Another Sustainability Solution

Author/ Hsin-Ning Chao

Interviewee/ Ming-Jer Tsai, Director of National Taiwan University Experimental Forest Photos provided by the Experimental Forest, College of Bioresources in Agriculture, NTU

Studies confirmed that July 2023 could be the hottest month on record. The United Nations issued a stern warning, declaring that the planet has entered an “era of global boiling” and prompting people to seek “immediate and workable solutions” for issues such as energy transition, ecological conservation, food, and education. As part of this effort, Dr. Ming-Jer Tsai—Director of the Experimental Forest, College of Bioresources in Agriculture at National Taiwan University—proposed the “biodiversity credit” at the COP28 UN Climate Change Conference, gaining the whole world’s attention

The World Needs Practical Action

The COP28 to the UN Framework Convention on Climate Change took place in Dubai at the end of last year. This conference was highly emphasized as the first comprehensive review of carbon reduction achievements conducted by the UN since the signing of the Paris Agreement. During the 2-week summit, an Asian participant appeared at one of COP28’s important side events—the World Climate Summit (WCS)—earnestly advocating a new planning model that combines green economy and biodiversity preservation to achieve environmental sustainability. His idea received thunderous applause from the audience.

“We must tell corporate entities that investing in nature is investing in the future. If we are unwilling to invest in nature and continue to degrade natural capital, we will leave debts for future generations.” The speaker was Ming-Jer Tsai. After his keynote was concluded, other team members—Dr. TzungSu Ding, Chair of the School of Forestry and Resources Conservation, NTU, and Prof. Shu-Yuan Pan from the Department of Bioenvironmental Systems Engineering, NTU—expounded on detailed implementation measures. The professors spoke before a packed thousand-seat venue and left audience members so impressed that they continued to press Ming-Jer Tsai for more details and possibilities for collaboration after the speech ended. Since the upcoming speech was about to commence, staff had no choice but to request that the crowd continue their discussion outside

Emphasizing Biodiversity Credit instead of Carbon Credit

“In keeping with COP28’s theme of ‘Unity, Action, and Implementation’, I would like to share the fruits of NTUEF’s operations with all of you.” The biodiversity credit proposed by Ming-Jer Tsai isa financial instrument similar to the current carbon credit. Ming-Jer Tsai indicated that more than half of the global GDP—approximately US$44 trillion—relies heavily on natural resources. Nature’s resilience is based on diversity and abundance. If this is lost due to over-exploitation, mankind as a whole will bear vicious consequences. “Reinforcing biodiversity conservation will not only help us cope with climate change but can also enhance corporate entities’ resilience to extreme weather events. Therefore, instead of purchasing carbon credits, corporate entities should purchase biodiversity credits to restore the planet’s threatened biodiversity.”

Ming-Jer Tsai also explained how the team ended up in Dubai. “NTUEF is a member of the Asian niversity Forest Consortium, which is composed National Taiwan University, the University of and Seoul National University. A longterm partnership has been establishedfor achieving forest the long-term sustainable was invited CF) to step evel international conference and exhibition stage.

“From the perspective of less biodiverse European countries, NTUEF’s forest physiognomies and ecosystems are like rare gems.” Ming-Jer Tsai emphasized that planting trees or reforestation does more than maintain biodiversity; it can resolve the issues of hunger and poverty, improve health and water quality, prevent soil retrogression degradation, and reduce the risks of natural among other crises implicitly connected footprints. The NTUEF team led by MingJer Tsai received a warm response at experiences, advocated credits, and p>

What is Biodiversity Credit?

Species worldwide are facing extinction at an alarming rate. However, maintaining biodiversity is a longterm plan that requires extensive funding, and relying solely on public sector funds is not a feasible strategy to sustain relevant actions. In this context, the biodiversity credit system has been developed to encourage corporate entities to purchase biodiversity credits and commit to projects and actions for biodiversity conservation. This system is similar to the current carbon credit system, where corporate entities must pay to offset the carbon emissions generated during their operations.

