Stakeholders are reacting cautiously to the government’s proposal to establish a national biodiversity market in New Zealand, saying that it is a good idea in principle, but the government’s handling of the existing carbon emissions trading scheme gives some little faith in Wellington to administer such a programme.
Last week, the government launched a consultation on a proposed voluntary biodiversity scheme, seeking views on how the market should be constructed, its underlying principles, and how it should interact with existing policies and schemes.
It also released a National Policy Statement for Indigenous Biodiversity (NPSIB), which requires all regional councils to now implement a biodiversity strategy that prioritises nature.
BONFIRE
Trade and forestry groups told Carbon Pulse the idea of a market to incentivise protection of biodiversity was sound, but were hostile to the idea of the government pursuing such a scheme when they had yet to deal with the numerous issues facing the country’s ETS.
“I’ve long held the idea that a biodiversity market is a worthwhile pursuit, I just have no confidence in the New Zealand government to do anything market-related in respect to New Zealand’s climate change response, given what they have done to destroy the [ETS],” Chris Insley, chair of Maori trade group Te Taumata, told Carbon Pulse.
“I think New Zealand is a complete basket case right now to even begin thinking about these other markets. How can they even start to have a discussion about any other kind of market, whether it’s biodiversity or anything, when they’ve completely trashed what was a perfectly good market that was actually working?”
Ollie Belton, managing director of Carbon Forest Services, described the biodiversity market consultation as a “sideshow”.
“We’re trying to save the ETS right now, and [the government] has just put out a biodiversity consultation when there’s a bonfire going on in the ETS,” he said.
“If you want to do something that has real impact, rather than start another market that you’re going to mismanage and blow-up, say ‘hey, we really want people to do more pest control and land management, we’re going to do grants, apply for them’.”
Digging into the consultation, Belton said he was wary about the idea of stacking multiple different credits types on top of one another, arguing that it added undue complexity to an already highly technical scheme.
“We’ve always tried to market our premium carbon credits from native forests as a stacked credit, with additional co-benefits, without trying to quantify them too much,” he said.
“I’ve never been a great fan of splitting these things up, it’s complicated enough as it is.”
He was also sceptical about the level of demand for biodiversity markets, a sticking point that has been raised in consultations for other national biodiversity schemes.
“We’ve been active in the voluntary carbon market in New Zealand for 15 years, and I can tell you it’s a hard slog,” he said.
Insley, meanwhile, said the proposed market should allow international parties to buy credits for offsetting purposes, arguing that it would help ensure Maori landholders are rewarded for conservation work they were doing.
“Yes it’s hypocritical, but the critical point right now is we own these pristine assets, and we get nothing for them, and yet the New Zealand government stands to benefit from them,” he said.
“That’s the other side of it. We know there’s value, if anyone gets value, it should be us.”
HOUSEHOLD SILVER
Geoff Keey from conservation group Forest & Bird told Carbon Pulse that offsetting should be banned from the scheme, pointing to the failure of offsetting in other jurisdictions, such as the Australian states of New South Wales and Victoria.
“The experience in Australia has shown us that it has not resulted improvements for nature, it’s almost a case of selling the household silver to afford the polish,” he said.
Keey was also sceptical about the government’s ability to oversee such a scheme, given that previous experience of local councils’ monitoring of natural resources in the country had been “patchy”.
“How is the whole system going to be monitored to make sure that people are actually doing things that they need to protect nature, and that nature is benefiting?” he said.
Carbon Forestry Services’ Belton supported the idea of the government acting as cornerstone source of demand to stimulate growth in a proposed market, but was sceptical that landholders, particularly farmers, would want to engage in such a scheme.
Primary industry group Beef + Lamb NZ said livestock farmers were already actively protecting and restoring indigenous habitats, and it was critical that their work was recognised.
“However, the NPSIB itself will add substantial costs and a significant time burden on landowners and likely still make biodiversity a liability,” B+LNZ Chief Executive Sam McIvor said.
The National Policy Statement, which will be rolled out in a phased approach from Aug. 4, aims to provide clearer direction on how to identify, manage, and protect areas of significant biodiversity, according to the government.
B+L NZ said it wanted an integrated approach that would support landowners to integrate and manage biodiversity as part of a productive farming system, and where their efforts were recognised.
“Over the coming weeks, we will be analysing the changes in detail and considering what they mean in conjunction with the consultation around biodiversity credits,” McIvor said.
“Sheep and beef farmers are facing significant regulatory and economic challenges. As it stands, this NPSIB will have a major impact on our sector.”
BASIC PRINCIPLE
Belton said ultimately the government’s main focus should be to restore trust and confidence in the ETS, before pursuing other market-based schemes.
“The main risk is that it’s a waste of time and money that should be put into shoring up other government policies,” he said.
“I would say just take a deep breath, sit back. The government needs a timeframe of a good couple of years before it even gets to a consultation … they’re just throwing out ideas without any real engagement.”
Te Taumata’s Insley made similar comments, saying the biggest risk of a government-backed biodiversity market would be the government itself.
“If they’re going to explore a market type mechanism, the first thing they have to get into their heads is to allow the market to find its own equilibrium, don’t keep interfering with it,” he said.
“I don’t think they’ve got that basic principle, so I don’t know if it’s going to go anywhere.”
Meanwhile, Forest & Bird’s Keey said the government needed to provide some incentive for private landholders to engage in biodiversity and nature restoration, but that it was too early to say whether they could outright support or oppose the proposed market.
“This is very early days, we’ll be having discussions with officials over the next few months. There’s going to have to be a lot of conversations before we have a fixed view,” he said.
The consultation comes as carbon exchange CarbonZ announced the launch of its own “biodiversity action credit” last week, which it said was designed to protect and enhance the country’s native species.
CarbonZ’s credit is for pest control action, designed for an impact-led way to get results on the ground.
The first project supported by the biodiversity credit scheme is the Eastern Whio Link, which protects a 30km section of river habitat for Whio, a native waterbird endemic to New Zealand.
Initially started in 2020, the project now includes more than 1,000 traps across 30,000 hectares of land protecting Whio as well as Kiwi, native bats, and other species.
The project has seen seven companies sign up to purchase the credits, including EcoStore, Victory Knives, and Troydon Contracting.
Since the launch of the consultation, another carbon forestry service company has put its hand up, saying it already has an existing methodology and credit scheme that could be applied to biodiversity markets.
The government’s consultation on the biodiversity market closes Nov. 7.
By Mark Tilly – mark@carbon-pulse.com
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