Announcement date
29 March 2023
Link to announcement
Nature Repair Market legislation introduced to parliament | Ministers (dcceew.gov.au)
Problem being addressed
The Australia State of the Environment 2021 report highlighted a number of challenges to Australian biodiversity. Australians depend directly on the health of natural resources for positive economic, social, and health outcomes. At the current rate of decline, without intervention, the degradation of Australian ecosystems will have large impacts on the environment, economy and our international reputation.
Proposal
In August 2022 the Prime Minister and the Minister for the Environment and Water announced the Government’s intention to develop legislation to establish a Nature Repair Market (NRM). This voluntary market would establish and allow the trading of Biodiversity Certificates, for undertaking successful projects that provide biodiversity outcomes such as the regeneration of landscapes, and the protection and enhancement of remnant vegetation and habitats for native species.
The Bill (and associated consequential amendments) addresses three key objectives, including:
1. introducing a nationally consistent framework to describe and measure biodiversity outcomes;
2. enabling the purchase and transfer of biodiversity certificates, and a public register that describes biodiversity projects designed to deliver biodiversity benefits and certificates, so that the use of ownership, use and claimed benefits can be tracked and shared publicly; and
3. establishing project assurance and compliance systems to provide certainty to both buyers and sellers and which underpins market integrity.
The options that were considered through the formulation of this Impact Analysis included:
- Regulatory requirements through legislation
- Offsets
- A market-based approach
- Grant programs
- Conservation and restoration programs reliant upon public sector funding
Broad consultation was undertaken with impacted stakeholders, and the analysis demonstrated that a designed market-based approach could complement all of the considered options and provide greater space for flexibility, innovation, and the attraction of private sector capital.
Assessed Impact Analysis outcome
Adequate
Assessment comments
The Office of Impact Analysis’ (OIA) assessment is that the quality of the analysis in the Impact Analysis (IA) is adequate, but that it could have been improved by a clearer description of key elements of the proposal. The IA would have achieved a ‘good’ rating if the following elements had been included:
- More detailed assessment of the viable options against a clear decision-making framework;
- Improved characterisation of relevant international and state/territory examples of comparable policies, and evaluation results from relevant national programs; and
- Greater detail within the evaluation plan on the scope and process for evaluation activities, including monitoring approaches for the specified risks, targets for objectives/environmental outcomes and the approach to measuring and reporting.
OIA acknowledged the difficulty in the assessment of costs and benefits before the individual methodology determinations are established. As such, the Department of Climate Change, Energy, the Environment and Water is required to test each draft methodology against IA requirements with OIA, which may result in additional analysis.
Regulatory burden
The Department of Climate Change, Energy, the Environment and Water estimates a cumulative annual regulatory cost (if there are 500 live projects) of $1,700,000.