Sustainability Bites

There is no such thing as a free lunch

‘Nature Positive’ sausage anyone?

by | Dec 15, 2023 | 2 comments

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Next year, the Australian Parliament will consider what may well be the most significant environmental reforms in our history with the Government promising legislation to implement its Nature Positive Plan, replacing the Environment Protection and Biodiversity Conservation (EPBC) Act 1999. The recent Senate debate on the Nature Repair Market Bill has much to tell us about the potential fate of these reforms, so it’s worth taking an in-depth look at the legislative history.

It was Bismarck who likened laws to sausages: better not to see either being made.

Having just read the Hansard (transcript) of the Senate debate endorsing the recent deal between the Australian Government and the Greens to pass the Nature Repair Market Bill, I think we can now go further: is that the kind of sausage we really want?

A respectable idea

The idea of paying farmers and others to restore nature has been around for a while — academics call it ‘payment for ecosystem services’.

And it’s a respectable idea. We, collectively, have put Nature into decline, so it’s reasonable that we, collectively, pay for its restoration, and not rely solely on regulation, the burden of which can sometimes falls unequally, on farmers for example.

Of course, governments can pay for restoration directly, but there’s evidence that people beyond government — philanthropists, businesses looking to burnish their social licence and developers needing to discharge regulatory obligations to offset their environmental impacts — are prepared to ‘buy’ some restoration, if only it were packaged in convenient legal units, like shares in a company.

Enter David Littleproud, Agriculture minister in the previous government.

Littleproud is a proponent of creating markets in agricultural biodiversity, based on the idea of giving farmers a tradeable certificate for undertaking projects, such as tree planting, that enhance or protect biodiversity in native species. He introduced a bill in the Australian Parliament to implement the idea, the Agriculture Biodiversity Stewardship Market Bill 2022.

Takeover, makeover, backflip

Littleproud’s bill lapsed when the Albanese Labor government came to power in 2022, but the new government liked the idea and reintroduced it, with a few changes, including a new name, the Nature Repair Market Bill 2023.

It appears there were two drivers for this, both political.

First, incoming environment minister Tanya Plibersek could see just how bad the environmental decline was, but also realised that her chances of getting the government to tip a lot more money into her environment restoration bucket were, well, zip. She latched onto the growing international ‘green finance’ movement, under which investors are looking increasingly to invest in projects that can be justified as environmentally responsible, and even directly beneficial to the environment.

Plibersek has hitched her political fortunes to this movement, signing up to host the world’s first ‘Global Nature Positive Summit’ in Sydney in October 2024. The summit will ‘to consider how to supercharge investment in projects that repair nature’.

Second, Plibersek needed a domestic initiative to cement her credibility as leader of this ‘Green Wall St’ approach.

By happy coincidence, Littleproud, now leader of the National Party, but in Opposition, was keen to let the government pick up his bill and run with it. ‘I don’t care what they call it’ he told Guardian Australia journalist Paul Karp; the important thing was that they were picking up his initiative and running with it.

But things went wrong for Littleproud. There was a party room revolt of some kind among the Nationals, and the Nature Repair bill was a casualty.

So Littleproud backflipped, telling Parliament that he now opposed the Bill. ‘Even the name of the bill—the Nature Repair bill—says that our farmers and our stewards of the land in forestry and fisheries have damaged it’, he said.

This left Plibersek up the political creek because the Greens, ever skeptical of ‘market solutions’ to environmental problems, were opposed.

Stuck in the Senate

Meanwhile, the Bill had been referred to a Senate Committee, where it was almost uniformly panned by stakeholders and experts alike, not for the underlying idea, but for the execution, which was labelled variously as rushed or half-baked.

Or as ‘putting the cart before the horse’: most significantly, people had expressed concern about how a nature repair market would interact with environmental offset rules under the government’s Nature Positive Plan reforms.

The problem was that the general principles in this plan had not yet been translated into the specifics of a proposed law.

Sceptics, of whom there were many, were concerned that the regulatory reforms were shaping up to allow developers to ‘cash out’ their biodiversity offset obligations, by paying into a government fund, which the government would in turn use to underwrite the Nature Repair market, through the purchase of biodiversity credits.

Worse, with the Nature Repair bill undercooked, these credits might be dodgy, as their carbon credit cousins are strongly accused of being.

Under a worst-case scenario, developers would buy their way out from under environmental protections while the government could appear to be saving the environment by using these payments to buy dodgy credits. This would be greenwashing writ large.

In the face of this opposition, Plibersek bought time, agreeing (twice) to give the Senate Committee longer to consider the Bill.

Presumably the hope was that once the Nature Positive Plan reforms were before the Parliament, the government could negotiate proper linkages between the two schemes and pass them together as a giant reform package. Given enough time, the Senate’s ‘house of review’ role might save the day. It could even be sold as a win for good government.

Unexpected developments

But it was not to be. The government did secret deal with the Greens, then sprang it on the Senate in the last sitting week of this year.

Suddenly, the Senate Committee report, which was not due for over four months, was tabled on Monday 4 December, with the Bill listed for debate the next day.

