A financial instrument designed to offset activities that may damage wildlife in particularly fragile areas, such as rainforests.
In a similar manner to carbon offsets, in habitat banking landowners are encouraged to restore degraded land or protect virgin forest to enhance its conservation values.
In return, the landowner is permitted to sell credits to national or international companies or developers, enabling them to satisfy legal requirements compensating for the environmental impacts of their development projects in the region or elsewhere.
Although big in the US, where there is a $3bn (£1.91bn) market, habitat banking's global reach is nowhere near the size of carbon offsets.
Potential for schemes is particularly high in Central and South America, although concerns remain over monitoring and proving how effective projects really are.
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