AUSTRALIA’S NATURE REPAIR MARKET BILL: WHAT HAPPENED IN THE SENATE, AND WHAT NEXT?

by Dr Joshua Bishop Conservation Economist - WWF-Australia

I had the honour to represent WWF-Australia at a Senate hearing on 30 June about the Nature Repair Market Bill. Even before the hearing finished for the day, we learned that further consideration of the Bill has been delayed by the federal Environment Minister, Tanya Plibersek, due to lack of cross-party support in Parliament. The Nature Repair Market Bill (actually two related Bills) would set up a new system to register and certify biodiversity conservation and restoration projects on land or sea in Australia. Projects would have to use government-approved methods and outcomes would need to be verified. The resulting certificates could be sold to public or private investors, to help them meet their ‘Nature Positive’ targets. It’s an important set of reforms intended to stimulate investment in nature. And it’s in trouble. On 21 June the Bill passed the lower house, where Labor has a majority. The legislation then went to the Senate, where Labor lacks a majority and must make deals with minority parties to pass its legislation. However, both the Coalition (of the conservative Liberal and National parties) and the Greens have declined to support the Bill, while the independents have wavered. WWF-Australia’s position At the hearing on 30 June, I was asked to explain why WWF supports the Nature Repair Market Bill. I highlighted two core elements of the Bill, which would establish:

• A national, science-led, government-backed system to define metrics and methods for biodiversity conservation and restoration, supported by rigorous verification; and
• A public register of biodiversity projects, with standardised attributes to facilitate the comparison, aggregation and monitoring of progress towards Nature Positive targets, at regional and national levels.

Both are necessary elements of any national strategy to halt biodiversity loss and restore nature. In my testimony to the Senate, I also noted a more fundamental reason why WWF supports the Bill, namely the opportunity to build wider support for conserving nature. The Nature Repair Market Bill aims to address the significant funding gap for nature in Australia, by stimulating private investment in biodiversity conservation and restoration. WWF strongly supports this objective. Businesses can bring much needed finance and technical capacity to combat climate change and regenerate nature. WWF has learned from long experience that it is possible to mobilise substantial private investment in nature and build a business lobby committed to stronger environmental action, rather than opposing it. We also understand the tensions that arise between environmental objectives and the profit motive. Managing these risks requires both good governance and credible assurance processes to maintain confidence, and to minimise fraud and abuse. The Nature Repair Market Bill aims to establish a system of checks and balances to ensure that methods for nature repair are credible, market participants are ‘fit and proper’, projects deliver real results, information is easily accessible, government decisions are transparent, contracts are enforced, and rule-breaking is punished. The Bill sets out monitoring and reporting requirements as well as penalty schedules for infractions. Enforcement is critical and a role that governments must fulfil. Stakeholder concerns One of the main objections to the Bill, raised in written submissions and also at the hearing, is that biodiversity certificates could be used for offsetting. Several invited witnesses argued that this would undermine the intent of the Bill to ensure ‘Nature Positive’ outcomes. WWF agrees that biodiversity offsets should be excluded from the Nature Repair Market, at least until the market and a new offset standard are working as intended, backed by science. Other concerns expressed at the hearing included:

• The need to assess and stimulate private demand for Nature Positive outcomes;
• The need for substantial public funding to give investors confidence in the market;
• Aligning the Nature Repair Market with state and territory conservation initiatives;
• The timing of the Bill, which some suggest should be delayed until other pieces of the Nature Positive reform package are in place;
• A perceived risk that the Nature Repair Market could enable ‘double dipping’ by carbon projects, which might receive payments for biodiversity on top of carbon credits, without doing extra work;
• Potential adverse impacts of the market on the agriculture sector, food security and rural communities, including First Nations and interactions with native title; and
• Concerns about ‘financialisation’ and the risks of crowding out philanthropic and public funding, as well as unrealistic profit expectations and market volatility.

What next? Environment Minister Tanya Plibersek wrote on Twitter that the Senate will be given “extra time… to work through the detail before bringing it back to the Parliament to pass later this year”. The risk is that even with extra time, Labor may fail to secure enough votes and be forced to abandon the Nature Repair Market Bill. This would be a major setback to Australia’s environmental reform agenda. A compromise with the Greens should be possible, given their deep commitment to environmental protection. However, the Greens’ opposition to the current Bill, and silence about amendments that might win their support, suggests they want a different outcome. Can the Coalition be persuaded to reverse their opposition and support the Bill after all? The fact that the Bill is based on draft legislation they themselves developed should help make agreement achievable, if the engagement is based on merit-based policy making . Seeking compromise Failure to reach agreement on this Bill would undermine the Government’s biodiversity reform agenda. A better scenario is for Labor and other parties to find common ground to amend and/or pass the Bill. Key elements to maintain (or salvage, if it comes to that) are:

1. Standardised metrics, methods and assurance processes for biodiversity conservation and restoration projects; and
2. A public register of biodiversity projects, with standardised reporting to enable comparison and aggregation, and to monitor progress towards the targets set out in the Kunming-Montreal Global Biodiversity Framework adopted by Australia and the rest of the world in 2022.

Depending on which parties come to the table, other areas for compromise may include:

• A substantial federal budget allocation to ‘kick-start’ demand and build confidence among potential market participants;
• Postponing the use of biodiversity certificates for offsetting until a stronger offset standard is in place;
• Stronger safeguards to ensure that conservation investments do not reduce food security or undermine economic viability of agriculture and regional communities;
• Focusing first on agriculture, phasing in new methodologies and other ecosystems as the market develops, rather than beginning everywhere at once;
• Increased efforts to consult with forestry, fisheries and other affected industries, to ensure their interests are reflected in the design of new legislation; and/or
• A possible name change (e.g. 'Nature Stewardship Program’), to clarify what the Bill does and avoid alienating market-averse stakeholders.

A Nature Repair Market has the potential to be a game-changer for biodiversity conservation in Australia, provided it is governed with high integrity, attracts substantial investment, and is grounded in the best available science. If adopted, it offers the opportunity to mobilise much wider support for a Nature Positive future. This would include existing conservation organisations and scientists alongside private biodiversity project developers, Indigenous communities, service providers, philanthropic donors and for-profit investors, as well as governments. It is a vision worth supporting.