A bog for a bog
A system similar to emissions trading could spare biodiversity for future generations. Professor Markku Ollikainen proposes that destruction caused by land use be offset by restoring nature elsewhere.

Everywhere in the world, biodiversity is dwindling at an alarming rate due to land use, and current legislation cannot stop the continuing destruction of entire species. This despite the fact that biodiversity is our most important resource in battling climate change, and can help us adapt to it.

Markku Ollikainen, Professor in Environmental and Resource Economics leads a team of experts from the University of Helsinki and the Finnish Environment Institute who are looking for a solution to this huge problem.

They are developing a compensation mechanism similar to emissions trading. The founding principle is to create a market where an institution damaging biodiversity would pay to promote biodiversity elsewhere to a degree commensurate with the destruction caused.

Landowners to receive restoration compensations

“In practice, a company interfering with biodiversity would pay compensation to the landowner, who would then use the money to restore natural areas,” explains Professor Ollikainen.

For example, Finland has many areas which could be restored, according to Ollikainen – bogs, low-productivity forests and agricultural heritage biotopes on the brink of destruction.

“Supporting biodiversity through restoration would render these areas financially productive and ecologically valuable. The amount of compensation would be enough to cover the costs, so restoration would be financially viable.”

Universal model with local markets

The purpose of the mechanism is to direct human involvement into areas where the associated damage can be compensated for. In practice this would only apply to the most common species and biotopes. Areas with the most valuable biodiversity would remain protected by law, as the offset value would be too high.

This “trading” system would completely exclude areas and species which are endangered or close to becoming so.

“The idea is for the compensation to cover the loss of biodiversity. This means that overall biodiversity would not be reduced,” Ollikainen emphasises.

The mechanism being developed is universal and the team intends to share its experiences with the world, but according to Ollikainen, the market should be national.

“Biodiversity is largely local by nature,” he points out.

Bogs bind carbon and produce berries

Our dwindling bog biotopes are a Finnish example of areas that would profit from such a compensation system. It would enable people to benefit from the ecosystem services provided by bogs: carbon binding, reduced flooding, as well as cranberries and cloudberries.

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This kind of mechanism has not previously been attempted in Finland in the field of environmental protection. The research group believes that the system could generate jobs in environmental stewardship and bring new sources of income to rural areas.

Professor Ollikainen’s team Biodiversity now is a semifinalist in the Helsinki Challenge competition, organised to celebrate the 375th anniversary of the University of Helsinki.  All 20 semifinalist teams will take the stage in the University’s Great Hall on 3 September. The event is open to the public, but advance registration is requested.