Trend analysis: Nature-based solutions & ecosystem restoration — where the value pools are (and who captures them)

The global nature-based solutions and ecosystem restoration market reached an estimated $156 billion in annual spending in 2024, yet the distribution of economic value within this market remains highly uneven. Project developers capture only 15-30% of the total value generated by NbS interventions, while downstream intermediaries, technology providers, and financial structuring entities increasingly command the largest share of returns. Understanding where value concentrates and why is essential for sustainability professionals, investors, and policymakers seeking to align capital flows with genuine ecological outcomes.

Why It Matters

The United Nations Environment Programme estimates that global investment in nature-based solutions must triple from current levels to reach $542 billion annually by 2030 if the world is to meet its climate, biodiversity, and land degradation targets simultaneously. The EU Nature Restoration Law, adopted in 2024, requires member states to restore at least 20% of degraded land and sea areas by 2030 and all ecosystems needing restoration by 2050. China's national ecological restoration program has committed over $28 billion since 2016, restoring 52 million hectares of degraded forest and grassland. These regulatory mandates are converting what was primarily a voluntary, project-by-project market into a compliance-driven infrastructure sector with predictable long-term demand.

Yet the economics of NbS remain poorly understood by most market participants. Unlike renewable energy or electric vehicles, where value chains are well-mapped and cost curves are well-documented, the NbS sector lacks standardized cost benchmarks, transparent margin structures, and clear delineation of where value is created versus where it is captured. This opacity allows intermediaries to extract disproportionate returns while project developers, local communities, and the ecosystems themselves receive a declining share of total investment.

For sustainability professionals tasked with building NbS strategies, procurement programs, or investment portfolios, mapping the value chain is not optional. The difference between a high-integrity NbS investment and a value-extractive one often lies in understanding who captures margins at each stage of the project lifecycle.

Key Concepts

Value Pool Mapping identifies where economic returns concentrate across a value chain. In NbS, the primary value pools are project development (site selection, community engagement, baseline establishment), implementation (planting, restoration, infrastructure), monitoring and verification (MRV), credit issuance and trading, and downstream corporate procurement. Each stage has distinct margin profiles and competitive dynamics.

Payment for Ecosystem Services (PES) refers to structured financial mechanisms where beneficiaries of ecosystem functions (clean water, flood protection, carbon storage) compensate the stewards who maintain those functions. PES schemes operate in over 60 countries, with the largest programs in Costa Rica, China, Mexico, and the European Union. The global PES market was valued at approximately $42 billion in 2024.

Biodiversity Credits represent a standardized unit of measurable biodiversity gain, analogous to carbon credits but measuring species abundance, habitat quality, or ecosystem integrity rather than tonnes of CO2. The biodiversity credit market remains nascent, with pilot transactions totaling less than $100 million globally in 2024, but multiple frameworks (including the Taskforce on Nature-related Financial Disclosures and the Biodiversity Credit Alliance) are establishing the standards needed for market scale.

Stacking and Bundling refers to the practice of generating multiple revenue streams from a single NbS project by simultaneously selling carbon credits, biodiversity credits, water quality certificates, and flood risk reduction services. Stacking can increase project revenues by 40-80% compared to single-credit models, but it raises questions about double-counting and requires careful regulatory alignment.

Where the Value Pools Are

Carbon Credit Generation and Trading

Carbon credits remain the largest monetizable value pool in NbS, with nature-based credits trading at an average of $8.50 per tonne in the voluntary market in 2024, down from $12.40 in 2022 due to quality concerns and oversupply of lower-integrity credits. However, high-quality credits with verified additionality, permanence, and co-benefits command significant premiums, with ICVCM Core Carbon Principle-aligned credits trading at $15-35 per tonne.

The critical insight for sustainability professionals is that value capture in carbon credit markets has shifted decisively from project developers to intermediaries. Analysis of voluntary market transaction data suggests that project developers retain 20-40% of the final credit price, with the remainder distributed across validators, registry fees, brokers, and trading platforms. Technology-enabled MRV providers such as Pachama, Sylvera, and Planet Labs have inserted a new value capture layer, charging 3-8% of credit value for quality assessment and monitoring services.