The majority Senate Committee report was brief, ‘flimsy’ if you agree with the Opposition (which I do on this occasion). It brushed aside the myriad of issues raised, making a single recommendation to pass the Bill on the ground of ‘balancing’ concerns raised by stakeholders with ‘broader legislative considerations … taking place through the environmental reform processes currently underway …’

This is gibberish. As the Coalition dissenting report put it:

1.11 The Coalition is also especially concerned by the sentiments expressed in … the Majority Report.

1.12 In paragraph 2.33, it is asserted that the Government should be left alone to ameliorate the many and major concerns with their Nature Repair Market Bills as part of their already shambolic and badly-delayed process to overhaul the EPBC Act.

1.13 Even more worryingly, it is argued in paragraph 2.34 that there will—sometime in the future—be ‘a lengthy period of design of the methodologies underpinning the nature repair market’. Given this Government’s track record of eschewing genuine consultation, being so poor on detail, and inability to go anywhere near getting even the basic architecture of these Bills correct, we have absolutely no confidence in their ‘trust us, we’ll get it right later’ approach.

1.14 In reality, there are so many problems, and there is such widespread discontent, with the Government’s approach to the development and potential implementation of these Bills that it is impossible to know where to begin in an assessment of them.

1.15 That is especially true in the Coalition’s case at this point in this inquiry process—when we have been given such a ludicrously short time to be able to say almost anything, let alone to provide a comprehensive set of comments on all of the many issues involved.

1.16In all of our collective years in the Senate—and, indeed, in all of our years in other organisations and workplaces—it is difficult to recall many cases of such a blatant lack of due process.

(As an aside, this last sentence is interesting in saying that it is difficult to recall ‘many’ rather than ‘any’ cases of such abuse. That has to be because there are so many such cases, perpetrated by both major parties! On this occasion it was the Coalition calling ‘foul’, but the boot could just have easily been on the other foot.)

The abuse of process continued. The Government/Green amendments (to implement the deal) were not circulated until the debate itself, leaving Senators and advisers preparing for an important debate in the dark.

Worse, Senators complained that they could not get their amendments drafted, as there simply wasn’t enough time. Hardly ‘house of review’ stuff.

It turned out that the deal involved two elements. First, addressing the Greens’ major concern, the government would amend the bill so that biodiversity credits could not be used as offsets.

As well, in response to the Greens’ concerns that schemes like this cannot replace direct government spending, the government made a supporting commitment to publish investment strategies on a regular basis to guide the scheme.

The second arm of the deal was an amendment to the EPBC Act (ie, an amendment unrelated to the bill before Parliament) to widen the EPBC ‘water trigger’ to include ‘unconventional gas’ projects.

As Greens Senator Sarah Hanson-Young later explained in Parliament, this would:

… close the loophole which currently gives gas fracking corporations a licence to drill without there being any federal environmental water assessment. Currently, the Minister for the Environment and Water is required to assess only proposed coal seam gas projects for their water impact. Hydraulic fracturing projects remain exempt from this requirement despite their significant impact on water. Clearly, this is wrong and out-of-date and needs fixing. Today, after months of campaigning and negotiating, the Greens will ensure this is fixed. This water trigger will cover all phases of unconventional gas development, including exploration, appraisal and production. It will provide critical protection for Australia’s rivers, aquifers and wetlands and the communities that rely on them. It will ensure that climate bombs like the Beetaloo basin must be assessed; that they can’t just go ahead without any national oversight. It will throw a lifeline to water resources like the mighty Roper River in the Northern Territory.

The government had already committed to making this change in its Nature Positive Plan, so the deal simply brought the change forward. Clearly the Greens were worried that gas projects in the Beetaloo basin, currently under exploration, would secure approval from the Northern Territory government alone.

My guess is that the Greens wanted to see an earlier federal involvement in unconventional gas, and in the Beetaloo in particular, not so much to increase the protection for water resources, as to strengthen their campaign for the next election. Their ‘climate bomb’ argument will have an extra political piquancy if Beetaloo projects are actually before Tanya Plibersek, or at least headed her way, when the election is called.

What can we learn from the Senate debate?

In the end, the bill was enacted as the Nature Repair Act 2023 — for good measure, the Greens persuaded the government to drop the word ‘market’.

Apart from cries about abuse of process, the substantive debate on the Nature Repair Market bill contains some handy insights on policy for next year’s much bigger debate on the Nature Positive Plan reforms, bearing in mind that the government needs either Coalition support, or support from the Greens plus two other cross-benchers, to get its reforms passed.

At this stage, Coalition support looks unlikely; it’s hard to see them supporting any proposal involving stronger environmental protections.

If the Nature Repair Bill is any guide, the Greens will shoot for big political wins rather than policy detail. The inclusion of a ‘climate trigger’, currently absent from the EPBC Act, looks to be their holy grail.

A climate trigger would see the environment minister regulating greenhouse gas emissions from new developments, or even blocking those developments, on grounds that emissions would be excessive. (Under the current Safeguard Mechanism, large new emitters may have to buy carbon offsets for high emissions, but they don’t need a regulatory approval to set up in the first place.)

