EURACTIVE reports that the European Commission is expected to publish an update of its sustainable finance taxonomy this week. This, they say, will set the stage for a showdown with green activists over biodiversity offsetting projects meant to compensate for the environmental damage caused by human activity.
“The EU executive is expected to propose new technical screening criteria for the taxonomy’s four remaining objectives – water, circular economy, pollution prevention, and biodiversity.
“The EU’s sustainable finance taxonomy classifies economic activities along a set of six green objectives, with the principle that they should make a “substantial contribution” to at least one and harms none of them.
Euractive says that “climate think-tank E3G praised the Commission’s proposed criteria on disaster risk reduction, saying “nature-based solutions for flood and drought risk prevention” as well as new adaptation criteria for global heating “are expected to be particularly good”.
“However, it also highlighted missing criteria in sectors like agriculture, fishing, chemicals and textiles as reasons for concern, saying those are “high-impact and high-risk activities” that should follow more ambitious criteria than just business-as-usual, E3G said.
“But the biggest worry for environmentalists is the inclusion of offsetting schemes in the economic activities related to biodiversity protection and nature restoration.
“Biodiversity offsets are nature conservation actions designed to compensate for the unavoidable impact on biodiversity caused by projects, according to the International Union for Conservation of Nature (IUCN). Typical projects involve protecting threatened forests or restoring wetlands, to achieve No Net Loss (NNL) and preferably a Net Gain (NG) of biodiversity, IUCN says.
Sébastien Godinot, an economist at the WWF’s European Policy Office said, “By definition, offsetting is a zero-sum game, so it can’t represent a substantial contribution required to enter the taxonomy.”
Moreover, Godinot says introducing biodiversity offsetting in the taxonomy would be “inconsistent” when carbon offsets were not included in previous rounds. “This is an essential point for us. I hope that the Commission will be sensitive to our arguments”.