An influential biodiversity market may not direct investment towards habitats of national importance

Biodiversity markets are proliferating globally, aiming to increase private investment to address conservation financing gaps. Markets commodify biodiversity to facilitate trade of biodiversity ‘units’ even across heterogeneous ecologies. However, the metric used to commodify biodiversity can strongly influence which habitats become valuable in biodiversity markets, and there has been little research on whether the biodiversity incentivised through markets maximises conservation value or is aligned with higher-level conservation goals. Here, we address this gap by using an ambitious national biodiversity market as a case study. We simulated habitat transitions in England’s Biodiversity Net Gain metric to investigate which habitats deliver biodiversity gains from common habitat baselines, and explored how well these habitats aligned with those outlined in national conservation targets. Our results suggest that the biodiversity metric works well to incentivise avoidance of biodiversity impacts, but without policy coordination, the investment generated by biodiversity markets risks being allocated towards activities that do not maximise conservation potential.