As defined by United Nations Development Programme (UNDP), biodiversity credits can be classified into three types: conserving or avoiding the loss of biodiversity, restoring ecosystems, and supporting existing ecological conservation. The key to successfully implementing biodiversity credits lies in mechanisms for quantifying and tracking results while ensuring that funds are properly guided andcorrectly invested in locally led projects

Carbon Storage Rate Increased by 300%; Species Increased by 50%

NTUEF Headquarters, located in central Taiwan, has a 120-year history. The forestlands under its administration span Nantou’s three townships (Xinyi, Shuili, and Lugu), covering an overall area of 33,000 hectares and making NTUEF the second largest landowner in Taiwan. More importantly, its 3,700-meter elevation range encompasses tropical, subtropical, temperate, and frigid zones, demonstrating rich forest physiognomies that nurture diverse species. In 2005, NTUEF began to reclaim national lands and develop them into a self-operated forestry center to facilitate foothill zone restoration projects.

It took nearly 20 years for the thousands of hectares of hillside lands originally used for vegetable and tea plantations to be restored as man-made forests with structures similar to those of natural forests. Meanwhile, negative emissions technologies were employed to conduct longterm monitoring of biodiversity changes. As indicated by NTUEF data, the trees create good water catchments and produce timber and understory cash crops. Moreover, these manmade and natural forests can absorb 220,000 tons of CO2 per year, increasing carbon storage efficiency by approximately 300%. Furthermore, the number of mammals, birds, and butterflies in forestlands has increased significantly; even rare Formosan sambar deer, Mikado pheasants, and endemic orchids can be seen in the forestlands, representing an increase in species abundance of at least 50%.

“Planting trees is indeed a highly profitable business!” Ming-Jer Tsai added that NTUEF will also cut down trees and carry outreforestation as needed. The cut wood will be delivered to wood processing plants located in Shuili and used as materials for wood furniture or buildings’ interior structures. The wood waste will be used to make fuelwood pellets for power generation, thereby completing the forest circular economy cycle. All data indicates that rebuilding resilient nature-positive ecosystems can indeed enhance biodiversity, and corresponds to multiple core SDGs.

Spending Money to Save Trouble?

With the advent of carbon pricing,it isimpossible for corporate entities to achieve net-zero emissions solely by saving energy and reducing carbon emissions. In other words, the achievement of environmental sustainability can norely solely on carbon reduction. Investment in nature positivity should also be emphasized to offset resource consumption during corporate operations. NTUEF has been promoting reforestation among corporate entities for a long time. Ming-Jer Tsai has frequently suggested that corporate entities link reforestation with the nature-positive framework and add nature-related commitments and engagement into their TNFD (Task Force on Nature-related Financial Disclosures).

“When changes in trees, flowers, and the habitats of birds, butterflies, or insects become standards by which the public can measure a company’s value, corporations will realize that this is not a matter of charity, but a critical issue for their competitiveness and survival." Ming-Jer Tsai stressed that to prevent corporate entities from falling into the mentality of “spendingmoney to save trouble” by simply purchasing carbon credits without improving manufacturing methods that negatively impact the environment, the ideal solution is to require corporate entities to engage in environmental projects related to themselves. For example, essential oil companies may be advised to invest funds in communities where plants for essential oil extract are grown, and start their engagement in local communities.

In 2022, NTUEF joined hands with E. SUN Bank to carry out a millet restoration project in Xinyi Township, Nantou County. NTUEF members went to the United States and found 28 millet varieties that originated from Xinyi Township, which were then replanted on lands in Taiwan. Additionally, a Millet Cultivation Demonstration Zone was established to encourage participation from local residents. “At first, they also wanted to plant trees. But in fact, corporate entities can do more than tree-planting.” Ming-Jer Tsai revealed thatthe project’s first-year result was highly praised by the public, and E. SUN Bank was also willing to sustain the project investment for millet culture, ceremonial traditions, and planting methods to be integrated into school curriculum so that the scope of influence can be further expanded.

