The Australian carbon credit scheme is under the microscope again thanks to a new report issued by academics. A new analysis by six academics, including the former carbon credit system integrity chair Prof Andrew Macintosh, has been presented to a review of the system commissioned by the climate change minister, Chris Bowen.
The Australian carbon market was created in 2012 and is overseen by the Clean Energy Regulator which issues Australian carbon credit units (ACCUs) to registered projects as part of the Australian Government’s Emissions Reduction Fund (ERF).
Once eligible projects obtain the units, they have their golden ticket to participate in the carbon credits trading arena. The credits can be sold to the government or polluting businesses that use them to offset their greenhouse gas emissions.
The carbon market is the Australian government’s initiative that backs emissions reductions across the country by purchasing the Australian carbon credit units from businesses via the Emissions Reduction Fund (ERF).
Prof Andrew Macintosh is an environmental law and policy professor at the Australian National University and a former head of the government’s Emissions Reduction Assurance Committee – the committee established to assess the compliance of emissions reduction methods to ensure they comply with the Offsets Integrity Standards.
He has previously described the Australian carbon credit system as a “sham” and a fraud on taxpayers and the environment. According to him, the newly published analysis found compelling evidence of widespread problems with forest regeneration projects that had been awarded carbon credits. Forest regeneration is one of the most funded methods as part of the Australian carbon credits system.
The report states that in nearly all cases tree growth followed the same rainfall-driven pattern in both managed carbon credit project areas and in neighbouring areas that had not been managed to capture carbon dioxide.
The team examined 169 projects that received about 24 million credits between 2015 and 2021. 92 projects in NSW received 13.6 million carbon credits, but the combined area of forest and sparse woody vegetation cover in the affected areas was more than 10,000 hectares less than when the projects were first registered.
In Queensland, 73 projects were found to have received 9.9 million carbon credits while forest cover went backwards by more than 50,000 hectares.
Macintosh claims that the analysis should prompt “some soul searching within the commonwealth government”. According to him, the responsibility mostly sat with the Clean Energy Regulator, which administers the scheme.
“The way in which it has occurred and been allowed to continue to raise material questions about the Australian government’s capacity to operate schemes of this nature,” says Mr. Macintosh.
Finds Meet Oposition
The claims in the analysis were disputed by some companies that manage nature-based projects to store carbon in vegetation.
Climate Friendly – a profit-for-purpose carbon farming project services provider, that has a target of delivering 100 million tonnes of emissions abatement by 2025, argues against the critics. It says it has “a large volume of data” that shows older projects had increased forest cover once grazing practices were changed. It adds it expected satellite data would show forest cover had started to increase on more recent project sites this year.
GreenCollar – one of Australia’s largest environmental markets investors, claims it disagreed with Macintosh on several points, but agreed that the scheme needed to be overhauled to improve measurement of how much carbon dioxide was being drawn from the atmosphere and to improve the governance of the system overseen by the Clean Energy Regulator.
Are Carbon Credits Worthwhile?
Other reports are going even beyond Macintosh’s arguments. A recent report by the Australia Institute – a progressive thinktank, cited expert opinion that offsetting emissions should be a last resort, used only in hard-to-abate sectors, and should not be available to all polluters.
Normally, about 40% of carbon dioxide emissions would survive after a century and 20% after 10,000 years. Yet, the Australian scheme considers carbon credits a permanent reduction in emissions if they last between 25 and 100 years, depending on the project which is in contrast with the reality of their impact. Some scientists say carbon credits need to be permanent and safe to be worthwhile.
“If they’re not real, additional and permanent – or if they’re used to continue fossil fuel emissions – then they will make climate change worse rather than better,” says Bill Hare, a climate scientist and the chief executive of Climate Analytics.
The Australian carbon credit scheme is a use case showing how mismanagement of carbon offsets can undermine the whole validity of carbon credit schemes on a national level. If taxpayers’ money is not used accordingly to incur actual emissions reductions, the whole government scheme could be pointless.