Survey winner must fix the carbon market: report


Whichever party wins the federal election has been urged to review the carbon market. -AAP Picture

The next federal government has been urged to review the carbon market as experts question the integrity of credits used by companies to balance their emissions accounts.

A research report, launched by an independent think tank at an energy expo on Thursday, outlines the risks of relying on the $4.5 billion Emissions Reduction Fund as a shortcut to targets net zero.

Carbon credits have a role to play in reducing emissions in truly hard-to-cut areas of the economy, such as agriculture, steel and cement, according to Ben Oquist, director of the Australia Institute.

“But dodgy credits used as offsets are actually a license to pollute, fueling climate change,” he said.

The report finds that the bosses of fossil fuels and carbon production have too much influence over what gets approved.

The Australia Institute calls for an independent review of the governance and integrity of the voluntary carbon market, and how the agreements work with other climate policy levers.

Labor has pledged to conduct a review, if elected, following claims in March by the former chairman of the Federal Emissions Reductions Assurance Committee, Andrew Macintosh, that credits Australian carbon mongers are an “environmental fraud”.

Professor Macintosh’s findings revealed that up to 80% of the units do not represent new or real reductions, and that the main methods of reducing emissions are flawed in their design or the way they are administered.

The clean energy regulator is abiding by the agreements and working closely with the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission, which will act against companies touting bogus carbon products.

Energy Minister Angus Taylor said he wanted “the widest possible source of credits under the ERF” to include as many technologies as possible to reduce emissions.

State governments are also supporting FER and expanding carbon farming.

But the Australian Institute says the tool was never designed to carry the full weight of Australia’s climate policy and is “collapsing under the strain”.

“Given the growing national and international attention to greenwashing, companies face reputational, financial and legal risks for failing to meet their climate change commitments,” the report said.

Skipp Williamson, chief executive of consultancy Partners in Performance, said the use of carbon credits has often been criticized as a way for companies to demonstrate “green credentials” without changing their business model.

“Although many companies have purchased carbon credits in good faith, it is time to question the impact of these programs,” she said.


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