Australia has embarked on an experiment to create a market for biodiversity. No, we are not talking about buying and selling wildlife, although unfortunately there is a black market for that. This is about restoring and restoring landscapes, providing habitat for endangered species, and getting business and philanthropy to help pay.
When Environment and Water Minister Tanya Plibersek de Bill Nature Restoration Market last week in parliament she said:
Just because something is hard doesn’t mean we shouldn’t do it. It means we have to do it right.
I agree with that. We have been publishing research on this topic for decades and discussing the issue with scientists, social scientists and economists. Now as chief scientist at the non-profit environmental organization Taking nature into account and chief councilor at the Biodiversity Councilwe are working hard to turn the theory into reality.
There are legitimate concerns about the integrity of biodiversity markets. However, with appropriate processes from governments, including independent authorities verifying biodiversity outcomes, and community vigilance, there is potential to create a well-behaved, net-positive biodiversity market in Australia.
Read more: The historic COP15 result is an imperfect game-changer for saving nature. This is why Australia made us proud
What does a biodiversity market look like?
Australia has joined the United Nations Convention on Biological Diversity, which obliges us to protect and restore 30% of the land for nature. This means 30% of any kind of habitat – it can’t just be deserts and salt lakes, for example.
That is a major task and governments cannot do it alone. It’s going to have to be the whole community, every single individual. It is not just about protection, much will be about habitat restoration, which will require serious investment.
Read more: The new big players in conservation? NGOs thrive while national parks struggle
The general public is increasingly concerned about the loss of nature in their local parks and backyards. An example is a nationwide concern about the disappearance of willie wagtails, a bird that many Australians have grown up with. The loss of nature affects everyone and can damage our health mental health. It’s not just about endangered species.
Concerns about the cassowary in the wet tropics of far north Queensland prompted environmental management organization Terrain NRM (natural resource management) to launch a new biodiversity market plan called Cassowary Credits. Terrain NRM says this is:
a mechanism that allows investors such as governments, philanthropists or corporations to pay landowners and land managers to carry out habitat restoration activities.
Australia has over half a million different species, and about a third of them have a name. You can’t run a market for that many species – so the challenge will be developing ways to quantify biodiversity that are credible and simple.
Fall and rise
A credible market needs a credible biodiversity currency (let’s call it a token). Such a token requires a lot of attributes to make it work. The token should be awarded for measurable results, such as an increase in the abundance of robins (a recently listed endangered forest bird and one of my favorites) on your property, or an improvement in the size and quality of native vegetation.
These outcomes must be “extra”, outcomes that would not have happened without the investment. Ideally, the results are permanent and go beyond what would have happened if we had done nothing.
And finally, someone has to want to buy them – there’s no point in making a product if there’s no demand for it. It will take time to create a reliable and valuable currency for biodiversity.
Nearly 3,000 years ago, the Lydians invented a currency based on metal coins with a ruler’s face stamped on them. That’s still pretty much how it works, even with most of our money now being digital, rather than physically in coins and notes. But even after 3,000 years, money is not perfect. The value is constantly changing and it can also collapse. Fraud and scams still exist – despite a global army of accountants, financial advisers, mathematicians and lawyers who are paid to ensure integrity.
In comparison, creating a biodiversity market is more complex than printing a face on a coin. Converting a multimillion-dimensional object – Australia’s biodiversity – into a market will require biodiversity accountants and biodiversity auditors, and strict laws to govern the new biodiversity markets. However, too much is at stake and too many species will continue to disappear if we don’t try.
Read more: Losing nature puts your super fund and bank at great risk
Rivers of gold
The government points out a 2022 PricewaterhouseCoopers report who found a biodiversity market could free up A$137 billion to restore and protect Australia’s environment by 2050.
It sounds imaginative, but it can be even bigger than that. The demand is there, internationally, and growing. Can we bring this investment to Australia?
The idea is that companies that want to prove they are “nature-positive” will pay for the privilege; some investments may also come from philanthropy. (Notably, this isn’t about “biodiversity compensation,” where people are forced to compensate for the harm they cause.)
The main issue is integrity – it is transparent evidence that actions have produced additional lasting results – much like biting a coin in 500 BC. to check if it is real gold. And that’s the system that we’re still struggling to create.
We are coming. Many smart people in the financial sector and the environmental sector are coming together to solve some of these problems. I find it both exciting and uncertain.
Time to be brutal
The federal government’s wildlife restoration law isn’t perfect. Many entries point to problems. But it’s a bold attempt. And we need bold efforts like this to get going.
If you get it, everyone really cares about huge trees, cassowaries and coral reefs, the nature that inspires them every day. We all love willie wagtails and would like to contribute. While governments still need to invest massively to restore landscapes and restore habitats for Australian native species, biodiversity markets could be a big part of a zero-extinction in Australia. All the more reason to give the biodiversity markets a try.
Editor’s Note: This article is adapted from an interview with the author published today at the Eco futurists podcast.