Australia’s natural environment generates an impressive $510.7 billion annually, equating its value to that of the finance and mining sectors combined. Despite this significant contribution, a report released by the environmental group 30 By 30 highlights a concerning lack of investment in biodiversity from the federal government. The report underscores the urgent need for increased funding to ensure the sustainability of Australia’s ecosystems and their economic benefits.
The findings come as the federal government prepares to unveil its emissions target for 2035 under the Paris Agreement. They also follow a survey conducted by Farmers for Climate Action, which revealed that many farmers view climate change as their most pressing challenge.
Valuing Nature’s Contributions
The report, titled “Nature Economics” and prepared by Cyan Ventures, aims to quantify the economic impact of Australia’s natural resources across various industries. Author and managing partner Fraser Thompson noted the complexity of assigning a dollar value to these benefits.
“Nature doesn’t send us an invoice; it’s not like we pay for these ecosystem services that we enjoy,” Thompson explained. He characterized the situation as a classic “information failure” in economics, where the lack of measurable indicators leads to undervaluation of nature’s contributions.
The analysis identified both direct and indirect benefits provided by the environment. Direct benefits, which include food production, raw materials, and tourism, accounted for approximately $138.2 billion annually, representing 5.3 percent of Australia’s gross domestic product (GDP). Tourism and water services were the largest contributors within this category.
When factoring in indirect benefits—such as climate regulation, air quality, and flood control—the total economic contribution of Australia’s natural environment rises significantly. The report estimates that when these indirect benefits are included, the total value reaches $510.7 billion, equivalent to 20 percent of Australia’s GDP.
The Call for Increased Funding
Despite the considerable financial contributions of natural ecosystems, federal government spending on biodiversity has averaged only $476 million per year over the past decade. Projections indicate an increase to $762 million in 2024, representing just 0.1 percent of the federal budget.
The report advocates for a substantial increase in environmental funding to one percent of the budget, which would translate to approximately $3.4 billion annually. It suggests that this funding could be sourced by reallocating funds from the Fuel Tax Credit scheme and disaster recovery expenditures.
Tim Nicol, director at the Pew Charitable Trusts, emphasized the critical link between Australia’s future prosperity and its ecosystems. He urged governments and businesses to recognize the importance of investing in nature, likening it to the way infrastructure investments are treated.
“We need to start treating investment in nature the same way we treat investment in infrastructure,” Nicol stated, highlighting the necessity for a paradigm shift in how natural resources are valued and funded.
In conclusion, the report from 30 By 30 serves as a vital reminder of the economic importance of Australia’s natural environment. The findings call for immediate action to enhance funding for biodiversity, ensuring that the nation’s ecosystems continue to thrive and support the economy for years to come.
