Let's all be more positive towards nature. But how?

Have you heard about Nature Positive? It’s a global movement to stop all the damage we’re doing to the natural environment – to forests, rivers, plants and animals – and start reversing that damage. It’s an idea whose time has come. And it’s coming to Australia next week.

Tuesday week will see the world’s first global Nature Positive Summit in Sydney, hosted by federal Minister for the Environment and Water Tanya Plibersek and NSW Minister for the Environment Penny Sharpe.

The summit will be “the next step towards turbocharging private sector investment in nature repair”. It will bring together ministers, experts, environmental groups, businesses, First Nations people, community leaders and scientists.

It will “bring together global leaders to discuss next steps for a nature-positive future, so that our kids and grandkids will be able to enjoy the wild places we love today”, Plibersek says.

Sharpe says that “getting nature on the path to recovery is as important as tackling climate change. Nature positive, and investing in nature, are newish concepts, and they are key to turning around destruction and pollution of land, waterways and air, and stopping biodiversity loss”.

The summit’s sessions and site visits will cover driving sustainable ocean economies and “blue finance”, developing nature reporting frameworks, business leadership on sustainability, boosting First Nations leadership in nature repair, and showcasing nature repair in practice, across landscapes, seascapes and borders.

Well, that’s great. At this late stage, you’d have to be pretty boneheaded not to agree with all that. The question is, what should we do to stop the continued destruction and start repairing the damage we’ve already done?

Well, the answer’s obvious – obvious to economists anyway. Surely, what we should do is create the incentives necessary to discourage destructive behaviour and encourage helpful behaviour.

We need to set up something similar to the present “safeguard mechanism”, which requires businesses in industries with major carbon emissions to limit and then reduce their emissions.

Where this is impractical, they must “offset” any excess emissions with “carbon credits” purchased from farmers and others who do things that reduce an equivalent amount of carbon emissions. These “Australian carbon credit units” are certified by a government agency to ensure they’re genuine.

Get it? Rather than just ordering companies to stop emitting greenhouse gases, the government uses an “economic instrument” that offers incentives to businesses to do the right thing. The government creates a new market where businesses unable to reduce their emissions can pay other businesses to reduce emissions for them.

The emissions are reduced by those businesses that can do so cheaply, rather than the firms for which doing so would be much more costly. The market thus allows the community to reduce climate damage at the lowest available cost.

Neat idea, eh? One small problem. We have to be sure the businesses being paid to reduce their emissions really do so to the extent they claim. But these carbon-credit schemes are notorious around the world for being dodgy or downright fraudulent.

One problem is ensuring the carbon isn’t locked up (“sequestrated”) for a few years and then let go. Another is being sure people aren’t getting paid to do something they fully intended to do anyway for other reasons.

Officialdom insists that our federal carbon-credit system is kosher. But various whistleblowers beg to differ – and that’s not hard to believe.

With nature first, the schemes you use to reduce carbon emissions can be adapted to preserving and repairing bushland and plant and animal habitat. With bushland, there’s a fair bit of overlap between the two problems.

The NSW government has been running a biodiversity offsets scheme since 2017. But in its own politely ponderous way, a performance audit by the NSW Auditor-General in 2022 tore it limb from limb.

It found that the government department responsible for the scheme had “not effectively designed core elements” of it. There were “key concerns around the scheme’s integrity, transparency and sustainability” creating “a risk that biodiversity gains made through the scheme will not be sufficient to offset losses resulting from the impacts of [economic] development, and that the department will not be able to assess the scheme’s overall effectiveness”.

The point is, by now we’ve had enough experience of attempts by governments to create “markets” out of thin air, just by passing laws and setting up regulatory bodies, to know this doesn’t leave us with markets that work the way real markets work – let alone the markets that exist in economics textbooks.

When it comes to the environment, the trouble with government-created “markets” is that governments are creating the demand for something – a carbon credit, or a biodiversity credit – and also determining the supply of that something, by deciding who’s done something that entitles them to sell a credit.

So the buyer has been ordered to buy things called credits, while the seller has been allowed to sell things called credits. See what real markets have that this market doesn’t? Customers.

A customer is someone who wants value for their money and, if they aren’t getting it, will either go somewhere else or decide to go without.

But in this so-called market without customers, buyers have to buy credits just to please the government, while sellers who’ve been granted a piece of paper called a credit have a guaranteed buyer.

So sellers can sell anything they’ve persuaded the government to class as a credit, while the buyers forced by the government to acquire officially designated credits, have no reason to care whether the credits they buy are good, bad or indifferent.

It’s hard to imagine a “market” where the risk of buying something that’s no good could be higher.

Now get this. As originally intended, the purpose of the Albanese government’s Nature Repair Act, passed late last year, was to establish a nature-repair market. But the Greens would pass the bill in the Senate only if it didn’t permit miners and other developers to harm nature. And if they did, the polluters would have to offset any damage by buying biodiversity credits.

So, in the end, the Act created only half a market. It gives the government power only to award farmers and others who do nature-enhancing things with “biodiversity certificates”, which they can sell.

Who’d want to buy such certificates? Only philanthropists, environmental groups, companies trying to enhance their environmental credentials, or governments coughing up taxpayers’ money.

You get the feeling the Greens don’t have much faith in creating artificial markets to fix the environment. They don’t seem to share most economists’ conviction that governments shouldn’t order people about – particularly businesspeople.

So how else can we pursue nature positive? Well, here’s a radical thought: governments could stop logging native forests, stop further land clearing, stop subsidising fossil fuels, stop permitting new mines and gas fields, and start spending a lot of money restoring land and habitat.

