Traded biodiversity 'credits' are key to Labor's environmental plans, but critics are not convinced

Ever wondered how much money a single koala might be worth?

In several states, there’s a market that can tell you.

“At the moment, the price for the koala credit is about $400,” explained Megan Evans, an environmental policy researcher at the University of New South Wales.

A credit is the compensation a developer would need to pay in New South Wales for killing a koala’s habitat — known as a “biodiversity offset”.

And you could have bought one of those credits for $250 in 2020, making a 60 per cent return in a few years.

There’s even a trading dashboard where you can keep an eye on the current price of koalas and any other threatened species, if you’re looking to make a killing on nature.

“It’s a market valuation, where the value of species credit is revealed through market transactions,” Dr Evans said.

A screenshot of NSW's species credits, showing different animals and line graphs of value.
In New South Wales’ Biodiversity Offset Scheme, “species credits” can be bought to offset damage to their habitat.(Supplied)

Former federal treasury boss Ken Henry said what Australia needed now was a “market for restoring nature”.

“We’ve had those markets to destroy nature … What we’re talking about here is markets to repair nature and not markets to destroy nature,” said Dr Henry, an economist who now sits on a number of boards for organisations that are trying to put an economic value on nature restoration.

And the federal Labor government is listening to people such as Dr Henry.

Biodiversity credits part of Labor’s environmental plans

So far, there’s no similar market at a federal level. But a market where koala credits are traded is now central to the federal Labor government’s plan for halting Australia’s extinction crisis — and Labor hopes it will do more than trade in the destruction of nature.

“One of our government’s most important priorities is to see new private investment in nature,” Environment Minister Tanya Plibersek told a meeting of environment ministers at the G20 in August.

The reason for that focus on private investment is cost.

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