The stacking and bundling of ecosystem services credits has emerged as mechanisms to promote the conservation of biodiversity in carbon sequestration schemes. Globally, apart from a few certification standards in the voluntary market, little genuine action has eventuated, but actors in these markets are continuing to examine the idea of combining carbon and biodiversity credits. This paper provides the first empirical analysis of the opportunities and barriers of bundling and stacking carbon and biodiversity credits as articulated by policymakers and academics, in Australia. Corporate social responsibility (CSR) acts as a driving force for business interest in the co-benefits of carbon plantings; however, uncertainty in the market and policy settings act as barriers for both buyers and sellers. Interviewees highlighted substantial benefits of both bundling and stacking, including easing transaction costs for landholders, reduced monitoring costs for regulators. Nevertheless, there is a risk that stacking can affect the perceived additionality of carbon plantings, which has the potential to erode the integrity of carbon markets. Obstacles to the establishment of stacked/bundled markets include the lack of standards to show that co-benefits are real, dealing with the additionality rule, and designing scenarios to achieve genuine outcomes for both biodiversity conservation and carbon abatement.
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