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Labor is just pretending to be tough on climate change

Labor talks the talk, but doesn’t walk the walk. Last week’s “final warning” from the Intergovernmental Panel on Climate Change – and the Albanese government’s refusal to be moved by it – should be a game-changer in our assessment of Labor’s willingness to do what must be done.

The IPCC’s message – driven home by UN Secretary-General Antonio Guterres – was that we’re almost out of time to avoid much of the worst climate change. Whatever plans we had to reduce greenhouse gas emissions, we must step them up, and speed them up.

Regarding last year’s federal election, the message is that Labor’s plan is complacent and compromised, and the Greens and teals were right to demand much tougher, faster action.

But not only did Climate Change Minister Chris Bowen show no sign of getting the UN’s message, he announced his refusal to negotiate with the Greens to make improvements to his “safeguard mechanism” legislation.

You need to know that Albanese Labor hates the Greens more than it hates the Liberals. Bowen could have decided to use the need to win the Greens’ support for his bill in the Senate as cover for making the bill stronger than Labor promised in the election campaign.

Instead, he decided to put the interests of our grandchildren second to this fabulous chance to “wedge” the Greens. They could either vote for Labor’s bill as is, or they could join the Coalition in voting it down – just as they did when they voted down Kevin Rudd’s carbon pollution reduction scheme in 2009.

This would leave the government with no means of achieving its target of reducing emissions by 43 per cent by 2030. And, Bowen bellowed in the House, that would be all the Greens’ fault. (It doesn’t seem to have occurred to Bowen and his boss that if they go to the 2025 election having done nothing to fight climate change, blaming it all on the Greens won’t be a good enough excuse.)

But last week showed that the problem with Labor isn’t just its political cynicism and game-playing. Until last week, it was possible to see the Greens’ demand that no new coal and gas projects be approved as the kind of over the top zealotry you’d expect from those crazies. And, as it happens, the teals.

This is what Guterres said last week in welcoming the IPCC’s final warning. “The climate time-bomb is ticking.” We do have time to defuse it, “but it will take a quantum leap in climate action”.

We must “massively fast-track climate efforts by every country and every sector and on every timeframe”.

He was proposing an “acceleration agenda” with, specifically, “no new coal and the phasing out of [existing] coal by 2030 in [the rich] countries and 2040 in all other countries. Ending all international public and private funding of coal” and “ceasing all licensing or funding of new oil and gas”, as already proposed by the International Energy Agency and “stopping any expansion of existing oil and gas reserves. Shifting subsidies from fossil fuels to a just energy transition”.

That’s not some crazy greenie, that’s the UN secretary-general.

Yet, the very same week, Bowen had the temerity to claim that stopping new projects would be “irresponsible”. That’s now the opposite of the truth.

It’s not by chance that Bowen is the Minister for Climate Change and Energy. It’s not just the Coalition that’s in bed with the fossil fuel industry; Labor is too. Labor just does a better job of covering it up.

Federal Labor will not commit to stopping the proposed 116 new coal and gas projects. When Albanese went to India recently, he took fossil fuel people with him, so they could sell more coal.

The many state Labor governments are committed to approving new projects. That’s another thing that happened last week: on election night in NSW, the new state Labor minister made it clear the Minns government would not be stopping new projects.

Labor wants to be in bed both with those who want real action on climate change and the fossil fuel industries. Someone famous once said, “No one can serve two masters”. One of his saintly followers once prayed, “Lord, make me pure – but not yet”. That’s Labor.

Which brings us to the safeguard mechanism Labor is refusing to improve. Bowen has conned some conservation groups into supporting his plan because, though it’s not perfect, “something is better than nothing” and “it’s a start: get it passed, and seek to improve it later”.

Come in, sucker. What last week shows is that there isn’t time to improve it later. Labor has tried to wedge the Coalition by building its reduction scheme on the base of Tony Abbott’s safeguard mechanism, which was largely for show and did nothing to reduce emissions.

But if Labor is taking over an ineffective scheme from the secret climate change deniers, now’s the time to make it effective, not later. The fact is, the safeguard mechanism is riddled with loopholes.

The first loophole is our fossil fuel exports. Under the UN’s rules, a country is responsible for the emissions that occur on its own territory. Bowen’s renovations would, in theory, reduce the local emissions of our biggest polluting industries. It would also reduce the local emissions from any big new coal and gas export projects.

But it would permit other countries to maintain or increase their emissions from fossil fuels they bought from us. The UN will blame them for those emissions, not us. Great loophole, eh?

Trouble is, greenhouse gas is a global problem, not a local one. And we’re one of the biggest exporters of fossil fuels in the world. We export far more future emissions than we emit ourselves. So, what we do at home doesn’t add to climate change nearly as much as what others do with the coal and gas we sell them.

Bowen’s version of Abbott’s safeguard mechanism has a second major loophole. The big polluters must either progressively reduce their emissions according to the government’s phase-down, or buy the equivalent carbon credit offsets from someone else – often a farmer who’s planted more trees.

First problem is that there’ll be no limit to the extent that a polluter can resort to carbon credits. So it’s possible they’ll continue pumping out greenhouse gases, and mainly just buy credits from elsewhere.

This could lead to far more reliance on credits than the UN agreements envisaged. Credits were supposed to be used mainly by industries, such as cement and steelmaking, that find reducing emissions exceptionally difficult.

The other problem is that a lot of the carbon credit offsets are dodgy – they’re not like for like as a substitute for genuine emission reductions.

These were the main loopholes in Bowen’s rejigged safeguards mechanism that the Greens, the teals and Senator David Pocock were hoping to see improved by negotiations with Labor.

They make it debatable whether, in this case, something is better than nothing. One advantage of voting down Bowen’s bill would be to stop Labor pretending it had done something meaningful about climate change while actually prolonging the future of our fossil fuel industries.

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