The agriculture minister, David Littleproud, has declared Australian business is “hungry” to pay farmers to protect biodiversity under a “world-first” scheme designed to reward environmental improvements alongside emissions reduction.
Last week’s federal budget included funding for a multi-stage agriculture biodiversity stewardship package that aims to make it attractive for farmers to both reduce greenhouse gas emissions and lift biodiversity protection on their land.
The goal in part is to create a climate and environment policy that appeals to farmers and will not be criticised by Coalition MPs otherwise opposed to steps to reduce emissions.
Speaking on the ABC’s RN Breakfast on Tuesday, Littleproud said Australia would be the first jurisdiction in the world to measure and reward improvement in biodiversity on farming land.
He said it would offer farmers who had been approved to generate carbon credits through projects to reduce emissions – such as restoring or not removing vegetation – an extra upfront premium payment for additional steps that also emphasised biodiversity protection.
It could require them to plant a mix of species consistent with the landscape, and manage and look after the vegetation.
One of the architects of the scheme, the Australian National University environmental policy specialist Prof Andrew Macintosh, said it was expected the carbon credits would be attractive to companies that wanted to buy them as offsets and also be able to say they were helping to look after the natural environment.
“I see the real attraction in the high-value voluntary carbon market, where a business needs the credits and wants a positive story to go with them,” Macintosh said.
The voluntary carbon market – basically, companies buying credits to meet self-imposed emissions reduction targets – has grown significantly over the past five years from about 25,000 credits sold in 2015 to more than 700,000. Macintosh said it was growing dramatically as more businesses set net zero emissions reduction goals.
The upfront premium paid by the government under the “carbon + biodiversity pilot” program is determined using a model that calculates the number of credits likely to be generated and sold over the life of a project, and that aims to provide an undisclosed rate of return to the farmer.
Littleproud discussed the development of the $34m pilot with Guardian Australia in March. He told the ABC on Tuesday “it’s an extra payment on top of the [emissions reduction fund] that would be able to be traded with the business sector, who are very hungry for this type of product”.
“Because we are the first ones in the world to be able to measure the improvement in biodiversity, that adds the social licence that companies are looking for and it rewards farmers for their stewardship,” he said.
Macintosh said the eventual goal was that it would create a stand alone market for biodiversity credits independent of the carbon component, reflecting that developments were often approved with biodiversity offset requirements.
Two reports last year – by the Australian National Audit Office and the former competition watchdog Graeme Samuel – found the current practice of using environmental offsets to allow development approvals was deeply flawed.
The budget included $4.4m to create a biodiversity trading platform – effectively, an online bulletin board where landowners could offer their biodiversity-enhanced carbon credits (and eventually straight biodiversity credits) for sale to interested businesses.
It also promised $5.4m for the creation of a voluntary Australian farm biodiversity certification scheme that would allow farmers to stamp their goods as environmentally friendly. Littleproud said the expectation was this would lead to products getting a premium “in places like the EU and UK, where they are wanting these types of programs”.
The government committed $22.3m for a pilot program to protect what is known as enhanced remnant vegetation – existing high value native plant life and ecosystems on their property.
Under this scheme, landowners would be offered a contract with rolling payments for steps including installing fencing, weeding, pest control and replanting. Macintosh said the goal was to bring national consistency to incentives that differed across the states.
Littleproud said the idea of a biodiversity market was in its infancy, and the government was having conversations with the Business Council of Australia “about what that’ll look like”.
The Australian Conservation Foundation said giving farmers incentives to plant native vegetation would encourage biodiversity and help store carbon in the landscape, but called on the government ensure there was not a “perverse incentive” for landowners to clear vegetation from their land before joining the program.
Basha Stasak, the foundation’s nature program manager, said Australia was a world leader in extinction and deforestation. “What’s most important is that any such program delivers genuine gains to biodiversity over the long term,” she said.
“This pilot should provide useful evidence about what actually delivers benefits for nature, so those measures can be adopted more widely.”
Farmers for Climate Action said establishing a platform to trade biodiversity and carbon credits from revegetation was a good step. Fiona Davis, the Farmers for Climate Action interim chief executive, said: “We are encouraged by minister Littleproud’s growing commitment to net zero emissions and believe the program has real potential.”