Zoe Daniel (Goldstein, Independent) Share this | Hansard source

The government has committed to a Nature Positive Plan to incentivise conservation and protection of our precious ecosystems. The plan acknowledges the fact that Australia's environmental laws are not fit for purpose and the need for their reform. This is an intention that I support, especially given the stark findings of the State of the environment report, showing the list of threatened species is getting longer and longer. The Nature Positive Plan has several goals: goal 1, better environment and heritage outcomes; goal 2, more efficient and effective decision-making and priorities; and goal 3, accountability and trust. These are all principles that I agree with, and this is why it's so important to get this legislation right.

Concerns have been expressed, though, that the nature repair market will be used for offsetting. Instead of stopping destructive activities, biodiversity certificates may be purchased in an attempt to make up for the damage. This is the risk with allowing offsets: a zero-sum game where, rather than a nature-positive outcome, we have a nature net-zero neutral outcome at best. At its core, the focus of the market should be on reducing harm, not protecting the reputations of companies in the business of causing climate and environmental damage. Therefore, I am concerned that this legislation—the Nature Repair Market Bill 2023 and Nature Repair Market (Consequential Amendments) Bill 2023—does not rule out the use of biodiversity certificates for the purpose of offsetting.

There exists an additional challenge when it comes to offsetting for the environment. This challenge is that it's difficult to get like-for-like offsetting right. In other words, obtaining an offset from a project that is so similar that it can be said to virtually represent the biodiversity lost is a very tough thing to achieve. In practice, one would be hard pressed to find an example of a biodiversity market that has been successful in producing a net-positive outcome for biodiversity.

The nature repair market is modelled on the carbon market. Similarly, parallels can be drawn with flaws found in that market that may be repeated here. The Chubb review highlighted many issues with the carbon market, with recommendations to improve its integrity to play an actual role in climate action rather than allowing polluters to account their way to zero. By accepting the Chubb recommendations and agreeing to reform of the carbon market, this government has accepted the imperfections of the carbon market. It is absolutely essential, therefore, that flaws that we know to be flaws in that market, because the Chubb review has said so, are not repeated in the nature repair market. Why would we intentionally replicate a flawed system? Unfortunately, it's not possible to conclusively say that integrity in the carbon market is currently a given, especially because the Chubb recommendations have still to be implemented. Yet here we are launching headfirst into another similar market model.

The government is also in the process of implementing recommendations made in the Samuel review of the Environment Protection and Biodiversity Conservation Act. These commitments include introducing national environmental standards, including standards on environmental offsets and a federal environment protection authority, all needed measures. I look forward to working with the government to ensure our environmental laws do indeed produce the best outcomes for biodiversity. But new environmental legislation may come only late this year or early next year. This creates a situation where the nature repair market is likely to be operational before our environmental laws are fit for purpose. In fact, it risks undermining public trust in the nature repair market due to a lack of accountability to meet environmental best practice, which is yet to be defined. Accountability and trust are supposedly central to the government's Nature Positive Plan. This is putting the cart before the horse and driving it straight to the market.

I support the basis of the member for Wentworth's second reading amendment calling for the government to implement its promised reforms to the EPBC Act and to establish a federal environmental protection authority. I believe that a nature repair market must be accompanied by the best environmental laws, regulations and governance structures to ensure the best possible outcomes for the environment and biodiversity. The best way to ensure that the nature repair market is regulated with integrity is to have those powers sit with a body dedicated to ensuring biodiversity and conservation outcomes. This body would be the independent federal environment protection authority, the establishment of which was committed to by this government.

To that end, I move a second reading amendment to the member for Wentworth's amendment:

That the following words be inserted after "Agency":

"to perform the role of the regulator for the nature repair market".

This calls for the established environment protection authority to act as the regulator of the nature repair market. Currently the legislation prescribes the Clean Energy Regulator to be the regulator for the nature repair market. However, with pending reforms as recommended by the Chubb review and the fact that the Clean Energy Regulator's core business is carbon, a very different deal to biodiversity, I am concerned that it's not the best vehicle to perform this role.

