the price of cocoa, for example, I think it went up 400% in two years because of biodiversity loss and climate crisis. And it's one of the reasons why if you go to your local chocolate aisle and you look at chocolate bars, there's an awful lot of bars of chocolate and something like chocolate and biscuit, whereas 10, 15 years ago it was just chocolate of different percentages. Now you've got chocolate mixed with lots of different things. And that's because the price of cocoa has gone so high that companies need to reduce the size, but they also need to put other things into it. So that your classic bar of chocolate that maybe we all had when we were kids, that's rarer than all the other chocolate and different things, but it's because of the price of cocoa is going up because of biodiversity crisis. So I think, yeah, think about it, reflect upon it and then if you can put your money where your mouth is and, and think about how can I buy things that are more nature positive?
How can I talk to my local officials about, you know, my local area when there's a parliamentary election?
What are my politicians doing about it? Because, you know, we're all voters, we're all consumers, companies do listen to us depending on what we spend. Politicians do listen to us depending on how we vote.
And I think, you know, we all really depend on it. So, yeah, pause, reflect and you'll be pretty amazed by how much you really depend on biodiversity.
[01:02:54] Jackie De Burca: Brian. I think we're going to call that a wrap on such a very actionable note that you've left the listeners with.
Thank you so much for your time, Jackie.
[01:03:03] Brian MacSharry: It was my absolute pleasure. You take care of yourself.
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