Recently, ALCA appeared before the Environment and Communications Legislation Committee to provide evidence to the Senate Inquiry into the Nature Repair Market Bill. The advice and recommendations given at these inquiries help the Senate to shape laws and to make better-informed decisions.
Different perspectives about the Nature Repair Market Bill were heard at the inquiry. While this has resulted in a delay to the committee’s report into the legislation, there was alignment from a number of presenters, who understand that with further development, the Bill can create an opportunity to deliver positive outcomes for nature.
What is a nature repair market?
The Nature Repair Market Bill would set up a new, voluntary system where eligible landholders can register and certify biodiversity conservation and restoration projects. Projects would have to use approved methods, and outcomes would need to be verified, resulting in certificates that could be sold to public or private investors, and tracked through a national register. It is intended to stimulate investment in biodiversity conservation and restoration.
Why do we need a nature repair market?
Australia has seen the largest documented decline of biodiversity than any other continent in the world. With half of our GDP moderately or highly dependent on nature[i], the accelerating nature crisis must be urgently addressed, and requires significant investment if we are to prevent a sharp decline in our social and economic wellbeing.
In short, a high integrity nature repair market can help to close the funding gap for nature in Australia.
Globally we need to close a financing gap to address the biodiversity crisis[ii]. At a domestic level, the price tag to restore 98.8% of Australia’s degraded land is AU$2 billion (0.1% of Australia’s 2019 Gross Domestic Product) annually for 30 years[iii]. Further, it has been estimated that the likely cost of recovering Australia’s listed threatened species is approximately $1.6 billion per year[iv]; and the estimated costs of managing high priority terrestrial threats in Australia would be upward of $1 billion per year[v].
Federal biodiversity spending in Australia is less than half a percent of the annual budget[vi]. Globally, philanthropy dedicated to environment and climate change remains small in comparison to other causes (just 2.1 – 5.8%[vii]), though the rate of donation and bequest giving to environmental charities in Australia has increased in recent years. A nature repair market cannot and should not be a replacement for substantive Government investment, but the chronic and structural underfunding by both State and Federal governments combined with the sheer scale of the need for investment in nature is so great, that private sector assistance is critically important.
As business deepens its understanding of its nature-related dependencies, frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) will push investment into biodiversity. One mechanism that is suggested to drive financing towards the protection, regeneration and stewardship of biodiversity, and begin to close the biodiversity financing gap are biodiversity credit markets[viii]. The positive effort and intent of business cannot be harnessed to its full extent without strong standards and regulation that could be provided through a high integrity nature repair market.
What does a strengthened Bill look like?
Our members will be critical to deliver the on-ground conservation work under a nature repair market – and so we appreciate the importance of getting the market right. ALCA have provided ongoing feedback to the development of the Bill.
We welcomed the constructive amendments as advocated by ALCA, proposed by the House of Representatives’ crossbench, and ultimately agreed to by the Government. They have strengthened the integrity and purpose of the market, and opportunity for First Nations peoples and small businesses to participate.
However, ALCA remains unsupportive of the market being used to facilitate environmental offsets. Environmental offsets are compensatory mechanisms and are used to facilitate land clearance and destruction of native vegetation and habitat. Markets for offsets have failed to deliver on their promise of achieving even a status quo outcome for nature.
We also continue to call for further strengthening of integrity provisions, and to more clearly articulate Government policy priorities for market participants.
What next for the Nature Repair Market Bill?
As a peak body for private land conservation, ALCA represent organisations working tirelessly to protect, manage, and restore nature on privately managed land. The diverse range of landscapes encompassed by private land conservation sees our members working across Australia in remote, regional and urban communities, and in partnership with First Nations groups, landholders, scientists, farmers, businesses and nature conservancies. Collectively, we invest more than $280 million into the environment every year and create positive impact for biodiversity across 3 million km2. We understand the urgency and scale of the challenge.
Protecting our environment is, fundamentally, a public good and is undertaken to the collective benefit of all Australians. ALCA members do this critical work, currently supported primarily through philanthropy, to address some of the greatest environmental challenges of our time. As recognised in the most recent State of the Environment report[ix], by increasing the extent and diversity of habitats protected, private land conservation plays an increasingly important role in achieving effective and long-term conservation outcomes.
We will continue this critical work. A robust framework that supports private investment in nature will help us to meaningfully engage with business and scale up our work. The private land conservation sector has a key role to play in the effective delivery of outcomes for biodiversity under a nature repair market. Alongside increased government investment, a high integrity nature repair market has the opportunity to facilitate the financial support needed to maintain and expand the work of the private land conservation sector in reversing nature decline.
The Bill as it currently stands may not be perfect, but it is worth working with to get right
[i] See: Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy, January 2020; https://www.weforum.org/reports/nature-risk-rising-why-the-crisis-engulfing-nature-matters-for-business-and-the-economy/
[ii] See: Financing Nature: Closing the Global Biodiversity Financing Gap; 2020; https://www.nature.org/en-us/what-we-do/our-insights/reports/financing-nature-biodiversity-report/
[iii] See: The costs and benefits of restoring a continent’s terrestrial ecosystems; 2021; https://besjournals.onlinelibrary.wiley.com/doi/epdf/10.1111/1365-2664.14008
[iv] See: Spending to save: What will it cost to halt Australia’s extinction crisis?; 2019; https://conbio.onlinelibrary.wiley.com/doi/pdf/10.1111/conl.12682
[v] See: Averting extinctions: The case for strengthening Australia’s threat abatement system; 2022; https://invasives.org.au/wp-content/uploads/2022/04/Averting-extinctions-The-case-for-strengthening-Australias-threat-abatement-system-April-2022.pdf
[vi] See: Federal government spending on Australia’s environment and climate; 2021; https://d3n8a8pro7vhmx.cloudfront.net/auscon/pages/18803/attachments/original/1620346645/Federal_Environment_and_Climate_Budget_Analysis_-_May_2021.pdf?1620346645
[vii] See: AEGN, Environmental and Climate Change Giving Trends; 2022; https://www.aegn.org.au/environmental-and-climate-change-giving-trends-2022/
[viii] See: Biodiversity Credit Markets: The role of law, regulation and policy; 2023; https://www.naturemarkets.net/publications/biodiversity-credit-markets