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  • CarbonCrop Team

Carbon Learning for NZ's Biodiversity Credit System Proposal

An overview on CarbonCrop's submission for the NZ Biodiversity Credit System consultation - check out our detailed answers in this post.


The Ministry for the Environment is exploring the idea of introducing a Biodiversity Credit System (BCS). This initiative aims to incentivise actions that contribute to the preservation and restoration of the country's unique ecosystems. We have submitted our response to the consultation, sharing our thoughts and opinions on the proposed scheme from lessons learned in the carbon market, highlighting key points, and what this could mean for the future of biodiversity in New Zealand.


Should there be a Biodiversity Credit In NZ?

We're firm believers in the power of incentives. When people are rewarded for doing the right thing, they're more likely to continue doing it. This is a well-known theory of psychology, and underpins our approach to incentivising carbon removals in regenerating native forests. A well-designed biodiversity credit should be beneficial. We'd like to see balanced approach that combines the rigour of regulations with the benefits of incentives.


While regulations and penalties have their place in environmental protection, they often come with unintended consequences. The fear of punishment can create a barrier for landowners, making them hesitant to engage in activities that could actually benefit biodiversity. In some cases, regulations can disincentive those who have already been proactive in conservation efforts. If you cut down a small section of forest you had previously planted, but restore a large area of wetland should you be punished? Biodiversity is difficult to quantify, and more flexible approach would offer greater incentive. Practically speaking, if you deliver a kiwi every second year, does that diminish the outcomes ‘achieved’ in the in between years?


The Scope Should Be Broad

Every parcel of land, whether it's a sprawling national park, a privately-owned farm, or whenua Māori, has a vital role to play in our ecosystem. Restricting the Biodiversity Credit System (BCS) to specific categories of land would not only be a missed opportunity but also a disservice to our collective conservation efforts.


But we should not stop at land. Biodiversity isn't confined to soil and trees; it extends to our rivers, lakes, and even the vast expanses of our coastal marine areas. These ecosystems are intricately interconnected, each playing a unique role in maintaining the delicate balance of our natural world. How do you justify incentivising one and leaving another? At what future impact? Once they're gone, they're gone.


Focus on Outcomes, Not Just Actions

Planting a tree is a great start, but what happens next? The long-term outcome of how that tree grows, thrives, and contributes to its ecosystem that can be a challenge. The Biodiversity Credit System (BCS) should reward not just the action of planting, but also the outcome, that ensures the tree becomes a thriving part of the ecosystem.


Just ticking off a checklist—like planting a tree and walking away—won't cut it. We need to think about the bigger picture. For example, how does that tree fit into the local ecosystem? Is it helping to improve soil quality or water retention? These long-term benefits should be incentivised, as much as the initial action.


Measuring these outcomes isn't easy. It's hard to put a number on the value of a thriving ecosystem or the return of native birds to an area. But that shouldn't stop us from trying. With advanced monitoring tools and community involvement, we can reward meaningful, lasting contributions to our environment.


Should Offsets be Allowed?

Maybe.


Biodiversity credits should not be awarded for things that were obligated to happen anyway. The essence of a system like this is to incentivise people to take actions, and reward the outcomes, not to reward compliance.


However, negative actions which result in better biodiversity elsewhere may be needed. In this case offsetting may be valuable, but there needs to be strong consideration and the positive outcomes need to outweigh the negative impacts.


Ultimately, the goal should be to encourage proactive conservation and restoration activities, rather than using credits as a 'get out of jail free card' for development projects that harm biodiversity.


Interaction With Carbon Markets

We see biodiversity credits complementing existing carbon markets by taking a more holistic view of land use, capturing both carbon sequestration and biodiversity benefits. This approach would provide a more comprehensive incentive structure for landowners and investors, encouraging both carbon reduction and biodiversity enhancement.


However, not all biodiversity outcomes are directly linked to carbon sequestration. Where related, they should work together to prevent double-counting but the BCS should not be restricted solely to projects that have a carbon component.


Legal Protection Is Not Enough

Legal frameworks like covenants and conservation acts provide a necessary foundation for protecting our natural habitats, they are not the end-all solution for increasing biodiversity. For instance, simply covenanting a piece of land doesn't guarantee that native species will flourish there. It's the active conservation efforts like habitat restoration, pest control, and ongoing monitoring, that makes the real difference.


Legal protection can sometimes create a false sense of accomplishment, leading us to believe that once an area is legally protected, the work is done. Legal protection is a starting point, but it's not sufficient on its own to bring about meaningful change. This is where a well-designed Biodiversity Credit System comes into play. By incentivising both preservation and active restoration, a BCS can fill the gaps left by legal protection alone. It can serve as a catalyst for real, impactful change, rewarding those who go beyond the bare minimum and invest in creating thriving ecosystems.


The Role of Government

The government should play a pivotal role in establishing the framework and standards for the system, rather than trying to manage every aspect of it.


Government involvement should be designed to enhance the system, not burden it. Lessons can be learned from carbon markets, where poor system design and implementation have sometimes hindered it’s effectiveness.


A significant role the government can play is in the setting of rigorous, science-based standards for how credits are quantified and verified. The government can add a much-needed layer of credibility and trust to the BCS, ensuring that the credits awarded are meaningful and based on actual contributions to biodiversity. By focusing on setting robust standards for quantification and verification, and by investing in credits, the government can play a vital role in making the BCS a trusted and effective tool for biodiversity conservation in New Zealand.

 

We think a Biodiversity Credit is a practical way to make a lasting impact on New Zealand's ecosystems, but a system like this can only be as good as the voices that shape it. The consultation period is open until the 3rd November 2023, and this is your chance to weigh in. Feel free to borrow from our submission as you formulate your own views. The deadline is approaching, so submit your thoughts and help us create a system that truly serves New Zealand's biodiversity needs.




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