A national scheme to pay landholders for protecting biodiversity will form part of discussions when environment ministers meet for the first time since the federal election on Friday.
Details of the scheme, slated to provide certificates that can be sold for restoring habitat, are expected to be informed by the troubled NSW offsets program.
Success of a voluntary national biodiversity market is dependent on businesses opting in, while demand from the private sector remains unclear, Australian Research Council fellow Dr Megan Evans said.
Dr Evans raised several concerns in a submission to the proposal, including potential for a repeat of possible fraudulent behaviour alleged to have occurred under the carbon credit scheme.
"The national biodiversity market legislation is drafted as a mirror of the Emissions Reduction Fund, which is currently under review for major integrity concerns," she said.
"It is suggested that the Clean Energy Regulator would be charged with governing this market, which is highly concerning given its role in the ERF [Emissions Reduction Fund] is part of the scope of this independent review."
Dr Evans co-authored a series of papers blowing the whistle on the Australia's carbon credit scheme, labelling it a fraud to both the environment and the taxpayer.
She said the government appeared to be contemplating using the biodiversity market to generate certificates or credits to offset regulated impacts on matters of national environmental significance.
"This opens the door to erode existing rules on compliance offsets, including 'like for like', that will lead to even worse outcomes for threatened biodiversity," she said.
"There is huge potential for rorting and greenwashing."
She said, to provide real benefit for native biodiversity, a clear separation between rewarding biodiversity stewardship and existing offset schemes was required.
An initial investment of public money should be made to drive private sector confidence and stimulate activity, Dr Evans said.
She said a truly beneficial model would invest significantly more money than currently spent by governments, generating benefits beyond biodiversity losses and actually reverse biodiversity decline.
"A market that relies on credits or offsets to generate biodiversity gain by definition cannot do this," Dr Evans said.
"As the demand is purely driven by biodiversity loss elsewhere - the net outcome can be no better than existing trends of decline.
"This market is no silver bullet."
Environment Minister Rebecca Vassarotti said a national biodiversity market must reward good environmental stewardship on private land, not create a market in offsets.
"I oppose any market scheme that will see the trading of biodiversity to offset habitat loss through development," Ms Vassarotti said.
"The 2021 State of Environment Report was clear, we are out of environment and out of time."
The meeting of ministers will also address the Australian government's long-awaited response to the Samuel Review of the EPBC Act and a national plan to protect 30 per cent of Australia's land and marine areas by 2020.
Ms Vassarotti will push for significant federal investment to address the "urgent reforms" required to prevent further biodiversity loss.
She said Australia could afford the approximately $1.7 billion a year needed to protect Australia's wildlife and ecosystems.
"Private investment is no substitute for financial leadership and proper investment from the Commonwealth, matched by the states and territories," Ms Vassarotti said.
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