The Federal Government has passed reforms to federal environment laws with amendments from the Greens. The amendments have improvements in relation to native forest logging, illegal landclearing and fossil fuel projects, but there are still plenty of problems.
Fri 28 Nov 2025 14.00
Photo: AAP Image/David Wigley
Just like Australia’s climate policy relies on carbon offsets that are “largely a sham”, the federal environment laws are doubling down on “biodiversity offsets”. The theory is that if you want to destroy a nice bit of nature in one place, you can offset that by recreating the same kind of nature somewhere else.
Just like the market for carbon offsets, biodiversity offset markets just don’t work. NSW has a similar scheme that has been criticised by the NSW Auditor General, the NSW Independent Pricing and Regulatory Tribunal and an independent review.
It’s worth remembering that in the last Parliament, then-Environment Minister Tanya Plibersek ruled out a similar proposal, which she had enthusiastically dubbed “Green Wall Street”.
What if a miner or property developer can’t find a nice place to offset the nice nature they want to destroy?
No problem, under the new laws they can just pay some money into a fund. That fund will be overseen by the “Restoration Contributions Holder”. They will use the money to try to restore some nature instead of the developer.
This is bad for a few reasons. First and most obviously, working out how much money a bit of destruction is worth is very subjective, and the experience in NSW has not been good.
Second, this transfers the responsibility for restoring environmental damage from the private proponent to a public agency and ultimately to the public taxpayer.
Also, a pay-to-destroy system is a significant departure from the principle underpinning biodiversity offsetting: that if you cause harm in one place, then you must ensure ecologically equivalent benefit is secured in another place. The Restoration Contributions Holder has significant discretion in deciding how it uses the money it receives. It might, for example, decide to spend money received for destroying platypus habitat on improving something else, perhaps possum habitat.
In recent evidence to a Senate Committee, Richard Denniss talked about the ‘platypus to possum exchange rate.’
Such a ridiculous thing could occur if offsets can’t be found for some environmental destruction allowed under the new laws.
Instead of offsets, the Restoration Contributions Holder could pay for some environmental action aimed at getting a ‘net gain’ to the environment. Who knows if Australia will ever see a proposal to destroy platypus habitat in exchange for possum protection, but it is certain that we will see some kind of environmental improvement funded with money raised from allowing a different kind of environmental destruction.
If you were a platypus whose habitat is being destroyed, obviously you would want the new habitat well-established before your old home is destroyed.
Ecologists have long insisted that any biodiversity market has to be about building up environmental savings rather than loaning out the right to destroy.
Unfortunately, the current laws would see the Restoration Contribution Holder receive money for destruction but not need to secure protection for some time. The legislation states that time-frames may be set the relevant restoration action in the regulations, but it appears this is not mandatory.
Again, NSW shows how this ends up. In NSW, developers have been paying money much faster than the payment holder can find offsets, leading to long time lags. Amendments were made in 2024 to have a three-year limit on lag times in NSW, but no such time limit applies at the federal level. This runs the risk of worsening impacts on nature while offsets are identified and secured – if they are secured at all.
Researchers, Frances Medlock and Fergus Green’s explore this further in their Australia Institute report, Payments to destroy and lessons not learned.
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