This category includes voluntary instruments designed to compensate for planned impacts on nature. It includes all voluntary carbon, wetland and biodiversity offsets as well as any other nature based offsets such as water quality, water temperature, stormwater capture, and other forms of company actions to reduce or offset its climate, land and water footprints. Offsets that are required by banks and other investors can be included in this category if there are not regulatory requirements (i.e. compulsory offsets) obliging a business to implement or finance an offset (compulsory offsets are included in Economic Instruments). Voluntary biodiversity offsets are primarily seen around mining and other extractive industries, hotels in sensitive ecological areas, and can be combined with other incentives towards land or water stewardship. As an example, there is an annual State of the Voluntary Carbon Markets report that surveys the status of voluntary carbon offsets.
REDD+
Reduced Emissions from Deforestation and Degradation (REDD+) is a climate mitigation practice that reduces carbon emissions through documented changes to forest protection and management practices. Since forests are important repositories of carbon, reducing deforestation or improving forest management can avoid the emissions of carbon. REDD+ can secure financing for protecting forests and for enhancing sustainable forestry practices. Currently available through voluntary carbon markets, REDD+ projects may be part of national compliance mechanisms in the near future. REDD+ projects seek to include biodiversity and social criteria in their design and implementation and are a very cost effective means to climate mitigation.