Dr Ian Brettell: We need nimble policy and experimentation to put a price on nature

Dr Ian Brettell, Biodiversity Policy Officer at the lab, muses on how we can ensure the latest technological advances benefit nature and biodiversity.

Breakthroughs in artificial intelligence are rapidly changing the way we approach biodiversity conservation. Improvements in artificial intelligence, DNA sequencing, remote sensing, and drone technologies have enabled an unprecedented ability to monitor the health of ecosystems. 

These technological advancements in measuring biodiversity create an opportunity to put a price on nature, making it more expensive to do anything that degrades our environment and generating income for actions that restore it. 

Internalising nature in our economic system is not a new idea. But, given the current state of nature, previous attempts to realise this goal are generally considered failures. 

With the growing awareness that our natural systems are now teetering on a precipice, discussions around how to structure a ‘price on nature’ so that it ensures real and significant improvements in biodiversity are gaining impetus. 

Creating effective biodiversity credit markets

Should biodiversity credits be used to offset “unavoidable” biodiversity loss elsewhere? If not, would a sufficient “voluntary” market sustain the system? Should there be a secondary market? Should credits be unitised based on a standardised biodiversity metric or land area? And how does one even measure biodiversity? 

There is simply not enough information to answer these questions with any certainty – though the acceleration of new approaches, methodologies and frameworks holds great promise. (Our SEED Index, based on a methodology that seeks to measure biological complexity – or ‘biocomplexity’ – is one such example. You can read more about it here.)

When scientists are faced with uncertainty, they run experiments. 

Public policy experiments have been used for decades to assess the effectiveness of universal basic income, education reforms, and measures for sustainable urban development. These kinds of experiments can be implemented now to determine which biodiversity credit system models are most effective. For example, governments can set up a number of small-scale schemes designed in slightly different ways while controlling for other variables and then compare the outcomes. 

Although this process will take several precious years to reap reliable results, and some uncertainties will inevitably remain when comparing the outcomes across ecoregions or jurisdictions, they will undoubtedly inform the creation of more robust schemes than a purely speculative design process. 

The C40 Cities Climate Leadership Group is a strong example of a coalition that uses its distributed structure to test different methods for combating climate change at a smaller scale before sharing the results and knowledge with its wider network. It is a model that could be expanded within and across nations.

Open conservation databases like Restor, the largest network of restoration and conservation sites globally, can also enable natural experiments. Through Restor, projects applying the same land management practice can be grouped and compared to other projects applying different practices. Using the SEED Index as a standardised metric for measuring biodiversity, these comparisons can tell us which land management practices are most effective at improving biodiversity. 

Using public policy tools to determine the right policy settings

Another option is designing ‘primary’ legislation that can be more easily amended by ‘secondary’ legislation, which does not require the same degree of parliamentary scrutiny or approval. 

The proposed law for establishing the Australian Nature Repair Market – the world’s first national biodiversity credit market – follows this model. The primary legislation sets up the system’s framework. The details on which land use practices are eligible to produce credits are then fleshed out, and flexibly amended, through secondary legislation by a standing panel of experts.

A more recent concept is a ‘regulatory sandbox’, where companies are permitted to run small-scale, controlled experiments in the real world under the supervision of a regulator. The process was first developed in the finance sector for testing new investment tools and has been recommended by the EU Council as an innovation-friendly regulatory framework that can help address disruptive challenges in the digital age. 

Perhaps most importantly, this structure fosters a deep engagement between regulators and innovators. A regulatory sandbox may be appropriate for testing new methods of regenerative agriculture; monitoring, reporting and verification techniques, such as the SEED Index; and biodiversity credit and funding schemes.

Innovation abounds. The dynamic we’re observing is the ability of powerful technology to beget even more powerful technology. Yet, every new technology used to solve our most profound problems can equally create new ones.

Policy is key. We need to update our institutions to ensure we can harvest the fruits of technological progress. Putting a price on nature in a way that truly benefits people and planet requires rigorous testing, respect for complexity and a spirit of openness and transparency to move into an equitable, nature-positive future.