This is Australia’s chance to turn back the clock on biodiversity loss

The Federal Government recently closed the second round of community consultation for its Nature Repair Market legislation. It’s not a silver bullet to solve the biodiversity crisis, but it’s a start.

Article by Stephen Dunne, Chair, Greening Australia

The introduction of this Bill will enable landholders who protect, manage or restore native habitat to receive biodiversity certificates which can then be sold to other parties, funnelling capital into ecosystem repair.

The Nature Repair Market could play a critical role in addressing the alarming environmental decline highlighted in the 2022 State of Environment Report by generating much-needed investment. A recent PWC report reveals the opportunity the biodiversity market presents, with the ability to unlock $137 billion in financial flows if it is developed and delivered effectively.

Though the legislation is still a draft and the conversation around its function and form is evolving week by week, the development of this new market is a productive step towards a nature positive future. But the market needs to be as robust as possible, guided by the following key considerations.

Integrity first

First and foremost, to reach its full potential and deliver the environmental outcomes Australia so desperately needs, this market must be fundamentally based on integrity, transparency and delivering tangible benefits for biodiversity. The current draft is light on detail, with important supporting material not yet available. This includes the methodologies and biodiversity assessment instruments that will help define the expected outcomes for nature.

The South-eastern Red-tailed Black Cockatoo is just one of hundreds of threatened species and ecological communities in Australia that could stand to benefit from a well-designed Nature Repair Market that delivers tangible biodiversity gains. Image: Jennifer Goldsworthy

Learn from and integrate with the carbon market

The lessons learned from Australia’s carbon market must also be taken on board. The recent public scrutiny into the carbon market, which prompted an independent review of Australian Carbon Credit Units (ACCUs), hasn’t been incorporated in the development of this Bill, with the Government’s own important findings not yet being considered or addressed in the draft legislation for the Nature Repair Market.

Integration between the carbon and biodiversity markets is also essential, making it easy and attractive for landholders and investors to participate and reap the benefits. There needs to be steady supply and demand from the get-go.

Private landholders will be key players in the Nature Repair Market. Photo: Hayden Dib.

The Government must invest

To stimulate this supply and demand flow, the Australian Government must lead by example and step up as cornerstone investor in the market. Essentially, we in the environmental sector are asking the government to put its money where its mouth is. If it does, private investment will follow.

We’ve seen this investment snowball effect proven time and again from our front-row vantage point at Greening Australia, and are consulting closely with government, other environmental organisations and key voices to help build this new market.

For example, in October 2020 the Queensland Government and HSBC were announced as the first-ever private and public sector buyers of Reef Credits, a tradable unit that quantifies and values work undertaken to improve water quality flowing to the Great Barrier Reef. In the years since, the Reef Credit market has attracted additional investment from private investors and business including Qantas, demonstrating how initial government backing can catalyse private investment in environmental outcomes.

Avoid offsets

But we must not trade biodiversity benefits in one pocket of the country for destruction in another. The Nature Repair Market should not support offsets as currently proposed. The market’s core function must be to direct investment into repairing our damaged environment, rather than creating opportunity to replace further habitat lost to development.

Across Australia there are hundreds of thousands of hectares in need of urgent restoration. Photo: Jesse Collins

It’s up to the Government to ensure this Bill makes it through to final legislation, taking on board the feedback provided by many voices such as ours during this consultation period and beyond. The proposed biodiversity market is an opportunity for Australia to be a true pioneer when it comes to tackling the twin crises of biodiversity loss and climate change. If we get this right, we will become global leaders in this space, realising benefits for investors and landholders alike.

Read Greening Australia’s full submission on the proposed Nature Repair Market legislation here. For further information on this article, or any other Greening Australia news, please send us an online query.

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