I acknowledge the government's argument that as projects that may generate biodiversity certificates available to the nature repair market may also deliver carbon outcomes, with the possibility of generating carbon credits too, it may be onerous for landholders having to deal with two different regulators, particularly for small landholders and First Nations people. My understanding is that there will be other detailed amendments from the member for Warringah, requiring that the regulator support participation by First Nations people and small landholders. I support these amendments.

However, at the core of this legislation, this nature repair market should be an approach that ensures the best possible overall outcomes for biodiversity and conservation. When habitat loss and degradation impact nearly 70 per cent of threatened species, everything else is secondary. I am concerned that having the nature repair market regulated by a body which in itself has pending reforms will not yield the better environment outcomes goal of the Nature Positive Plan.

In addition to my second reading amendment, I intend to also move several detailed amendments that are intended to improve the regulation of the nature repair market. While the consequential amendments bill does attempt to equip the Clean Energy Regulator for the purpose of regulating the nature repair market, it introduces two new fields of expertise into the Clean Energy Regulator Act: agriculture and biological or ecological science. However, there is at present no requirement for the Clean Energy Regulator to have members who have such expertise. In other words, the nature repair market could be regulated by a body which doesn't have specific expertise in the areas most pertinent to it in designing methods and assessing projects. Therefore I will be moving amendments that require the Clean Energy Regulator to comprise membership including the fields of expertise introduced by the consequential amendments bill.

My second consideration in detail amendment has to do with the delegation of powers to the regulator. I would particularly like to point to the provision in the bill that allows the government's power to purchase biodiversity certificates to be delegated to the regulator. The same body in charge of ensuring integrity of these certificates is simultaneously tasked with finding the best deal on behalf of the government to buy such certificates. This is a conflict of interest if ever there was one, and a familiar conflict of interest at that. The Chubb review recommended that this power to purchase carbon credits should not be attached to the Clean Energy Regulator in the context of the carbon market. This is a recommendation the government has already accepted. Again, why legislate an existing flaw that we are already aware of?

The regulator is meant to regulate, to ensure that carbon credits have integrity and that the market operates with the best outcomes in terms of reducing emissions. If it is also tasked with finding the best deal on carbon credits on behalf of the government, the risk is that it undermines the integrity of the carbon market and the independence of the regulator. Acknowledging the Chubb review's recommendations, and to ensure that the nature repair market does not repeat the mistakes of the carbon market, this amendment removes the provision that allows the government to delegate the purchasing of biodiversity certificates to the independent regulator. Not closing this gap in the legislation may undermine trust in the regulator to effectively do its job.

Given the concerns I've expressed so far, my third amendment calls for a review into the regulator of the nature repair market before 2025. The review would assess the effectiveness of the Clean Energy Regulator as the regulator for the nature repair market. The review would consider how the market has met, or not met, relevant recommendations made by the Chubb review of the carbon market, and its interactions with new and improved environmental legislation. The amendment aims to achieve three goals for the nature repair market to be fit for purpose: first, that the market is continually improved alongside reforms in environmental legislation; second, that the issues with the carbon market are not repeated in the nature repair market, by implementing the reforms recommended in the Chubb review; and third, that the market is regulated effectively by the best independent authority to regulate it. The legislation already includes a review process. The review in this amendment will be an additional one-off review to ensure that the nature repair market operates consistently with environmental best practice of the day.

On the review in the legislation: my final consideration-in-detail amendment reduces the legislative reporting period from five years to three. A reporting period of three years strikes a reasonable balance between collecting reliable data and how time sensitive it is to address biodiversity loss, and the need to ensure the market is delivering the best outcomes. In addition to improving the regulation of the nature repair market there are also a number of opportunities to ensure that the market achieves the best possible environmental outcomes. For example, through technologies and artificial intelligence; collecting data on how the market is delivering for biodiversity; and doing so in a way that protects the privacy of landholders and First Nations' data sovereignty. At a broader level, there are questions about whether it is at all possible to accurately capture the value of biodiversity in the form of certificates.

I support the goals of the Nature Positive Plan, and I support the government's pursuit of getting us on track to protect and restore Australia's environment. I believe that these modest amendments will go some way to improve the shortcomings of the carbon market and the government's functions of the nature repair market.

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