What has been needed is a credit like Biodiversity, which by definition must provide for the ongoing conservation of the area over which the credits are claimed.

Biodiversity is universally acknowledged as having at least three levels: genetic, species and ecosystem diversity. Each level could conceivably attract credits. Presumably an ecosystem level credit would incorporate the species and genetic diversity within it, and so should attract a high value credit; therefore not all Biodiversity credits will be equal.

It would be almost impossible to accurately measure Biodiversity, and relative Biodiversity. Rather than trying to count the last bit of genetic variation, an arbitrary framework with assigned values for Biodiversity should be established. Once credits are traded they will attract the value the market places on the credit, and therefore soon outgrow the need for a scientifically precise estimate of the value.

For a Biodiversity credit to retain value, the ecosystem upon which the credit is claimed must be protected. This poses a problem, as on-trading would not benefit the Biodiversity, but rather the speculator. Potential ways around this are to limit the period of speculation by issuing a 5 year bond, rather than a once-off credit, with a reinjection of funds every 5 years; or to stagger releases of credits so there is an annual inflow of funds.

There are three potential players in a NSW Biodiversity credit scheme:

• NPWS: wilderness areas would by definition attract higher value credits

• State Forests: large areas of public land, and push for on-farm forestry

• Private investment: on private land.

Obviously the NSW Government carries much less risk than any private enterprise. Private investment would need to be organised on a macro scale with many landholders participating before it attracts the same sort of efficiencies as the State Government.

State Forests have led the charge for credits of all types; firstly carbon credits, then salinity credits, and they recently announced the possibility of Biodiversity credits. The NSW Government denied this was government policy and despite repeated requests, the office of the Minister for Forestry, Kim Yeadon, is unable to supply any further information.

The driver for State Forests is that the native timber forestry is becoming increasingly less profitable, with the 98-99 Annual Report showing an apparent internal cross-subsidation of their native timber operations by the more profitable plantation forestry.

The NPWS has been quiet on the possibility of supplementing park budgets with credits. Meanwhile, the Service is actively exploring greater commercial use of parks and will be releasing a discussion paper later this year which explores options in greater detail.

Like carbon and salinity credits, a major criticism has been that companies will buy Biodiversity credits to "greenwash" the consumer. However, as local activists are proving worldwide, the fact that a company invests in a "green project" elsewhere does not preclude local action against polluting industries.

The risk that credits will not relate to actual Biodiversity values is high. What may be more important is a relative value, such as 1000 points for wilderness, 500 for well-managed national parks, 250 points for a State forest which has not been logged since 1990.

Perhaps the major benefit would be a mechanism that can provide for community and company investment in Biodiversity, which has been restricted to land purchase or non-government organisation support in the past.

And, of course, if the major beneficiary of the credit scheme is the State Government, then there could be a strong policy driver for greater protection of Biodiversity in the community.

Kathryn Ridge is Executive Officer of the Nature Conservation Council of NSW.