The Australian government should fund demonstration projects that will generate biodiversity certificates in its Nature Repair Market scheme in order to generate interest and understanding among potential participants, experts said on the side lines of the COP28 conference.

Australia’s world-first voluntary biodiversity market was legislated by Parliament this week, although the government has yet to say if it will underpin initial investments in order to build momentum in the scheme.

Pollination Foundation co-CEO Ariadne Gorring told Carbon Pulse on the sidelines of the UN-talks in Dubai that corporates would be interested in participating in the scheme thanks to it being developed and backed by the government, but said it would take time for them to figure out how to operate within it.

Initial investments by the government in early projects would help make the NRM more tangible to both buyers and sellers, she said.

“I think there needs to be a blended finance approach, so government investment can stimulate the private sector investment into those certificates, particularly to begin with,” Gorring said.

“There’ll be uncertainty from the private sector, and so being able to clearly communicate and build confidence in the market to drive demand will be critical to its success.”

She said government-funded pilot projects could help demonstrate how methodologies that generated biodiversity certificates worked on the ground.

“When we talk to the private sector they say [the NRM] provides a credible platform, but ask how do they have confidence the scheme will have integrity, and there won’t be greenwashing claims,” she said.

“The best way to do that is through partnerships, through designing projects together, and having multiple demonstration projects that can be scaled out and replicated to stimulate and grow the market that way.”

She said the development of Australia’s savanna burning Australian Carbon Credit Unit (ACCU) methodology was a good example of this process.

Concerns have previously been raised that without the government providing support for the market, participating landholders would resort to cheap and easy ways to earn certificates that would have poor outcomes.

Gorring told a panel discussion at COP28 that biodiversity markets alone will not address the finance gap for nature, and that structural funding support from governments are needed.

“Layering those sorts of foundational investments, and on top of that the carbon and nature credit opportunities as another revenue stream, layered indigenous cultural tourism, then you really start to get a diversified nature economy that’s going to get us where we need to be,” she said.

Gorring said she hoped that the government would make investment announcements to underpin the market now that the legislation was in place.

Environment Minister Tanya Plibersek said in a video message to the event that the government has a “primary role” to play to restore nature, but said all forms of investment are needed.

NOT EASY

Kushla Munro, at the Australian government’s Department of Climate Change Energy Environment and Water, noted the challenge of measuring the benefits of nature, biodiversity, and the local values associated with it, and a trial-and-error approach will likely be needed.

“Yes, we’ll get criticised, and we’ll take some risk here, but we need to move past it and say we’re going to value it. We probably won’t get it right all the time, but … from an integrity aspect, and for the government to be involved, you raise the bar, and I think that’s incredibly important to see these markets develop,” she said.

Gorring made a similar point, saying stakeholders would “have to get comfortable with a credible base and focus on continuous improvement, rather than expecting it to be perfect from the beginning”.

“These are all new models and new approaches, and we’re not going to get it exactly right the first time,” she said.

“It needs to be rigorous, but open to continuous improvement.”

By Mark Tilly in Dubai – mark@carbon-pulse.com

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