Categories: Bitcoin Business

Blockchain ‘Biotokens’ an alternative for struggling NSW Biodiversity scheme

Click here to view original web page at which-50.com

A blockchain project has been developed in a bid to bring more transparency to the NSW Government’s controversial Biodiversity Offset Scheme. “Biotokens” traded in a new digital marketplace, would be used as the biodiversity credits farmers and developers pay to clear land in NSW.

The immutable records and open marketplace, developed by NSW company BioDiversity Solutions Australia, would theoretically bring more transparency and efficiency to the current credit exchange process. But environmental groups say the technology can not correct a fundamentally flawed scheme.

Laws introduced by the NSW coalition government in 2017 created a new Biodiversity Offset Scheme, requiring land clearers to meet “credit obligations” when they cleared sensitive land by contributing to “biobanks”. Landholders elsewhere can establish biodiversity stewardship sites to generate credits, which can be purchased by land clearers through an intermediary the Biodiversity Conservation.

The scheme has been heavily criticised for its flawed ‘like-for-like’ approach to offsetting land clearing as well as a loosening of oversight – land owners can now conduct self assessment on the potential biodiversity risks of their land clearing, needing external approval only for highly sensitive areas. So far, under the market based approach, land clearing has skyrocketed in NSW.

The Guardian reports the area cleared in 2013-14, when the previous Native Vegetation Act system was in place, was 9,000 hectares. In the first year of the Biodiversity Offset Scheme the amount of land cleared in NSW nearly tripled to 27,100.

According to the Biodiversity Conservation Trust’s first annual report, in the first year only three developers paid a total of $318,000 for biodiversity credits to offset their land clearing. Further transactions are unclear. The public register for transactions of the biodiversity offset credits currently contains no records.

Saul Deane, the Urban Sustainability Campaigner at Total Environment Centre, welcomes a new approach but says the digital solution highlights the current transparency problems with the NSW scheme.

“If we look at transparency and embedding value in a bio-bitcoin, there would appear to be some merit in the idea, for a process that at the moment is done in a bit of black box, and the value is hard to gauge and determine – a bitcoin approach may make that immediate and transparent,” Deane told Which-50.

Blockchain approach

BioDiversity Solutions Australia, a privately owned regional business based in Port Macquarie NSW has developed a new blockchain prototype, in partnership with the Commonwealth Bank of Australia.

The prototype allows digital BioTokens to be openly traded in a blockchain-powered marketplace, according to the two companies.

Blockchain technology, which creates immutable records, could bring more transparency to the current scheme which currently relies on public registers and intermediaries.

“Our vision was to help facilitate the protection of precious environmental ecosystems, while also creating an alternative source of income for landowners and rewarding them for preserving biodiversity on their land,” said BioDiversity Solutions Australia Managing Director, Rod Barnaby, in a statement.

In a video explaining the technology, CBA’s head of experimentation and commercialisation for blockchain, AI and emerging technology, Sophie Gilder, says the blockchain technology could bring down process of buying and selling credits down from weeks to seconds.

“The BioTokens can be programmed with complex scheme rules so that compliance and administration is automated, market activity is transparent and real time, and marketplace participants have a simpler, streamlined experience,” Gilder added in the statement.

However, Deane argues there is a danger solutions like BioTokens reinforce idea that biobanks are a viable solution for widespread environmental challenges.

“Our issue is that it would appear to cement in the idea that biobanks have a universal quality to them, a fungibility that doesn’t exist in nature – the idea that a biobank in western NSW has an equivalent value to a Coastal one – they may well have a similar cost but not value, but both are unique and cant actually be traded for conservation outcomes.”

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