I recently participated in a ‘lock-up’ held by the federal environment department in which selected stakeholders were allowed to read an overview of some of the reforms the government is developing to implement its Nature Positive Plan, released in December 2022.*
The plan will be implemented mainly by replacing the Environment Protection and Biodiversity Conservation (EPBC) Act 1999 with several new laws. Environment minister Tanya Plibersek had promised to have the draft laws published by now, but things are running significantly behind.
Responding to complaints about this, the minister asked her department to hold a series of ‘lock-ups’ in which stakeholders could see documents that were in effect ‘work in progress’.
Many participants found it odd that, while we could not take copies of the documents, we were free, not only to copy them out, but to talk freely about the content afterwards.
Unsurprisingly, some of us spent our time copying the documents out. Although I would not go as far as this, one observer later told the Australian Financial Review that ‘the lack of process and transparency is a disgrace’.
With a lot of text duly copied out, I went back over my notes and began to reflect on what I had seen. Odd processes aside, what struck me most was not any particular element of the reforms, but the possible implications of the reform package overall.
Fully implemented, the ‘Nature Positive’ model on which the reforms are built could completely reframe decisions to approve (or not) development projects following environmental impact assessment (EIA).
While the government almost certainly won’t ‘go the full Nature Positive’, it is worth reflecting on what it would mean to do so.
Present framing: are impacts ‘acceptable’?
At present, environmental approvals, not just under the EPBC Act, but also under similar state laws around the country, are built on a model of applying Ecologically Sustainable Development, (ESD).
Boiled down, the laws ask regulators to assess the environmental impacts of a project, and to ‘balance’ the resulting environmental impacts against economic and social gains, typically presented as jobs for locals and revenue for government.
Under the EPBC Act, this striking of this balance is presented as a decision about whether the environmental impacts are ‘acceptable’.
A recent decision of the full Federal Court, Friends of Gelorup Corridor v Minister for the Environment (August 2023) summed up this decision-making process well:
… the prominence of impacts on matters of national environmental significance … in the statutory scheme more generally means, in our view, that a necessary step in the decision-making process is an assessment of whether those impacts are acceptable in the light of the benefits that the proposed action may bring. If the decision-maker considers that the impacts are not acceptable, the next question for the decision-maker must be whether conditions can be devised that will result in the impacts being acceptable (by limiting or reducing those impacts or, possibly, by bringing about a benefit that offsets them) and what those conditions are.
The problem has always been that ‘acceptable’ has always been a subjective and somewhat ‘hit and miss’ concept, especially given that the full range of supporting plans, policies and environmental information systems, envisaged when the EPBC Act was passed nearly 25 years ago, has never been put in place.
Typically, regulators decide that various impacts are acceptable, leaving the environment as the loser. Acceptable or not in isolation, collectively, the impact of all of these decisions about ‘acceptable’ impacts has proven to be, well, unacceptable.
In more recent times, governments have tried to counter this by requiring environmental offsets as compensation for such losses, but most offsets fall far short of their intended results.
New framing: ‘Nature Positive’
I discussed the idea of ‘Nature Positive’ in a recent blog, but the gist is that Nature should be retained or restored in net terms. The word ‘net’ means that offsets are still in the mix, but if offsets are done properly, the bottom line should be that Nature starts to recover.
That’s why Prime Minister Albanese joined many other world leaders in signing the Leaders’ Pledge for Nature, which commits signatories to reversing biodiversity loss by 2030.
If the reforms do reframe decision-making, so that decisions are truly Nature Positive and no longer contribute to ongoing environmental decline, this will either limit development to situations in which Nature is ‘retained’ (ie, physically), or place the cost of restoration on one of two parties: the developer or government.
Outcomes in which Nature is ‘retained’ without the need for offsetting restoration are already rare and increasingly so, as development expands and Nature contracts.
Which means that it all comes down to ‘who pays’?
To be pure, or purely pragmatic?
If it’s about who pays, there are two main options, the economically pure and the politically pragmatic.
In economic theory, damage to the environment caused by a developer is a ‘negative externality’. That is, the damage is external to the interests causing it. In other words, the damage is someone else’s problem.
The ideal economic response is to ‘internalise the externalities’, which in this context means to make the developer own the problem, most likely by making them pay for the necessary restoration.
However, developers will likely respond that saddling them with restoration costs, beyond the immediate site of their activities, would make development uneconomic.
If the development is a mine, the mine would go to Africa or South America instead. If the development is a housing estate, house prices, already high, would go ever higher. Or, worse, the houses wouldn’t be built and people will be priced out of the market.
And so on; you get the argument.
It is almost inevitable that the government’s response (indeed, the response of any government) will be (and probably has been) purely pragmatic. In such situations, governments will cave, and ask developers to make a ‘contribution’ to restoration costs, one that is ‘affordable’.
At this point the issue lands back on the Cabinet table, with the environment minister pitted against the Minister for Finance, the Treasurer and pretty much everyone else.
How would such a debate pan out?
Would the government fund the shortfall in restoration costs?
Would they crab-walk away from their commitments to reverse the loss?
Or would they weaken the model at the outset, watering down key requirements, for example that offsets be ‘like for like’, to make restoration requirements easier and cheaper to meet?
See you in the Senate
You can probably guess which option they’ve picked.
For environmental interests, the battle in the Senate next year will be about locking the government into its policy goals legislatively, and reversing the watering down.
If you’ll forgive me for mixing my metaphors, the task is to plug the holes in the Nature-Positive-Plan bucket.
See you in the Senate.
* I attended the lock-up as a representative of the Biodiversity Council.