Greens call for environment offsets probe as Tanya Plibersek dreams of Australia as ‘green Wall Street’

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The Greens have called for all environmental offsets schemes across the country to be suspended pending an independent review, after the New South Wales system was found to be riddled with integrity concerns and failing to protect endangered species.

It puts the minor party at odds with the environment minister, Tanya Plibersek, who planned to use a speech on Thursday to argue that well-designed environmental markets, including those using offsets, could be a “powerful force for good”. She said she hoped Australia may one day be home to a “green Wall Street” that attracted conservation investment from around the world.

The Greens’ environment spokesperson, Sarah Hanson-Young, said on Wednesday biodiversity offset schemes had been “exposed as a sham” and called for an immediate moratorium on the clearing of wildlife habitat while they were investigated.

It followed the NSW auditor general on Tuesday finding the state government had failed to properly design core elements of its scheme and had no strategy for ensuring it helped protect the environment. The auditor general review was one of several that followed extensive reporting by Guardian Australia that revealed serious flaws and conflict of interest concerns in the state system.

Hanson-Young said the damning report added to the evidence of the recent state of the environment report, which found Australia’s wildlife and wild places were in poor and deteriorating health.

“Our environment is on the verge of collapse and governments that allow schemes to continue that push threatened species and ecological communities further to the brink will be complicit in this natural crisis,” she said. “Dodgy biodiversity offsets schemes are doing more harm than good and should be suspended in all jurisdictions and face a full independent review.”

But, in speech notes released before her address to a G20 environment and climate ministers meeting in Bali, Plibersek backed environmental markets as important to make it “easier for businesses and philanthropists to invest in projects that repair and protect nature”.

She said that was why she and the prime minister, Anthony Albanese, last week announced the government would create a biodiversity market, which she described as a “nature market”. The scheme would recognise private landholders who restored and managed habitat by granting them biodiversity certificates that could then be sold to other parties.

In her speech notes, Plibersek said the nature market would work in tandem with the national carbon credit scheme, which she described as having “high integrity”. The carbon credit scheme is being reviewed after one of the architects of the scheme said it was hurting the environment and had wasted more than $1bn in taxpayer funding.

She said it was up to governments to lead the way on climate and environmental protection, and nature markets could never replace government effort, but by placing an economic value on positive environmental outcomes they could incentivise protection and restoration projects, particularly on private land.

“We need to make sure we do it right,” she said. “A bad market can be worse than no market if it’s poorly designed, or underregulated, or if it greenwashes or creates perverse incentives.”

The minister said a successful market would need to meet three conditions: that the benefit from planting native species, restoring mangroves, removing pests and weeds from an area of land could be accurately measured; that there were laws to make sure someone buying environmental protection can be sure they are getting what pay for; and that there were biodiversity certificates that made clear what was being bought and sold.

She said Australia was “very well placed to meet all these challenges”.

“Ultimately, I would like to see the market truly valuing nature, so that protecting forests is more valuable than destroying them,” Plibersek said. “And maybe one day Australia will house its own green Wall Street: a trusted global financial hub, where the world comes to invest in environmental protection and restoration.”

The government’s biodiversity market plan was cautiously welcomed by some environment groups, but sharply criticised by the Wilderness Society, which said it was evidence the Albanese government had a similar environmental agenda to the Morrison government.

The government has since released a fact sheet and called for submissions on how the market should work. Submissions close on 16 September.