Corporate buyers willing to enter into long-term offtake agreements (3-10 year forward purchase contracts) can bypass several intermediary layers, improving both price transparency and developer economics. Microsoft, Stripe, and Frontier have pioneered advance market commitment models that provide project developers with upfront capital at lower effective cost, while securing supply of high-quality credits at predetermined prices.

Ecosystem Restoration Services

Physical restoration implementation, including tree planting, wetland reconstruction, mangrove establishment, and peatland rewetting, represents a $45-60 billion annual market globally. This value pool is fragmented across thousands of small contractors, NGOs, and government agencies, with no single player commanding more than 1% of global market share.

Margins in restoration services vary enormously by geography and project type. Large-scale reforestation in the tropics (where land and labor costs are low) generates gross margins of 30-45% for experienced operators, while temperate restoration projects in Europe and North America operate on thinner margins of 10-20% due to higher labor costs and more stringent regulatory requirements.

Technology is beginning to reshape this value pool. Dendra Systems (formerly BioCarbon Engineering) has deployed drone-based seeding across projects in Australia, the United Kingdom, and Southeast Asia, reducing per-hectare planting costs by 60-80% compared to manual methods for suitable terrain. Mast Reforestation in the United States combines drone seeding with nursery operations, achieving survival rates comparable to hand-planted seedlings at roughly 50% of the cost. These technology-enabled restoration companies are capturing value by compressing the cost curve while maintaining or improving ecological outcomes.

Technology and Data Infrastructure

The fastest-growing value pool in NbS sits in the technology layer: satellite monitoring, AI-powered analytics, digital MRV platforms, and carbon market infrastructure. This segment grew at an estimated 35-45% compound annual growth rate between 2021 and 2025, compared to 8-12% growth for the broader NbS market.

Planet Labs provides daily satellite imagery covering the entire Earth's landmass, enabling continuous monitoring of forest cover, land use change, and vegetation health. The company generates over $200 million in annual revenue, with NbS and environmental monitoring representing a growing share of its customer base. Downstream analytics providers, including Chloris Geospatial and CTrees, transform raw satellite data into carbon stock estimates and deforestation alerts that feed directly into credit verification workflows.

Digital MRV platforms are capturing an increasing share of verification value that previously flowed to manual auditors. Traditional third-party verification costs $50,000-150,000 per project, with field audits required every 3-5 years. Technology-enabled continuous monitoring reduces verification costs by 40-70% while providing real-time data streams that improve credit integrity. The economic logic strongly favors technology-enabled approaches, creating a structural shift in value capture from labor-intensive audit firms to scalable technology platforms.

Biodiversity and Stacked Credits

The biodiversity credit market represents the most promising emerging value pool in NbS, though it remains pre-commercial at meaningful scale. Pilot transactions in 2023-2024, including projects in Australia, Colombia, and the United Kingdom, established early price discovery at $15-40 per biodiversity unit, depending on the methodology and ecosystem type.

The strategic significance of biodiversity credits lies in their potential to transform the economics of NbS projects that generate modest carbon benefits but significant biodiversity gains. Coral reef restoration, grassland management, and urban habitat creation have limited carbon credit potential but could generate meaningful biodiversity credit revenue once market infrastructure matures.

Stacking carbon and biodiversity credits from the same project area represents the highest-value configuration, but regulatory and methodological barriers remain. The Voluntary Carbon Markets Integrity Initiative (VCMI) has issued guidance permitting stacking under specific conditions, while national frameworks (including Australia's Nature Repair Market Act of 2023) are establishing legal structures for biodiversity credit generation alongside carbon credits.

Who Captures Value

Winners

Technology platform companies are the clearest value capture winners, building defensible positions through proprietary data assets, network effects (more projects monitored means better algorithms), and integration into compliance workflows. Companies like Planet Labs, Sylvera, and Pachama operate at 60-75% gross margins on their software and data products.

Large landholders and sovereign wealth funds with direct ownership of restoration-suitable land avoid intermediary margins and capture the full value stack from restoration services through credit generation. Finland's state forest enterprise Metsahallitus manages 3.6 million hectares and has positioned itself to generate stacked carbon and biodiversity credits from restoration activities on state land.

Advance market commitment buyers such as Frontier (the Stripe-led coalition) secure below-market pricing on future credit supply while providing the demand signal that enables project developers to secure financing. These buyers capture value through price arbitrage as credit quality premiums increase over time.

