As nations prepare for the upcoming Convention on Biological Diversity (CBD) COP17 summit in Yerevan, international discussions surrounding biodiversity finance risk falling into a familiar and repetitive pattern. Year after year, global forums echo the same central themes: the world urgently requires vastly more financial resources to halt nature loss, traditional public finance remains wholly inadequate to meet the challenge, private capital must be actively drawn into the fold, and strict environmental and social safeguards are non-negotiable.
Yet, for India and a vast majority of the nations comprising the Global South, the pressing question is far more practical and immediate: where are the functioning, operational biodiversity markets?
The Kunming–Montreal Global Biodiversity Framework famously established an ambitious target to mobilize at least $200 billion annually for biodiversity conservation and restoration by 2030, explicitly recognizing biodiversity credits among its suite of innovative financial instruments. Despite these commitments, biodiversity-rich developing economies continue to depend overwhelmingly on conventional public programs, state-funded grants, and traditional development finance. If the international community genuinely expects private capital to make a meaningful and sustained contribution to global ecological health, countries can ill afford to spend another five consecutive years merely debating the theoretical mechanics of biodiversity markets. The imperative of the hour is to start actively creating them.
India Already Has Much of the Architecture
India is uniquely positioned to emerge as an early mover in this emerging economic landscape. The country already possesses a robust institutional architecture capable of supporting nature-based markets, anchored by the National Biodiversity Authority, a network of State Biodiversity Boards, and grassroots Biodiversity Management Committees. Furthermore, the nationwide presence of People’s Biodiversity Registers provides a deeply localized, scientifically grounded foundation of ecological information that few other developing nations can match.
In addition to these foundational institutions, India has successfully operationalized the Green Credit Programme, focusing initially on targeted tree plantation and eco-restoration efforts. This initiative has already generated valuable practical experience with complex administrative processes such as project registration, rigorous monitoring, and official credit issuance.
While this existing framework does not yet constitute a fully fledged biodiversity-credit market, it clearly demonstrates that India does not need to start from scratch. The Ministry of Environment, Forest and Climate Change, working in close collaboration with the National Biodiversity Authority, has the capacity to spearhead a National Biodiversity Credit Market pilot. Such an initiative could initially focus on high-value, ecologically critical ecosystems such as mangroves, wetlands, degraded forests, grasslands, and biodiversity-rich agricultural landscapes.
Under this proposed framework, participating projects would establish a clear ecological baseline, implement targeted conservation or restoration interventions, demonstrate measurable environmental improvement, and ultimately generate tradeable credits following independent third-party verification. Potential buyers could readily include Indian corporations, domestic financial institutions, and commercial enterprises actively seeking credible nature-positive contributions or verifiable biodiversity improvements integrated directly within their supply chains. Such a mechanism would effectively transform biodiversity finance from an abstract international commitment into tangible, investable local projects.
Create Demand, Not Just Credits
However, economic history and emerging market trends offer a clear cautionary tale: supply alone is entirely insufficient to build a sustainable, functioning market. India and other developing nations must deliberately construct local and regional demand at the exact same time they cultivate credit supply.
The nascent global market already offers a stark warning about the dangers of supply-imbalanced architectures. Data published by the Climate Policy Initiative in January 2026 revealed that less than $2 million in voluntary biodiversity credits had been traded worldwide, generated by only a handful of isolated projects. While a steady trickle of ecological supply is slowly beginning to emerge, corporate purchasing power and enthusiasm remain remarkably subdued. Consequently, the primary bottleneck holding back the sector is not simply the technical challenge of how to create credits, but rather the absence of compelling, credible reasons for businesses to purchase them.
