Nature Repair Market: game changer or misstep?
Last month Environment Minister Tanya Plibersek introduced a Nature Repair Market Bill to parliament which aims to establish a market-based scheme for habitat protection. The proposed Nature Repair Market will create financial credits for landowners who restore and protect habitat. At first glance, this initiative might seem like a good idea. The animals and plants don’t care about whether the land they are on is private or public, or where the money comes from. And most land in Australia is private and unprotected.
Biodiversity markets are a relatively new approach to conservation. Creating a market for biodiversity credits which can be bought and sold like carbon credits, they can incentivise conservation. But like any policy instrument, they come with benefits and risks. And there are significant implications for First Australians.
A key benefit is the potential to generate new funding streams for conservation. Through biodiversity credits, conservation projects can attract private investment. This can help fund and scale up efforts. New funding can also be beneficial in areas where traditional funding has been limited. And markets can help promote efficiency. Market-driven mechanisms can provide incentives to achieve biodiversity goals at lower costs, and more efficient and effective efforts can ultimately contribute to conservation of more species.
But the risks are high. One risk of significant concern to me is the potential commodification of Nature, which can lead to a situation where conservation efforts are only pursued where financial benefits exist. There would be winners and losers in the competition for protection and restoration. And these species or habitats would depend on commercial rather than science-based priorities.
Another major risk is that credits could be used to offset or even create negative impacts, rather than supporting genuine conservation efforts. We’ve seen this in carbon markets - analysis from the Australia Institute is worth a read. Submissions on the bill from Humane Society International, the Australian Conservation Foundation and the Wilderness Society all urged biodiversity credits be barred from use as environmental offsets. “By financialising the destruction of nature, offsets allow destructive players to continue business as usual,” the Wilderness Society said.
Market-based mechanisms can also lead to a ‘problem fixed’ mentality and allow governments to avoid dealing with the problem through regulation. The ACF urged Minister Plibersek to deliver the government’s election commitment to bolster national environment laws and introduce new national standards for development assessments, before embarking on market reforms.
One certainty is that a Nature Repair Market will affect First Australians. With over 60,000 years of experience, First Australians are experts on biodiversity conservation on this continent. If managed well, a market-based scheme could benefit First Australians by providing revenue for communities and individuals, supporting the growth of traditional land management practices, and creating employment and business opportunities. But without their genuine involvement and consent, a Nature Repair Market could be detrimental to First Australian interests. It could lead to privatisation of natural resources and impact the rights of First Australian communities who rely on country and have cultural and spiritual connections to it. Additionally, financial incentives could lead to a situation where conservation efforts are pursued at the expense of Indigenous rights. The government will thus need to involve First Australians actively in the development and implementation of any Nature Repair Market that emerges. This will need to include consultation, co-design, recognition and respect for traditional knowledge and practices, and ensuring First Australians’ rights are respected.
Given that Australia and the world is facing a biodiversity crisis, I don’t think we can afford to be ideological about measures to protect and restore the environment. As a trained economist and private land manager at Wombat Ridge Nature Reserve, I’m open to private sector participation and market-based solutions. But they are not a panacea. And they bring significant risks. Like the ACF, I’d rather the government start by strengthening laws to protect Nature. In particular, that means ceasing land-clearing and native forest logging. And given the spiralling impacts of climate change on biodiversity, banning new fossil fuel extraction projects and moving as quickly as possible to strengthen the Safe Guards Mechanism and establish a zero-emissions economy.