Losers

Small project developers without technology capabilities or direct market access face margin compression from both directions, as upstream input costs (land, labor, seedlings) rise while downstream credit prices face pressure from oversupply. Developers generating fewer than 100,000 credits annually struggle to cover fixed costs for validation, verification, and registry fees.

Manual verification and audit firms face structural displacement from technology-enabled MRV platforms that deliver equivalent or superior accuracy at lower cost. The transition from periodic to continuous monitoring reduces the volume of manual audits required, compressing the traditional verification business model.

Communities and indigenous land stewards in the Global South frequently capture the smallest share of NbS value despite controlling the land and providing the stewardship that generates ecological outcomes. Benefit-sharing arrangements in REDD+ projects typically allocate 5-15% of carbon credit revenues to local communities, with the remainder flowing to project developers, governments, and international intermediaries. This inequitable distribution represents both an ethical failure and a strategic risk, as projects without meaningful community benefit-sharing face higher rates of conflict, reversal, and reputational damage.

Action Checklist

• Map the full value chain and margin structure for any NbS investment or procurement decision, identifying where intermediary margins compress developer and community returns
• Prioritize NbS projects with technology-enabled MRV that reduces verification costs and provides continuous performance data
• Evaluate stacking potential for carbon, biodiversity, and ecosystem service credits to maximize per-hectare project revenues
• Structure long-term offtake agreements (5-10 years) with project developers to bypass trading intermediaries and secure supply
• Assess benefit-sharing arrangements in all NbS investments, targeting a minimum of 25-30% of credit revenues flowing to local communities
• Monitor the biodiversity credit market's institutional development, including the Biodiversity Credit Alliance and national legislation, as a leading indicator of the next major value pool

FAQ

Q: Which NbS value pool offers the highest risk-adjusted returns for investors?

A: Technology and data infrastructure currently offers the most attractive risk-adjusted returns, with 60-75% gross margins, 35-45% annual growth, and strong defensibility through data moats. Carbon credit generation offers higher absolute returns in favorable scenarios but carries greater regulatory, reputational, and impermanence risk. Biodiversity credits offer potentially transformative returns but remain pre-commercial and carry significant market development risk.

Q: How can sustainability professionals ensure that NbS procurement supports equitable value distribution?

A: Require transparency on benefit-sharing arrangements as a procurement criterion. The Verra Community and Biodiversity Standard and SOCIALCARBON methodology provide frameworks for evaluating community benefit-sharing. Direct procurement from community-managed projects, while operationally more complex, typically delivers 2-3 times more revenue to local stewards than intermediated transactions.

Q: What is the outlook for NbS credit pricing over the next five years?

A: Market consensus points to a bifurcation. Low-quality nature-based credits (without ICVCM alignment or robust MRV) are expected to trade flat or decline to $3-6 per tonne as supply exceeds demand. High-quality credits with verified additionality, permanence, and co-benefits are expected to appreciate to $25-50 per tonne by 2028-2030, driven by tightening corporate disclosure requirements and growing buyer sophistication. The premium for quality will widen, rewarding projects and platforms that invest in rigorous measurement and transparent reporting.

Sources

• United Nations Environment Programme. (2024). State of Finance for Nature 2024. Nairobi: UNEP.

• Ecosystem Marketplace. (2025). State of the Voluntary Carbon Markets 2024. Forest Trends.

• European Commission. (2024). "Regulation on Nature Restoration." Official Journal of the European Union.

• Integrity Council for the Voluntary Carbon Market. (2023). Core Carbon Principles, Assessment Framework, and Assessment Procedure. ICVCM.

• Biodiversity Credit Alliance. (2024). "The Biodiversity Credit Market: Defining Quality." https://www.biodiversitycreditalliance.org

• West, T.A.P., Börner, J., Sills, E.O., and Kontoleon, A. (2023). "Action needed to make carbon offsets from tropical forest conservation work for climate change mitigation." Science, 381(6660), 873-877.

• Planet Labs PBC. (2025). "2024 Annual Report." San Francisco, CA.

• Voluntary Carbon Markets Integrity Initiative. (2024). Claims Code of Practice: Guidance on the Use of Carbon Credits. VCMI.