How many extra possums does it take to compensate for a dead platypus?

How many extra possums does it take to compensate for a dead platypus? That’s the kind of calculation a bureaucrat would literally have to make under Environment Minister Murray Watt’s new ‘environmental laws’.

Of course, we won’t just need to know the platypus-possum exchange rate, we will need public servants at the Commonwealth Environment Department to develop and regularly update, the Swift Parrot to Western Swamp Tortoise ratio. And of course, they will need to be able to answer that age old question of how many Murray Cod we can kill to save a Koala.

While it’s not considered polite to talk about when it’s OK to destroy the habitat of endangered species in these terms, Labor’s proposed amendments to Australia’s ‘environmental protection laws’ demand answers to precisely such absurd questions.

Given the abject failures of Australian Governments to design private markets for aged care, childcare, emergency phone calls, and the market for water in the Murray river, why would the Parliament let alone the country have any confidence the same approach will work to protect endangered species?

I’m an economist. So, to be clear, I do think markets work pretty well for some things. Economists have some simple tools for predicting when markets will fail but sadly in Australia our parliaments and public servants have long history of designing bad markets and then getting surprised by the bad outcomes.

Many of the same people who built those disasters are now working on the ‘magical market’ that will be the saviour of Australia’s remaining biodiversity. What could possibly go wrong.

It turns out, a lot. Luckily we don’t even need to look to economic theory or analogous examples to anticipate how dangerous this idea is because in their wisdom, the NSW Government has already tried turning biodiversity into an economic market, and it has failed dismally.

Back in 2016 the then NSW Liberal Government implemented just such a scheme and according to the review conducted by the NSW Auditor General in 2022 it was an abject failure, finding that:

“A market-based approach to biodiversity offsetting is central to the (NSW) Scheme’s operation but credit supply is lacking and poorly matched to growing demand. Department of Planning and Environment (DPE) has not established a clear, resourced plan to manage the shortage in credit supply…

“These factors create a risk that biodiversity gains made through the Scheme will not be sufficient to offset losses resulting from development…”

The thing is: when markets fail to guarantee the safety of children in childcare, their parents speak up. When markets fail to care for our elderly citizens, their adult children speak up. But when the future ‘biodiversity market’ fails to protect a species, people like property developers and the gas industry will be quite literally banking on the fact that an extinct species won’t be able to speak up.

And last, but not least, there is the question of morality.

Do Australians really think it is okay for developers to take a chainsaw to koala habitat as long as they pay the appropriate fee to the Commonwealth’s ‘Restoration Contribution Holder’?

If we are willing to offset the homes of the swift parrot for an arbitrary number of Wollemi pines, then what else are we willing to ‘offset’?

Will we start letting businesses pay to break occupational health and safety laws, or child labour laws, whenever companies think the profits after paying the ‘damage duty’ justify the harm they were willing to pay for?

Regulations are the guardrails of our society, and they’re about setting limits, not prices. Speed limits, noise limits and alcohol limits all play a big role in helping 27 million people live alongside each other.

Few Australians think it would be okay for rich people to drink drive if they were willing to pay the fine. And even fewer think it would be OK for a mine to knowingly put its workers lives at risk as long as they are willing to pay for ‘workplace safety offsets’.

So why does the Albanese Government think it’s OK for property developers and the fossil fuel industry to destroy the habitats of our endangered species just because they’re willing to pay a destruction duty?

The question ‘how much will it cost to make a species extinct’ should remain the title of a hypothetical dystopian novel, but if the Albanese Government succeeds in passing its amendment to our environment laws it will literally become an item on a Commonwealth public servant’s to-do list.

So far Labor has found few friends willing to support its further weakening of Australia’s environment laws, with the Greens and most independents thinking it fails the environment and many in the Coalition have expressed concern it doesn’t weaken them enough. Of course, the Prime Minister and the Environment Minister argue that because both the cross bench and the coalition think the proposed laws are bad it is proof they ‘have the balance right’. By Labor’s logic, if someone told you there was danger on the road ahead and that you should go left while someone else suggested the danger was best avoided by turning right, the smart thing to do is keep driving straight.

Some call Labor’s approach centrism, it looks more like cynicism to me.

Richard Denniss is the co-chief executive of the Australia Institute.