What is TNFD?

TNFD (Task Force on Nature-related Financial Disclosures) is an initiative promoted by the United Nations and G20 to guide corporate entities to disclose the impact of their operations on nature and the strategic planning for their short-, medium-, and long-term management risks in their financial information. The initiative is aimed at allowing business operators to fully understand the close relationship between their business operations and the environment so that they can make forwardlooking decisions and provide investors with relevant information as a reference for business performance evaluation.

Unlike the Financial Supervisory Commission mandated TCFD (Task Force on Climate-related Financial Disclosures), which focuses on greenhouse gas reduction, TNFD has extended its scope to the overall natural environment. TNFD has published a framework that can identify, assess, manage, and present nature-related financial risks, which corporate entities can join on a voluntary basis. Currently, 14 companies in Taiwan are included on the framework’s Early Adopters List, representing in the financial, electronics, consumer products manufacturing,and constructi on materials industries. Some more notable companies include Taiwan Cement Corporation (TCC) and O’right, a beauty/makeup products brand.

Inviting Academic/Research Entities to Establish Biodiversity Indicators

For corporate entities to incorporate the concepts of nature positivity, biodiversity, or biodiversity credit into their risk management and sustainability strategies, rigorous inventory and certification mechanisms are needed, similar to the current international certification standards for carbon pricing where 1 metric ton of carbon emissions is viewed as 1 unit. However, biodiversity credit, at the current stage, is only a methodology, and lacks an internationally recognized common system. Moreover, due to different environmental conditions in various parts of the world, conventions and international norms related to nature and ecosystems are constantly changing. For example, the United Nations adjusts the list of endangered animals and plants ever y year. Therefore, relevant biodiversity indicators must also be dynamically and flexibly adjusted based on actual situations.

Ming-Jer Tsai suggested that the government can classify Taiwan’s lands based on terrain characteristics into foothill zone, low-altitude zone, mid-altitude zone...etc., and take inventory of ecological data gathered by academic/ research entities over the years to build up a basic inventory database. This database can be used to propose nature-positive planning for future commercial development and industrial activities. Since the areas with the most significant biodiversity loss in Taiwan are in the foothill zone, he suggested that this zone can serve as the

Ming-Jer Tsai suggested that the government can classify Taiwan’s lands based on terrain characteristics into foothill zone, low-altitude zone, mid-altitude zone...etc., and take inventory of ecological data gathered by academic/research entities over the years to build up a basic inventory database. This database can be used to propose nature-positive planning for future commercial development and industrial activities. Since the areas with the most significant biodiversity loss in Taiwan are in the foothill zone, he suggested that this zone can serve as thestarting point for implementation. “NTUEF can take on the task of ‘measuring’ biodiversity. As for national parks that cover vast areas, the parks’ headquarters have invested many resources in maintaining natural ecosystems, through which long-term ecological data has been accumulated. Such data is a perfect resource that can be made available and used as a reference when formulating relevant indicators.”

Ming-Jer Tsai also revealed that the Taipei Exchange (TPEx) has noticed the potential for biodiversity credit to be securitized. If Taiwan can take the lead in securitizing biodiversity in the future and connect it with a series of relevant mechanisms, including biodiversity credit, TNFD, and green consumption business models, Taiwanwill have an opportunity to enjoy the advantages of early adopters and maximize social influence and economic benefits.

“Only by taking early action can Taiwan become a beneficiar y of sustainable economies.” Recently Ming-Jer Tsai has been actively engaged in giving advocatory talks and traveling between Nantou and Taipei every week to raise awareness among various companies. He does not consider it a burden, but is confident in the initiative he advocates, and hopes that more corporate entities will be inspired to join, thereby realizing a sustainable symbiosis between humans and nature.