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Last week, the Australasian Agricultural & Resource Economics Society (AARES) held a two-day event in Sydney. People from inside and outside government came together to discuss natural capital. Speakers from around Australia and around the globe attended, including our own Carl Obst.

Our big takeaway? Biodiversity markets can play an important role in securing positive environmental outcomes.

But, in order for these markets to contribute effectively, we need to engage all market players, including investors, government regulators and suppliers of credits, such as farmers. They each need to understand how their roles contribute to positive environmental outcomes. And they need to know how to take part in the market.

Economists have been developing environmental markets for decades. This means that we don’t need to redesign the wheel here. Instead, we need to answer some key questions, including:

  • What exactly is being traded in a biodiversity market?
  • Who are the buyers and sellers?
  • What are their motivations?
  • What value will buyers and sellers get from taking part in the market?
  • What checks and balances will make sure that the market has integrity?
  • How do biodiversity markets work with other environmental policies?

If we underpin biodiversity markets with natural capital accounting (NCA), we create integrity, transparency and accountability in those markets. We create confidence among participants through use of a shared knowledge base. And we support a market that grows at scale, while driving positive environmental outcomes.

At IDEEA Group, we welcome the development of biodiversity markets. And we encourage the use of NCA to support decision-making, investment and growth by all participants. We can define the benefits and the value that nature provides to all endeavours. This holistic viewpoint – driven by data and accounting methodology – works toward long-term financial and environmental stability.

NCA is a win-win for nature and for business.