The Northern Territory Environment Minister has released guidance papers on a new approach to biodiversity and carbon offsets. Rather than taking the conventional approach to environmental offsets as adopted by jurisdictions like Western Australia, the Territory has proposed a new ‘target-based’ model.

Offsets are a way of balancing the environmental impact from projects. In jurisdictions such as Western Australia, where an impact cannot be avoided or mitigated, proponents are instructed to either purchase, restore or protect an area of land of equivalent environmental value for the State or contribute to an offsets fund. In doing so, the scheme seeks to result in no ‘net loss’ to the environment.

The point of difference with the Northern Territory approach is that, rather than placing the ultimate onus for environmental protection on the government, the proposed scheme will require proponents to make a comparable contribution to progress regional or Territory-wide environmental targets. This approach is, according to the guidance papers, designed to avoid the perception that proponents are ‘buying’ environmental approval, as well as ‘opaque’ requirements for achieving no net loss. The Northern Territory cites academic criticisms of the conventional model that it does not deliver the desired outcome of no net loss to the environment due to a lack of specific strategic planning.

What is the target-based model?

The Northern Territory approach will use targets tailored towards achieving certain desired outcomes, such as protecting vulnerable species and ecosystems or reducing the spread of invasive weeds, among others. These targets will be developed through consultation with academic and environmental experts, community and industry stakeholders, and the Commonwealth government, amongst others. The exact offset required for a project will be identified to address the likely impact of the project, such as those arising from its location. In comparison, according to the Territory Guidance paper, offsets under the conventional model are generally more broadly related to protecting the environment and are not tailored to achieve official State or region-wide goals. They may also be less specific to the proposed development.

Where a project is likely have an adverse impact, the proponent will be required to identify and contribute towards a suitable offset plan or plans. The contribution will be calculated using ‘simple and transparent rules’, dependent on the extent of the likely impact from the project, according to the guidance papers. Proponents will be allowed to implement offset requirements with the assistance of offset providers, who are more likely to be able to implement the targets on a larger scale.

The new Territory model is undergoing further development before being officially implemented. Time will tell whether this approach results in more a measurable benefit to the environment compared to conventional models.

The guidance papers on this topic can be found here <>.