8.4 - Investments in restoration could be better coordinated to maximise outcomes

Commonwealth Government programs for investment in environmental restoration have been a constant feature of national environmental policy over the past 20 years. These include the National Heritage Trust, Caring for Country, the Environmental Stewardship Program, the National Landcare Program, Green Army, Threatened Species Recovery Fund and the Reef Trust.

The current streams of Australian Government funding allocated towards environmental protection conservation and restoration, despite being aligned with MNES, are not comprehensively coordinated to prioritise investment in a way that achieves the greatest possible biodiversity benefits.

The reforms proposed by this Review, with a focus on National Environmental Standards and national and regional planning, will provide a foundation for more effective prioritisation and coordination of investments by governments.

There is an opportunity to provide the policy settings to better leverage private interest in investing in the environment as well as drive down the cost of restoration. A global shift towards companies focusing on their corporate social responsibilities has resulted in growing interest from the private sector to invest to improve environmental outcomes. The pool of available capital has grown over the past decade. In 2018 the responsible investment market in Australia reached $980 billion and sustainability-themed investments accounted for $70 billion¹²⁷. It is also likely the resources available to invest in environmental outcomes will continue to grow.

The biodiversity offset markets proposed are one destination for this capital. Philanthropic and other investors could also be voluntary participants in the market purchasing restoration.

Contributions to the Review have suggested that a national biodiversity trust be established that links government and philanthropic investments, as well as enabling developers to meet their offset obligations. These proposals are similar to those implemented in some states and territories, such as the NSW Biodiversity Conservation Trust and Queensland Land Restoration Fund. These models are government-run, sometimes independent legal entities and investment vehicles designed to oversee the collection and allocation of money to improve the environment. They have legal, governance and financial structures, and capitalisation and resourcing strategies. Environmental trust funds come from public funding, philanthropic donations and from developers who pay the trust to discharge their development approval offset obligations.

Contributions to the Review have highlighted the key role the philanthropic sector plays in 'testing new solutions to tough problems'¹²⁸. A proposal posed to the Review is for co-investment to advance innovation and bring down the costs of environmental restoration¹²⁹. This is akin to the role that the Australian Renewable Energy Agency (ARENA) plays in supporting activities in the renewable energy sector that are not yet commercially viable. ARENA co-invests with the private sector in projects to research, develop and demonstrate new approaches, providing a pathway to prove the viability of technologies to support commercialisation and uptake. The uptake of proven restoration 'technologies' or new approaches could be accelerated by government—for example, by recognising their suitability in the biodiversity market or by underwriting access to the finance need for upfront investment.

The merits of the application of these types of models for biodiversity will be further explored before finalising the Review.