The Australian government should clarify the purpose of its planned biodiversity market and rule out the use of credits for offsetting purposes for at least three years, according to an umbrella organisation for some of the nation’s biggest conservation groups.

The Australian Land Conservation Alliance (ALCA) on Friday published the main points of its submission to the ongoing Senate inquiry into the nature repair market bill, outlining what it considers key amendments needing to be made to the pending legislation.

In it, the group argued that the government had yet to make clear which specific policy intentions or priorities it intends the new biodiversity credit market to meet.

“In short, the nature repair market appears broadly framed as a ‘good idea for biodiversity’, but without any clear signal or statement in the bill as to specifically what good outcomes for biodiversity it will leverage and deliver in practice,” ALCA stated.

“Given the complexity of biodiversity projects, there is also a heightened chance of market failure due to ‘information gaps’ – namely, gaps in available knowledge and expertise between buyers and sellers.”

Admitting the government will likely find it difficult to amend the bill’s ‘objects’ in parliament at this stage, the group recommended instead the government pursue a Biodiversity Investment Strategy instrument, through which it can provide market guidance and set policy priorities.

Through such an instrument, the government could keep the market abreast with its public policy intentions, provide guidance on future intended rounds of government purchase of credits through the scheme, and deliver signals to the market on what it considers priority areas.

“By virtue of being a legislative instrument rather than being enacted in the head legislation, [the instrument could] maintain the government’s ability to be responsive, flexible, and relevant to the policy priorities of the government of the day,” ALCA said.

Additionally, the group also addressed elements to help ensure the integrity of the new market, such as making sure the regulator cannot be both the purchaser and issuer of biodiversity certificates – an arrangement that has sparked a great deal of controversy in Australia’s carbon market.

It also stressed that projects in the nature repair market should be vetted by biodiversity auditors, and not greenhouse gas and energy auditors, as the draft legislation proposes, given the latter groups are already accredited under the national carbon offset scheme.

“ALCA recognises that utilising existing greenhouse gas auditors is legislatively simpler, and that it can be expected that there will be auditors who can operate across both the carbon market and nature repair market,” the alliance said.

“However, greenhouse gas auditors do not automatically possess the skills required to audit biodiversity projects. Instead, the Bill should contain a separate registration scheme for biodiversity auditors to guarantee that they possess expertise specifically relevant to the monitoring and assessment of biodiversity.”

DROP THE OFFSETS

The Labor government has yet to clarify whether or to what degree credits issued in the new nature repair market can be used for offsetting purposes.

Last week, an environment ministry official told a conference in Cairns that regulators are considering creating different methodologies – some eligible for offsetting and others not.

ALCA became the latest in a long line of stakeholders – most recently carbon project developer Climate Friendly – to ask that offsetting be excluded from the scheme, at the very least for an initial three-year period while lessons were being learned.

“Environmental offsets are compensatory mechanisms and are used to facilitate land clearance and destruction of native vegetation and habitat. They are fundamentally inconsistent with objects of the act, and with the assumed intent of a market focused on ‘nature repair’,” the group said.

“For these primary reasons, ALCA does not support the inclusion of environmental offsets in the nature repair market.”

The conservation group said it was especially worrying that the draft legislation includes no information on how offsets would be traded in the market, and said the prospect of offset trading dominating the nature repair market could both significantly skew the purpose of the market and undermine its biodiversity outcomes.

Should the government decide to go ahead with offset trading anyway, ALCA asked that the name of the legislation be changed to the national biodiversity market bill, and urged the government to at least rule out offsets for the first three years to allow for teething problems, especially ones associated with credit integrity.

“Noting the general policy failure of offsets markets to deliver on their promise of achieving even a status quo outcome for nature, a serious premium requirement for offsets to ensure that the nature repair market genuinely facilitates a net positive outcome for nature,” said ALCA.

“This premium should take into account the issues in other environmental offsets markets related to delays between land clearance and restoration outcomes, policy slippage, and other distinctly suboptimal outcomes for nature they create.”

ALCA represents 15 groups and companies, including Australian Wildlife Conservancy, GreenCollar, Greening Australia, Queensland Trust for Nature, the Nature Conservancy Australia, and WWF Australia.

By Stian Reklev – stian@carbon-pulse.com

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