A $600 payment to help koalas while destroying their habitat at the same time sounds like a farce but, in reality, is a program run by the NSW Department of Environment, and it has some critics up in arms.
Last week, Twitter users shared images of a NSW government website showing developers paid $600 for a credit to offset their impact on koala habitat.
This offset-trading platform is part of the state’s Biodiversity Offsets Scheme - a way to buy credits from landholders where the land may be developed or destroyed, in order to manage or restore land elsewhere.
In theory, offsetting helps companies counteract harm by allowing them to buy credits that can come in the form of land, or carbon capture. Giving to charity is an example of offsetting against tax to get a better return. But many critics argue that some biodiversity schemes simply allow organisations to pay a price to destroy valuable habitat.
Carbon trading had been the most controversial example of environmental credit mechanisms, but that was until a researcher exposed a platform that allowed developers to offset harm inflicted on the habitat of one of Australia’s favourite marsupials.
It’s not just koalas that are featured on the site. A lesser-known rufous bettong credit was last traded at $610 and a brush-tailed phascogale for $425. The controversy began when Polly Hemming, a researcher at the Australia Institute, shared a screenshot of the webpage to Twitter and joked she was going to “get in on” Cumberland Plain land snails “while the price is low”.
Hemming’s tweet sparked a series of responses mocking the NSW government scheme.
“You can eradicate living organisms, as long as you purchase ‘species credits’ of all the things you killed building your highway or gas plant or whatever,” a high-profile climate commentator tweeted.
The Biodiversity Offsets Scheme is not new, but it was the “stark” layout of the page, advising the ‘latest price for species credits’ that Hemming said stunned her.
“It’s so similar to other financial-instrument trading platforms and that really shows how sterile and rudimentary our ways of valuing nature are. I think it’s quite shocking,” she told Yahoo Finance.
Are koalas actually being sold for $600?
The Biodiversity Offsets Scheme is managed by the NSW Department of Environment (DPE) and it told Yahoo Finance the mechanism is actually a “robust and transparent way to measure and value impacts to biodiversity from development".
So how does the Biodiversity Offsets Scheme work? In a statement, the DPE explained that developers must first work to “avoid and minimise impacts” of their project on native species. If the project is still deemed harmful, the developer must then negotiate a dollar figure with the landholder. The platform allows those negotiating a price to view past sales and trends.
The DPE states that the amount on the website is not the set price for future trading, and one credit is not equal to a single occurrence of a plant or animal.
“A credit is a way to measure the gain in biodiversity that will be achieved through improving habitat, managing threats like weeds and pests and planting trees,” a DPE spokesperson said.
Plibersek says federal nature-trading scheme could work
Hemming told Yahoo Finance she became aware of the $600 koala credit trade while researching what she described as the “manifest failures of environmental markets” in Australia. She is interested in what the “broader implications” of a national nature-trading scheme, proposed by the Albanese Government, would be.
“Natural capital and environmental accounting aren’t new concepts, but it's certainly become a bit of a craze currently,” Hemming said.
“There's always been a price on nature, it's just been incredibly low, which is why we're in such a dire state in terms of our extinction levels and habitat decline in Australia.”
Looking at nature-trading schemes in general, Hemming said one question remained:
“Who is willing to ‘pay’ for nature? she said.
“There is no evidence that there is private capital ready to invest in nature without a return of some sort. The main reason being is because it is still more profitable to clear land and just ‘offset’ it with biodiversity credits.”
In August, as part of its commitment to achieving zero native species extinctions, the Albanese Government proposed a new “nature repair market” which would put a price on biodiversity.
Responding to concerns about the proposal, Environment Minister Tayna Plibersek told Yahoo Finance she didn’t want to put the option in “the too hard basket”, saying to do so would be “lazy, and betrayal of the environment”.
“Establishing a credible nature market will be challenging,” she said.
“We know that markets are only as strong as the trust and integrity that underwrite them. We must learn from the mistakes made in the design of similar schemes.”
What will a federal nature repair market look like?
Key details of the program were yet to be finalised, but Plibersek revealed some key objectives:
It will not be automatically tied to an offset scheme
It will not be a substitute for government funding
It will not be a substitute for “strong” nature-protection laws
“Previous efforts to establish such a market have focused on either farmers or as offsets for large projects,” Plibersek said.
“They haven’t been designed as large-scale, national markets with a variety of potential buyers and sellers.”
Plibersek argued that once the voluntary scheme was “properly structured and running” it would make it “easier for business and individuals to invest in better management of remaining pockets of vegetation”.
She said feedback she was hearing from businesses indicated their shareholders, customers, and staff wanted them to invest in nature.
“Global changes to accounting rules make it inevitable that businesses will start reporting on their nature-related risks,” the minister said.
“There will be an increasing public expectation that businesses act to reduce those risks ... Creating a nature-repair market, with proper integrity and transparency, gives these businesses and philanthropists a way to invest with confidence.
“It will allow them to buy a quality product: verifiable, well-regulated, nature-repair certificates, -so they can be sure their investments in protection and restoration have big environmental benefits, and those benefits are lasting.”