How ‘Green Wall Street’ crashed, the nature repair market explained


The Australia Institute’s forensic analysis of a PwC report exposed such deep flaws in the claim nature repair market could “unlock $137 billion” in investment, the consultancy firm was forced to ‘walk it back’ and the government to delay its legislation.

In September 2022, Environment Minister Tanya Plibersek speculated that “one day Australia will house its own Green Wall Street: a trusted global financial hub, where the world comes to invest in environmental protection and restoration.”

The quote attracted plenty of media attention, especially once the details of the government’s plans emerged, centred around a proposed Nature Repair Market (NRM). The NRM would trade “nature credits” that would be generated by biodiversity-enhancing projects.

Our research

Much of the government’s justification for its planned Nature Repair Market was based on a report prepared by consultants PricewaterhouseCoopers (PwC) in 2022. This report—prepared, apparently, at the firm’s own initiative—promised that “a biodiversity market could unlock $137 billion in financial flows to advance Australian biodiversity outcomes by 2050.” Minister Plibersek quoted this figure on several occasions, including on the introduction of the Nature Repair Market Bill into Parliament in March 2023. Many government MPs used the $137 billion figure, and it was widely reported in the media.

The Institute’s third submission in March 2023 was a forensic analysis of the PwC report and its conclusions. On close inspection, it turns out that the only thing remarkable about PwC’s claims was their audacity. The Australia Institute’s analysis found the PwC report had significant flaws, including:

  • The headline $137 billion figure does not refer to the potential benefits of the NRM, but to a range of activities, most of which have little or no link to the NRM or nature markets generally; and
  • The $137 billion figure appears to be in 2050 dollars; if converted back to 2023 dollars, the figure shrinks to $70 billion, and only 25% of this actually relates to the sort of tradeable market activity envisaged for the NRM.
  • The report does not actually model the economic benefits of the NRM, nor environmental markets in general;
  • The report contains no explanation of methodology for the modelling to which it does refer;

PwC ‘walks back’ its report

The Australia Institute’s analysis exposed such profound problems with the PwC report that the Senate Standing Committee on Environment and Communications sent it to PwC for a response. The firm made no argument with our analysis, and agreed that:

“The report did not attempt to outline the impacts specific to the Nature Repair Market, as it was developed both independently of the Australian Government and at a time when the Nature Repair Market Bill 2023 was yet to be made public. Nor does the report attempt to measure the net economic benefits, economy-wide impacts or environmental benefits of the Nature Repair Market policy.”

This makes it clear that the government’s constant reliance on the $137 billion figure as a basis for the NRM policy was, and remains, unjustifiable.

PwC’s response to our research was the subject of multiple media reports, most of which took the line that the firm had “walked back” its claims. The Nature Repair Market Bill passed the House of Representatives in June 2023, but it has since stalled in the Senate.

In late June 2023, our Executive Director, Dr Richard Denniss, appeared at the Standing Committee’s inquiry into the NRM bill, and pointed out further flaws in the NRM plan, including the fact that projects that are currently used to generate carbon credits could simultaneously generate NRM credits, effectively double-dipping into both markets.

“The market demand that will be unleashed or unlocked here is a market for nature destruction—that is if I’d like to destroy some koala habitat over here I might like to buy an offset over there. At best, there is no nature repair” – Richard Denniss

The trouble with Environmental Markets

Environmental markets are difficult at best and destructive at worst. Australia’s carbon credit market is widely seen as a ‘fraud’. Water trading and commoditisation in the Murray Darling Basin is perennially mired in controversy, while fish kills and other environmental catastrophes continue. Indeed, Australia already has biodiversity markets at a state level, and these schemes are also controversial.

In Victoria, the state Auditor-General concluded in 2022 that the state’s scheme had “not achiev[ed] its objective of no net biodiversity loss from native vegetation clearing on private land”, and panned the state’s maintenance of its credit register. New South Wales’ biodiversity market scheme is even more dysfunctional: in 2022, an extensive inquiry into the scheme found “multiple problems … including serious flaws in [the scheme’s] design and operation that raise fundamental questions about whether it can achieve the stated goal of ‘no net loss’ of biodiversity.”

Nature Repair Market Bill temporarily withdrawn

The government was forced to temporarily withdraw the legislation due to the serious flaws exposed, but intends to proceed with the Bill, despite being unable to provide any economic or environmental justification for the policy.

The Australia Insitute will continue to publish research that contributes to robust evidence-based environment policy, not buzzwords and magical thinking.

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