The Federal Government has announced the creation of the BCS which, according to Prime Minister Anthony Albanese, will be the start of a "nationwide restoration" of Australia's environment. The BCS will be designed to grant tradeable biodiversity certificates to landholders who restore or manage local habitat. The market will be open to all landholders, including first nations people and conservation groups.

Over the coming months, the Government will be consulting widely on the detailed rules for the scheme including how biodiversity benefits should be measured and verified.

Snapshot

  • The BCS would be designed to facilitate accessible business, organisational, and individual investment in landscape restoration and management. In doing so, the scheme is designed to respond to the 2021 State of the Environment Report which found that significant investment in conservation and restoration is needed to reverse environmental decline in Australia.
  • The BCS would be designed to operate in a similar manner to the existing carbon credits scheme (CCS). The markets for biodiversity and carbon credits will both be regulated by the Clean Energy Regulator (CER) and operate in parallel to each other.

Expected benefits of the BCS

Explaining the purpose of the BCS, Minister for Environment and Water, Tanya Plibersek stated that "[the Government wants] carbon planting projects to deliver broader benefits for the environment" beyond "just protect[ing] Australia's natural environment" such as by providing of habitat for native species through the management of existing, remnant vegetation.

Benefits of the BCS for landholders are intended to include topsoil protection, reduced erosion, shelter for livestock and improved drought resilience. Beyond this, the BCS would be designed to ensure that farmers are party to the benefits of increased company investment in carbon offsetting to mitigate adverse environmental impacts.

The BCS will provide these benefits by incentivising environmental protection and improvement through economic investment.

Creating biodiversity credits

Legislation will be introduced to regulate the trading of biodiversity credits and create the biodiversity market. The scheme would be designed to place a market value on biodiversity and create an investment pathway to incentivise investment in biodiversity projects. It appears that the scheme is intended to operate to allow market capture of biodiversity co-benefits derived from carbon projects.

Biodiversity credits would be able to be traded in a similar way to carbon credits, with credits to be awarded to conservation projects that prove measurable improvements to the environment. Eligible projects would include those that protect waterways, provide habitat, reduce erosion, protect topsoil and improve drought resilience.

Next steps

Government has announced that it will be consulting over coming months on the rules for the scheme, including how biodiversity benefits are to be measured and verified.

The program is expected to generate financial benefits particularly to farmers and provide an access to environmental offsets for projects where required.

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