The parliamentary committee scrutinising Australia’s nature repair market (NRM) legislation has had its reporting date extended indefinitely, potentially delaying the passage of the bill in the Senate.

“We are committed to working collaboratively with others to get better outcomes for nature – so we are giving the Senate committee the extra time they have requested before we bring it back to the Parliament to pass later this year. This is simply good government,” Environment and Water Minister Tanya Plibersek said in a statement to Carbon Pulse.

The Senate Environment and Communications Legislation Committee, which is assessing the governing legislation, was originally meant to submit its final report by Aug. 1, before the legislation was put to a vote in the Senate.

Carbon Pulse understands the final reporting date on the bill is now up to the committee.

Plibersek went on to defend the legislation, designed to establish a government-backed voluntary market for biodiversity credits, which she has previously described as potentially creating a “Green Wall Street” in Australia.

“The nature repair market will drive investment in projects that repair nature and support our nature positive agenda. It’s backed by groups including the National Farmers Federation, the World Wildlife Fund, the Northern Land Council, and Landcare,” she said.

The extension came as the committee held a public hearing where long-held concerns with the legislation in its current form was raised.

“I’d argue, that the evidence that we’ve got before us today has crashed Green Wall Street,” Greens party Senator Sarah Hanson-Young said.

“This policy is in tatters.”

The government’s bill is in the hands of the Greens and several independent crossbenchers, following the Coalition’s decision to revoke its support for the bill.

CART BEFORE THE HORSE

Many stakeholders at the hearing raised previously-held concerns relating to the scheme allowing biodiversity credits to be used for offsetting purposes, arguing that it would be the main source of demand from the market.

They also argued that the government was putting the cart before the horse, by focussing on creating the NRM before reforms to the Environmental Protection Biodiversity Conservation Act reforms were in place.

Frances Medlock, commonwealth solicitor with the Environmental Defenders Office (EDO), noted the reformed EPBC Act would include the national environmental offset standard, which is still under development.

“It’s that offset environmental standard which will hold all the safeguards and controls, and a lot of these legal requirements which prevent offsetting from having an overall net loss result,” she said.

“Without having that piece of work completed, there’s a real risk that the market, if it is to be used for offsets, which we don’t support, would result in an overall net loss to biodiversity, we won’t see these really critical protections sitting in law.”

Gabriella Warden, government relations and research manager with the Carbon Market Institute (CMI), told the committee that given the urgency of the need to repair nature, that the government could implement the market while reforming the EPBC Act, but greater clarity was needed on how they would interact.

“CMI would like to see a more comprehensive view that articulates how the NRM will factor into the outcomes of ongoing EPBC reforms … as it is being set up,” she said.

“This task is really urgent, but obviously this market is not the only solution, strong public direct funding and regulation is also needed, but I think we need to build the plane as we’re flying it.”

EDO’s Medlock said the yet to be established Environment Protection Australia, a new federal environmental regulator, would be better equipped to oversee the scheme than the Clean Energy Regulator (CER).

“It’s got to be a well-equipped, independent regulator, responsible for compliance and enforcement, rather than a completely new function tacked on to the Clean Energy Regulator relating to biodiversity,” she said.

Medlock said the passage of the bill should be delayed until the EPBC reforms were fully implemented.

Australian Capital Territory Environment Minister Rebecca Vassarotti told the committee that the federal government had shared a draft of the new national offsetting standard with state governments this week.

Megan Evans, environmental policy researcher with the University of NSW, also questioned the CER’s ability to govern the scheme, due to the controversies of its management of the company’s carbon market, “let alone a far more complex biodiversity market,” she said.

Speaking at the hearing, Clean Energy Regulator Chair and CEO David Parker said the organisational infrastructure required to assess carbon was not dissimilar to biodiversity, but noted expertise would need to be brought in.

“The methods, processes, and IT structures, which are quite significant in the carbon area, they can be adapted and applied to a certificate and other things… the technologies and methods for running the market, and all of the things around that, are very, very similar,” he said.

“We will recruit and we will build the expertise to fulfill that function, just as we have done for our existing functions.”

CER officials said the government had given the regulator A$7.2 million in its latest budget to begin designing the implementation of the NRM within the regulator, with A$6.9 mln available in the new financial year.

ENVIRONMENTAL RISKS

Concerns were also raised with the fundamental purpose of the market, with some arguing it could potentially increase the cost of nature restoration, given that investors would expect to see returns on their investment.

“We’re struggling to get the work done that we need to get done. I can’t imagine how you could set up a system that has somebody out there who is going to have to pay for it all, and then get a 7% return on their capital,” Tim Beshara, policy and strategy manager at the Wilderness Society said.

“I don’t want to effectively elevate the cost of that activity we need to get done, and this is something I’m really worried about with this bill, it hasn’t been addressed so far.”

However, World Wildlife Fund Australia Conservation Economist Joshua Bishop, told the panel that traditional models for conservation and regulation could no longer be relied upon given its failure to achieve positive outcomes so far.

“We do need to mobilise more forces in society, we do need to mobilise the private sector, we need to look for ways to incentivise conservation on productive land, and in productive seascapes, and one of the ways to do that is to have clear standards and methods to verify real and additional outcomes from investments in conservation,” he said.

“Our understanding of the NRM bill is that it is primarily about establishing an architecture to develop credible methods, to verify outcomes and investments in biodiversity, conservation, and restoration.”

However, independent Senator David Pocock said the objectives in the regulation were “nebulous”, adding that there had been calls for the government to embed a clear and credible investment strategy into the market itself.

He also argued that the contested science in the country’s carbon market proved that the same issues could occur in a biodiversity market, and that it may not achieve the government’s desired outcomes.

“The risk here is forced onto nature, rather than actually having a scheme that is payment for outcomes,” he said.

“It seems like a huge risk, given where nature is at in Australia.”

By Mark Tilly – mark@carbon-pulse.com