Environmental groups and nature experts have welcomed Australia’s Nature Repair Market (NRM) legislation being passed in Parliament with amendments to prohibit the use of offsets, however lingering fears remain about how this would work in practice.

The government successfully passed the NRM legislation in the Senate Tuesday, after it struck a deal with the crossbench to expand the scope of the so-called ‘water trigger’ and agreed to prohibit the use of offsets in the world first nationally-backed voluntary biodiversity market.

“We are really excited about this as an opportunity to bring additional investment into nature across Australia,” Environment Minister Tanya Plibersek told the ABC following the bill’s passage.

The Australian Land Conservation Alliance (ALCA) welcomed the bill’s passage, saying it would help address the significant funding gaps for nature in Australia by stimulating private investment in biodiversity conservation and restoration.

“A nature repair market will provide financial opportunities for more landholders … to protect and restore nature on their land – enabling us to scale up the work that is already being done to restore endangered ecosystems, build the protected area estate, tackle invasive species, and use nature-based solutions to mitigate climate change,” ALCA CEO Jody Gunn said.

James Trezise, executive director of the Biodiversity Council noted that Australia had a woeful reputation when it came to implementing biodiversity offsets, saying that the amendment to prohibit them was a “sensible move”.

“Conservation faces a chronic shortfall in funding nationally, and we need to ensure that funding for nature repair isn’t contingent on the destruction of nature elsewhere,” he said.

Multiple stakeholders noted however that the government was working on national offsetting standards in its Environmental Protection Biodiversity Conservation (EPBC) Act reforms, which meant the use of offsets would likely be legislated at a later date.

Industry body the Carbon Market Institute interpreted the amendment as meaning that biodiversity certificates would be separated from offsetting until the EPBC reforms were completed.

“The exclusion of biodiversity certificates from the compliance environmental offsets market while the government progresses further environmental reforms is important to ensure this world-first market delivers on its ‘nature positive’ mandate,” CMI CEO John Connor said.

Megan Evans, senior researcher at the University of NSW, told Carbon Pulse that the government had renamed offsets to “restoration contributions” in the draft EPBC reforms, meaning that offsetting could still be allowed under a different name.

“I don’t think the potential use of nature repair certificates as offsets [or] compensation by government has been entirely ruled out. This will continue to play out through the EPBC reforms,” she said.

STEP UP

The bill was also passed with amendments to ensure the government creates an investment strategy for biodiversity conservation programmes to help guide the market.

However, the government has not committed any direct funding to underwrite initial projects that would create biodiversity certificates in the scheme, despite a cross-section of stakeholders warning that government support would be crucial to stimulate interest in the market and underpin demand – especially if offsetting were not to be allowed.

Evans said without government support, landholders would likely be encouraged to develop “cheap and easy” projects where start up costs and additional outcomes are minimal, but said this could be prevented if the private sector committed to backing projects.

“It’s now also time for the corporate and finance sector to step up. If they are truly interested in becoming ‘nature positive’, they need to put their money where their mouth is and invest early in good projects that will do active and intensive ecosystem restoration that actively puts nature back where it has been lost – all of which costs money,” she said.

CMI’s Connor said the final operational details of the market will be critical.

“This includes development of biodiversity certification methodologies, how it will operate in parallel with Australia’s existing carbon market, clarity on government funding support, and ensuring clarity for investors in how biodiversity certificates can be used,” he said.

Amelia Young, national campaigns director for the Wilderness Society, emphasised that the NRM alone would not stop biodiversity decline and extinctions.

“Properly enforcing the current EPBC Act is the action we expect the government to be taking right now, while also reforming Australia’s nature laws,” she said.

By Mark Tilly – mark@carbon-pulse.com