To overcome this hurdle, India could begin by fostering a robust voluntary contribution market directly linked to corporate sustainability targets and comprehensive supply-chain strategies, rather than immediately attempting to construct a massive, highly liquid offset market. Companies whose core business models depend heavily on agriculture, water security, forestry, mining, infrastructure, or tourism could directly finance verified biodiversity gains. At the same time, forward-thinking financial institutions could incorporate verifiable biodiversity contributions into innovative sustainability-linked financial products, while commercial enterprises could invest directly in ecological recovery within their immediate sourcing landscapes through insetting.
Under such a practical model, a major agricultural corporation could choose to finance pollinator habitats, vital wetlands, and ecological corridors directly within its primary sourcing geography. Similarly, coastal businesses could financially support verified mangrove recovery initiatives, while mining companies could fund extensive biodiversity improvements that go far beyond mandatory legal rehabilitation. Transactions of this nature would successfully introduce a vital element that current biodiversity finance urgently lacks: a visible, reliable price signal for genuine ecological improvement.
The Global South Must Build the Market
This strategic opportunity extends far beyond the borders of India. Nations blessed with extraordinary biodiversity, including Brazil, Indonesia, Kenya, and South Africa, face an identical structural choice: they can either passively wait for complex methodologies, registries, and buyer rules to be designed and dictated from elsewhere, or they can proactively build domestic markets first and subsequently make them interoperable with international standards.
It is a fundamental ecological reality that biodiversity is not globally fungible. A coastal mangrove, an open grassland, a freshwater wetland, and a dense tropical forest cannot simply be reduced to a single, interchangeable, standardized unit. Therefore, countries across the Global South should prioritize developing methodologies that are specifically tailored to their own unique domestic ecosystems, rather than wholesale importing carbon-market architecture that was designed for entirely different environmental contexts.
India could pioneer approaches specifically suited for mangroves, wetlands, grasslands, forests, and agricultural mosaics, while African nations could construct robust models designed for expansive savannas, rangelands, and community-managed conservancies. Common, agreed-upon principles for scientific measurement, rigorous verification, and transparent buyer claims could later be established to facilitate secure international investment while ensuring that local ecological accounting remains firmly anchored in the realities of the field.
Furthermore, developing domestic registries, empowering local scientific institutions, and building indigenous verification capacity would enable biodiversity-rich nations to retain a significantly larger share of the financial value generated by these emerging markets, rather than remaining relegated to the role of mere suppliers of raw ecological assets for foreign intermediaries.
Do Not Wait for a Perfect Market
Market integrity is undeniably critical, but the endless pursuit of elusive, flawless rules must never be allowed to serve as a convenient bureaucratic excuse for prolonged inaction. The essential safeguards required to protect both nature and people are already well understood: credits must represent additional and genuinely measurable ecological improvement; environmental outcomes can never be sold twice; biodiversity credits must never be permitted to function as a license for unrestricted environmental destruction elsewhere; and the local communities who actively generate biodiversity value must receive a transparent, fair share of all resulting revenues.
Crucially, these vital safeguards should be built concurrently while markets are actively being piloted, rather than being debated endlessly in conference rooms before a single real-world transaction can take place.
COP17 provides a historic opportunity for the Global South to fundamentally reshape the conversation surrounding biodiversity finance. Developing countries should challenge themselves to ask not only how much external finance they hope to receive from international donors, but equally how they can independently create investable ecological assets, robust domestic demand, and fully functioning nature-finance markets of their own.
India is exceptionally well-positioned to be among the vanguard of these first movers. The true economic and environmental breakthrough will arrive definitively when the restoration of a degraded wetland or a coastal mangrove produces both a measurable, lasting ecological outcome and an identifiable, reliable financial return. The Global South holds the vast majority of the world’s remaining biodiversity; it must not remain merely its unpaid custodian while external actors build the financial architecture around it.
As delegations prepare for Yerevan, COP17 should mark the definitive historical transition from merely discussing biodiversity credits in principle to actively creating functioning biodiversity markets in practice.
(Reporting from New Delhi by Sayanta Ghosh, Associate Fellow, Land Resources Division, The Energy and Resources Institute – TERI)
