Yes, we need to put a price on nature to save it.

It's lovely to be here with all of you today to discuss this really important topic.

I wanted to start by noting that the UN estimates that $7 trillion is spent annually by private and public sources of capital in nature negative economic activity. So we are in a situation where we need to turn this completely on its head so that economic activity is supporting the long term conservation and restoration of nature.

I've been an investor for nearly 20 years in sustainable forestry, land, and carbon and biodiversity markets, and my experience is that price signals can be very potent in shifting land use towards more sustainable and nature positive outcomes. So where are we today in valuing nature and putting a price on nature?

Well, today, here in Australia, there is an enormous value gap between Nature and Production. The most highly productive agricultural land in Australia, for example to grow orchards, goes for about $35,000 a hectare. Plantation forestry—eucalyptus plantations and pine plantations—around $15,000 a hectare. But the value of remnant, native vegetation is around $700 a hectare. That is an enormous value gap and reflects the fact that when we don't value nature, we destroy it.

So how do you address that value gap?

Carbon markets are an important way to create economic value for the climate mitigation provided by forests, soils, and other ecosystems. For ten years here in Australia, we have had an Australian Carbon Credit unit market and project methods, and nature-based solutions have provided the biggest source of supply, by far, to this market. And at the same time that we've been progressing over the past decade on ACCU methodologies, the price has been steadily rising from about $15 a ton about ten years ago, to about $35 or so today, and heading towards over a $100 a ton over the next five to ten years.

And let's be clear, millions and millions and millions of tons of abatement will have to come from Australia’s land sector to support Australia’s decarbonization pathways and net zero ambition across sectors.

So as the price gets higher and higher over the next few years, what we're going see is that more and more capital is going be shifted towards reforestation. And not just plantation forestry but also permanent plantings of native vegetation. I'm on the board of Greening Australia, which is Australia's largest land restoration organization. We are already seeing that buyers are willing to pay double the price of the spot ACCU price for highly biodiverse environmental plantings. Impact oriented capital and corporates are starting to partner with Greening Australia to invest in biodiverse environmental restoration.

Let me offer another example from the United States. Under the Clean Water Act in the United States, there's a requirement of no net loss of wetlands, and public and private developers of land must follow the mitigation hierarchy. That means that they have to purchase mitigation credits from wetland mitigation projects for unavoidable impacts.

We invested in a wetland mitigation bank in central Indiana quite a number of years ago, where we saw that there was a lot of development pressure from the Department of Transportation and also commercial developments. We decided to turn a soybean field, which was formerly a wetland, back into a functioning wetland ecosystem. The value at that time of a soybean field was about $7,000 or $8,000 US dollars an acre, and when we underwrote or looked at investing in that project, we estimated that the credits would sell for about $45,000 or $50,000 an acre. And that turned out to be true. By the time we sold out of that mitigation bank, about eight to ten years later, those credits were selling for about a $110,000 to $120,000 an acre. This reflected the fact that there was a lot of demand due to development pressures, and there was a scarcity of that ecosystem. So the road projects and real estate projects needed to reflect the trust cost of restoring nature as part of doing business.

I wanted to end by noting that financial markets and these instruments are just a construct, and the quality of what we get comes down to design and to trust. Here are five things I think are important to make markets work.

First, environmental markets have failed conservation, and in particular carbon markets have failed tropical forest conservation. We need programs that enable stewards of land and forests to be paid for conserving forests and ecosystems for the long term.

Second, price signals are low if there's not regulated demand. We must move beyond voluntary markets to create real value for nature.

Third, perverse outcomes need to be avoided. We must have a spatially explicit vision of what nature positive looks like in one landscape which has to provide food, fibre, fuel, conservation, restoration, and community benefits.

Four, verification and audit and measurement of improvement in condition of nature is critical for ecological integrity and trust.

Finally, fifth, there must be substantive benefit sharing with farmers, traditional owners, indigenous communities, and other land stewards of land.

Thank you, and I look forward to the further discussion.