There are growing opportunities for land managers to realise returns from investing in natural capital.
More people and companies are thinking about environmental outcomes when making decisions. This means more chances for landowners to earn money from their natural assets in environmental markets.
These markets include:
- existing environmental markets: including biodiversity markets and carbon markets (see types below)
- emerging markets: as more people and companies consider environmental outcomes, new opportunities are emerging.
Steps to getting involved
Local Land Services can help you understand your options in environmental markets. Here’s a step by step guide to help you navigate the process.
Read through all these steps for a general introduction. You can then contact Local Land Services to help you identify and learn more about natural capital and environmental market opportunities.
Learn about types of environmental markets in Australia
There are several existing environmental markets in Australia. These can provide a range of opportunities for land managers.
Biodiversity markets
Potential opportunities for land managers include:
- creating biodiversity credits by taking care of species or ecosystems on your land
- selling these credits to governments, businesses, or individuals
- accessing schemes including the NSW Biodiversity Offsets Scheme.
Carbon markets
Opportunities in carbon markets include:
- generating carbon credits by reducing emissions or increasing carbon sequestration (capturing and storing carbon in trees and soil)
- selling these credits to willing buyers
- accessing schemes like the Australian Carbon Credit Unit Scheme.
These projects can also benefit the environment or First Nations communities, earning extra rewards.
Our carbon farming page provides more information for landholders.
Sustainable and green finance
There are opportunities in finance and banking for land managers:
- The finance sector values natural capital with products like green loans and bonds.
- These products manage risk and encourage investment in agriculture.
Commodities markets
Join certification schemes and you may be able to charge premium prices for your produce.
Examples of certification schemes include:
- the Australian Government's Climate Active carbon neutral certification program
- ZQ Merino Grower Standard.
Emerging market opportunities
In Australia, environmental markets are in their early stages. As demand grows to protect natural capital, there are likely to be further financial rewards for activities that protect biodiversity, reduce pollution and improve water quality.
Understand the benefits
With careful decision-making, environmental markets could lead to new sources of income for landholders while also encouraging sustainable land management practices that benefit the environment.
Business and marketing strategies
Showing your good natural capital management practices could allow you to sell goods at a premium price. It may also protect your existing market access or let you expand into new markets.
Cost saving strategies
Investing in natural capital could reduce your business costs. For example, improved pest control and nutrient cycling may reduce your need for pesticides and fertilisers.
Asset value
Investing in your natural capital may increase the value of your land, business, share price or other assets.
Sustainable finance
By improving natural assets on your property, you may be able to access sustainable and green loans and other financial products that provide discounts or other benefits.
Environmental credit trading
You could trade environmental goods and services through environmental market trading schemes, such as:
- credit schemes (like the Australian Carbon Credit Unit Scheme)
- tradeable permit schemes
- auctions
- competitive tenders.
Tax management
You may get deductions, concessions or offsets on existing and future environmental taxes, levies and charges.
Incentive payments
You may be able to access subsidies, rebates, funding, grants and compensation schemes.
Evaluate the risks
Like any investment there are risks when engaging in environmental markets. If you are unsure, seek advice from financial and legal experts. Keep in mind that even experts are still learning in this rapidly evolving field.
Keep up to date with changes to help mitigate risks. Make sure you're dealing with trusted brokers and service providers.
Market and business risks
New and emerging markets may be unstable, leading to price variations and changes in buyer demand.
In the future, farm businesses may be required to show that they are minimising impacts on nature. This may be needed to access to some markets in the future.
Political and regulatory risks
Changes in government policies and regulations can impact environmental market requirements, subsidies or tax structures. Keep up to date with any potential changes.
Financial risks
It's possible to lose money due to unexpected costs, a lack of funding, project delays, unreliable resources, underperformance or other issues.
Legal risks
Legal issues may arise from contracts, ownership agreements or planning approvals. Failure to meet market or contractual obligations can result in penalties.
Performance and compliance risks
People may face fines or other negative outcomes if they don’t meet performance requirements or timeframes.
Management and technical risks
People might struggle with a lack of technical expertise and need external help. It is important to make sure you have enough legal, administrative and business support. Make sure you are dealing with trusted brokers and service providers.
Know what you've got - identify natural capital
Identify existing and potential assets on the land
- natural assets
- ecosystem services, and
- environmental services.
Evaluate quality and quantity
Assess the amount and condition of these assets.
Read about Understanding Natural Capital to help you identify and evaluate these different types of assets.
Know what’s possible - consider your options and opportunities
Consider your options from business, trading and production perspectives.
Revisit Step 1 above to help you think about potential opportunities.
Evaluate the benefits and risks of each opportunity.
Know what to do - get support and create a plan
Now you have more of an understanding about what steps to take, make a plan for how to maximise your return.
Local Land Services can help you identify and learn more about the natural capital and environmental market opportunities available. Seek advice from trusted financial, legal and business advisors.
Talk to a Local Land Services Natural Capital Advisor.
Take action
Put your plan in place, monitor activities and measure outcomes, and realise the benefits.
Read our case studies and watch our videos for inspiration!
Disclaimer
The information provided is of a general nature and does not take your specific needs or circumstances into consideration. Please ensure that you review your own situation, objectives and requirements and seek professional advice before making any business or financial decisions.
Find out more
- Local Land Services offers support, advice, and training to help land managers start in environmental markets.
- Understand Natural Capital: for NSW land managers helps you to identify the natural assets and ecosystem services on your land.
- Natural Capital Service Finder helps you find opportunities and programs through trusted providers.
Contact Local Land Services NSW
Our team welcome your enquiries, feedback and comments.
Local Land Services is moving to nsw.gov.au. During the change, you might find the information you are looking for at lls.nsw.gov.au