It’s hard to see the government giving ground on this issue, steadfastly committed as it is to the Safeguard Mechanism. All of this looks like a Clash of the Titans, with no obvious way forward.

Just in case the government did do another deal with the Greens, what about the agendas of other cross-bench Senators, given that the government needs the votes of at least two of them to get any new laws passed?

Unsurprisingly, Senator Lidia Thorpe took a very strong stand on respecting the knowledge and rights of First Peoples.

This will be a major issue for the Nature Positive bills, not only because the government has promised to do much better, but also because they now have to deal with a recommendation from another committee, chaired by Senator Patrick Dodson, that new legislation should be consistent with the UN Declaration on the Rights of Indigenous Peoples (UNDRIP).

UNDRIP is built around the principle of ‘free, prior and informed consent’, which Senator Thorpe and others will argue means that projects affecting Indigenous land or cultural values should not receive an environmental approval without the agreement of Traditional Owners. This would go beyond the right to be consulted, currently found in the Native Title Act, and is a big deal.

Another key player is Senator David Pocock. Senator Pocock expressed scepticism about offsets and concern about the integrity of biodiversity units. Ultimately, he voted against the Bill although he supported aspects of the deal.

He also stressed the need for government investment to put its own cash on the table, summing up his position thus:

I can see what the government is trying to do with this bill but, again, as such a wealthy country, we’ve got to start to fund biodiversity and threatened species, rather than not giving them funding but pointing to a market mechanism where there may be some demand but where, from all the consultation I’ve done, it’s very unclear just how much demand there will be. On top of that, we don’t have a firm commitment that the government will kickstart demand with funding for that, as they did with the carbon market.

Senator Pocock also sought to add ‘open standing’ provisions that would facilitate legal challenges by third parties, but was unable to get the amendments drafted.

In the end, the Senate agreed to Senator Pockock’s motion to support the bill, with the qualifier that:

the Senate notes that to achieve the aims of the bill in enhancing and protecting biodiversity, the Government must:

(a) create an investment strategy for biodiversity conservation programs,

(b) implement the recommendations of the Taskforce on Nature-related Financial Disclosures; and

(c) undertake a review of the governance of the nature repair market and whether responsibility for the market should be transferred to the Environmental Protection Agency once that agency has been established”.

While this motion does not bind the government legally, their support for it creates a political commitment.

Senator Pocock comes out of this looking pretty shiny. His grasp of environmental policy, and his attention to detail, is impressive. It seems clear that he won’t horse-trade and he’s unlikely to have the wool pulled over his eyes. The price of his support for the Nature Positive reforms is likely to involve a significant strengthening of environmental protections.

Three sleeper figures in this debate are Tasmanian duo Senators Jackie Lambie and Tammy Tyrell, and former Liberal, now Independent, Senator David Van. While the Tasmanian duo did not speak in this debate, both voted for the deal. As these Senators are not strongly pro-environmental, I smell a side deal, something for Tasmania that will come later and may have nothing to do with the environment.

Senator Van did not speak and did not vote, so he remains a dark horse, but he did do a deal with the government that secured his vote for its recent Murray-Darling water reforms, so he is a potential player next year.

A Bigger picture

All of this leaves me a little cold. First the National Party backflipped on its support for the bill, then the Greens did a backflip on their opposition to it, all in pursuit of politics over policy. Then we come to other cross-bench Senators, whose position is variable at best and unpredictable at worst.

This time next year, the Senate will probably be debating the Nature Positive Plan legislation itself. This is a much bigger fish to fry, as it will replace EPBC) Act. Moreover, the pressure to do deals won’t just come from the calling of time on the Parliamentary year, but in all likelihood from the end of the Parliamentary term, as an election will be looming.

We have to do better and can’t afford to leave what could be our most important environmental reform ever to the vicissitudes of last minute, pre-election, political deals.

I can only hope the government gets the reform bills into the Parliament early next year. The more time there is for a considered debate, the better the prospects for detailed and sensible recommendations from a committee process and for some time to negotiate.

In the meantime, interested stakeholders can help as well. The more they talk to each other rather than at each other, the better the prospects for collective stakeholder influence in favour of good policy.

If we want our legislative sausages to be palatable, it’s time we took a stronger hand in making them.

Banner image: Australia’s ‘Nature Positive’ sausage may not be so appetising if you knew how it was made. (Image by László Szalai (Beyond silence), Public domain, via Wikimedia Commons)

2 Comments

  1. Jonathan Miller

    Peter

    Thanks. An interesting and helpful analysis. To the extent that the Greens did get improvements, I am not sure we can necessarily say that they were just seeking political ammunition.

    In relation to nature markets, most of the various objections raised a year ago by the Australia Institute still stand.

    Unfortunately, I don’t think that legislation (and certainly not market mechanisms) will ever be adequate to protect nature in the long-term. Instead, we need radical cultural change to better recognise the fundamental importance of the natural environment to human welfare, and to value non-human nature irrespective of human benefit, as well as change to the incumbent forces that drive environmental destruction.

    Reply
  2. Ed Wensing

    Thanks peter, a helpful piece of analysis.

    Reply

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