Australia could lead the world with the introduction of a scheme to make it easier for businesses and philanthropists to invest in nature repair programs.
But the peak conservation body says the government should be focused on strengthening Australia's existing environmental laws rather than creating a new nature repair market.
Environment Minister Tanya Plibersek introduced her proposal for a repair market to federal parliament on Wednesday.
It would allow landowners to be paid by a third party for protecting and restoring nature on their land.
Possible projects would include removing drainage ditches to restore natural marsh habitats, support for Indigenous rangers to remove feral animals as well as seagrass meadow restoration.
The Clean Energy Regulator would have monitoring and enforcement powers to make sure any funded projects were following restoration rules and regulations.
But the Australian Conservation Foundation said the test for the repair market would be whether it delivered genuine benefits for nature.
The foundation's national biodiversity policy adviser Brendan Sydes told AAP nature in Australia was in serious trouble and the priority should be protecting the habitats still left.
"A great deal of important wildlife habitat is on private land, so it makes sense for the government to help channel support for private land holders to preserve and protect biodiversity on their land," he said.
"Linking 'nature repair' so closely to the generation of offsets risks facilitating the destruction of more existing wildlife habitat.
"The top priority must be to protect important habitat. Otherwise, our kids and grandkids will not have the opportunity to see koalas, gang gang cockatoos and powerful owls in the wild."
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Ms Plibersek said multiple reports had shown Australia's environment was in a bad way and getting worse.
She said the proposed market would not replace government efforts to repair the environment, but enhance them.
"We need to begin to restore the places that we've damaged in the past (and) we need to start healing the land and the water," she told parliament.
"Just because something is difficult doesn't mean we shouldn't do it. It means we should put some thought into making sure we do it properly."
She said the market would help landowners earn extra income, allow companies to show their environmental credentials and help philanthropists achieve their social mission.
Australian Associated Press