The head of a review of Australia’s carbon credit system says polluters must make deep cuts in their own greenhouse gas emissions and not rely heavily on offsets – paying for emission cuts elsewhere – if the climate crisis is to be addressed.
Prof Ian Chubb, a former chief scientist who headed the Albanese government’s review of the carbon credit scheme, said he backed a UN expert group recommendation that companies should prioritise absolute emissions cuts consistent with the goal of limiting global heating to 1.5C, and offsets should be used only “above and beyond” that.
“I do agree with that position,” he said. “I don’t think a good outcome for Australia would be that there is no change in emitters’ behaviour and they just buy up offsets from somewhere.”
The use of carbon credits is central to a government plan to revamp the safeguard mechanism – a Coalition policy introduced under Tony Abbott – and use it to cut emissions from major industrial sites.
The climate change minister, Chris Bowen, released a paper on Tuesday that proposed changes that would require most big emitting facilities to reduce pollution by 4.9% a year, but allowed unlimited use of credits to meet targets.
Carbon credits allow companies and governments to pay for cuts elsewhere instead of reducing their own pollution. One credit is said to represent one tonne of carbon dioxide removed from the atmosphere or avoided.
Environmental policy experts have generally supported the use of high integrity carbon credits to offset some emissions, particularly those that are difficult or expensive to clean up, but have warned storing carbon in trees is not the same as cutting fossil fuel emissions at the source. Part of each tonne of emissions from burning coal, oil or gas survives in the atmosphere for thousands of years.
Bill Hare, a climate scientist and member of the UN’s high-level expert group on the net zero emissions commitments of non-state entities, last year said Australia risked becoming “a state sponsoring greenwashing” if it allowed companies to use offsets without tighter restrictions.
The Chubb review this week backed the integrity of the Australian carbon credit system, and did not accept allegations from academics led by Prof Andrew Macintosh – a former head of the government’s emissions integrity committee – that the scheme has mostly not delivered real cuts in emissions. But the review panel recommended significant changes, including the creation of a new independent integrity committee and that the government not accept new “avoided deforestation” projects.
Chubb said the urgency of the climate problem meant emissions must be “reduced or eliminated wherever they can be”, and that absolute pollution cuts and offsets should not be seen as alternatives, but as complementary strategies to moderate global heating. The review panel was not asked to consider whether there should be limits on offset use.
The Greens and climate campaigners have called on the government to limit carbon credit use in its redesign of the safeguard mechanism, but the Senate crossbench has largely withheld any public criticism until they have a fuller understanding of what is planned.
Bowen said most of the proposed changes, which includes an initial $600m in funding to help trade-exposed industries adopt cleaner technology, can be made through regulation and do not require legislation.
The exception is a new mechanism that would create a new type of “safeguard credits”. Companies that emit less than their government-imposed emissions baseline would receive safeguard credits and could sell them to businesses that miss their targets, creating a further incentive to cut pollution.
If the changes are opposed by the Coalition – which backed introducing a safeguard crediting mechanism while in power, but on Tuesday described Labor’s proposed changes as “a killer” – the government will need the support of the Greens and at least one other senator to introduce its plan. The independent senator David Pocock was still to be briefed on the safeguard mechanism on Wednesday and was not commenting, but his concerns were believed to be similar to the Greens.
The minor party wants limits on credits and believes a proposed $75-a-tonne starting cap on the price of carbon credits is too low to ensure direct cuts. Its acting leader, Mehreen Faruqi, said there was also nothing stopping new coal or gas projects from being approved and relying on offsets to meet targets.
“The Greens want an ambitious package that is guaranteed to make real and deep emissions cuts, not unlimited trade-offs,” she said.
But Faruqi said she welcomed that the government had promised to consult further. “We intend to continue working with them in good faith,” she said.
