April 13, 2024

Australia’s carbon credit system is a failure on a global scale, study finds | Climate crisis

Australia’s main carbon offsetting method is a failure on a global scale and does little or nothing to help tackle the climate crisis, according to a major new study.

Research by 11 academics concluded that the most popular technique used to create offsets in Australia, known as “human-induced regeneration” and which is intended to regenerate outback shrub forests, did not improve tree cover as promised between about 2015 and 2022.

The peer-reviewed study, published in the journal Nature Communications Earth & Environment, analyzed 182 projects in arid and semi-desert areas and found that forest cover barely grew or retreated by nearly 80%.

Academics said this meant these projects were therefore not reducing emissions as promised, and the polluting companies that purchased offsets created through these projects were often not reducing their impact on the climate as they claimed.

They said this was a globally significant problem as Australia’s forest regeneration method is the fifth largest nature-based offset program in the world, with projects covering almost 42 million hectares, an area larger than Japan.

More than 37 million carbon credits – each intended to be worth one tonne of CO2 extracted from the atmosphere and valued at between US$750 million and US$1 billion – were issued for these projects by June last year.

The study’s authors include Andrew Macintosh, professor of environmental law at the Australian National University (ANU), former head of a body ensuring the integrity of carbon credits and, more recently, an outspoken critic of the scheme’s management. Two years ago, he described it as a “scam” and a fraud on taxpayers and the environment.

Carbon offsets are used by the government and polluting companies as an alternative to cutting carbon dioxide emissions.

Instead of reducing their own pollution, they can choose to buy offsets – known as Australian carbon credit units (ACCUs) – that are meant to represent a reduction in emissions elsewhere.

Each carbon credit represents one tonne of carbon dioxide that has either been stopped from going in the atmosphere, or sucked out of it.

Methods approved to generate carbon credits in Australia include regenerating native forest that has been cleared, protecting a forest that would otherwise have been cleared (known as “avoided deforestation”) and capturing and using emissions that leak from landfill sites to generate electricity.

Credits were bought by the government through the $4.5bn taxpayer-funded emissions reduction scheme or, increasingly, by polluters on the private market. 

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Questions and answers

What are carbon credits?


Carbon offsets are used by the government and polluting companies as an alternative to reducing carbon dioxide emissions.

Instead of reducing their own pollution, they may choose to purchase offsets – known as Australian carbon credit units (ACCUs) – which are intended to represent a reduction in emissions elsewhere.

Each carbon credit represents one ton of carbon dioxide that was prevented from entering the atmosphere or was sucked out of it.

Approved methods for generating carbon credits in Australia include regenerating native forests that have been cleared, protecting a forest that would otherwise have been cleared (known as “avoided deforestation”), and capturing and using emissions that leak from landfills to generate electricity.

The credits were purchased by the government through the $4.5 billion taxpayer-funded emissions reduction scheme, or, increasingly, by polluters in the private market.

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The researchers said the findings contribute to a growing scientific literature that has highlighted “the practical limitations of offsets and the potential of offset schemes for credit reduction that is non-existent, non-additional and potentially impermanent.”

Megan Evans, senior lecturer in environmental policy at the University of New South Wales in Canberra and co-author of the new study, said the researchers found there was “nowhere near the forest cover you should see” given the amount of carbon credits emitted. .

“What this means is that the projects are not actually sequestering the amount of carbon claimed and we have a bunch of carbon credits in the system that don’t represent a ton of CO2,” she said.

“Most of these credits are being used to compensate large emitters under the safeguard mechanism, so we are not actually reducing carbon emissions. The overall result is that we are increasing the amount of carbon pollution.

“Ultimately, we are getting worse outcomes for the climate than if we didn’t have these [forest regeneration] projects.”

The researchers called on the Australian government to stop issuing carbon credits for regeneration projects in non-deforested areas “for the sake of the integrity of Australia’s carbon market and the country’s decarbonization efforts.”

The Clean Energy Regulator, which administers the scheme, said it has confidence in the integrity of the carbon credits scheme and the human-induced regeneration method. “Multiple analyzes have confirmed the integrity of the HIR method,” said a spokesperson.

Climate change minister Chris Bowen told the ABC’s RN Breakfast on Wednesday that a review of the carbon credits scheme he commissioned from Ian Chubb, a former Australian chief scientist, supported the integrity of the system.

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Bowen said Chubb found the scheme to be “basically sound” but needed some reforms which were being implemented. The Chubb review was not asked to examine individual projects.

Bowen said the regulator also asked Cris Brack, an ANU honorary associate professor and forestry researcher, to review the performance of five-year projects and found they were “demonstrating regeneration and proponents are implementing project activities”.

“Further checks were carried out regarding the significant increase in vegetation we were looking for and it was found that there is an increase in vegetation,” Bowen said.

Carbon credits generated through forest regeneration can be used by companies to meet emissions reduction targets under the safeguard mechanism, a Coalition policy renewed under the Labor Party to require that the country’s 215 largest polluting industrial facilities reduce the intensity of their emissions by up to 4.9% per year.

The projects analyzed in the new paper are mainly in dry areas of inland Queensland, New South Wales and Western Australia. They do not involve the planting of trees, but are supposed to regenerate native forests, reducing the impact of livestock and wildlife grazing.

Critics, who include the Australian Conservation Foundation, say research suggests that grazing by livestock and wildlife mostly does not affect “woody vegetation cover”. The study stated that the total amount of woody vegetation cover in the areas analyzed increased by less than 1% after grazing was reduced.

The researchers examined 75 projects that they said, based on the number of credits received, should have nearly 100% forest coverage, but found that the actual coverage in 2022 was just 21%. This was an increase of just 1.8% since the projects were registered, they said.

Don Butler, an ANU ecologist who led the statistical analysis, said the changes largely reflected what happened in nearby areas not included in the projects.

David Eldridge, another co-author and long-time NSW government scientist now at the University of NSW’s Center for Ecosystem Science, said the study’s results were not a surprise. “They align perfectly with what decades of research in Australia’s grasslands suggests would occur,” he said.

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