Clean Energy Regulator chair David Parker has conceded there is "no absolute truth" when figuring out how much should be paid to businesses for reducing net emissions by various methods.
"There is room for reasonable people to disagree about that, and there is no absolute truth here," he told senators on Thursday.
Mr Parker acknowledged recent accusations by former insider Professor Andrew Macintosh, who has published a serious of academic papers that found carbon credit arrangements are "environmental and taxpayer fraud".
"He's taken a different view and we have engaged with him substantially about that over a long period of time," Mr Parker said at a senate estimates hearing.
Professor Macintosh has called for an inquiry into the key mechanism the government is using to achieve net zero emissions by 2050.
Mr Parker said it would take time to work through the research papers issued last week by the professor, but insisted checks and balances are built into the system.
Making sure abatement isn't wrongly credited is at the heart of many disagreements, he said.
"We welcome scrutiny because we're confident in our work."
But offset issues are "inherently complicated" and the modelling and statistical analysis is very complex, he said.
"The difficulty for us as human beings is that we can't predict the future precisely."
The legislation has a so-called "additionality requirement", which is intended to ensure that activities earning Australian Carbon Credit Units (ACCUs) to reduce emissions or sequester carbon would not have happened in the normal course of events.
Mr Parker said if the rules are too tight, there will be no additional abatement under the scheme, and if the settings are too loose then there's the potential for abatement to be credited that would otherwise have occurred.
"That trade-off has been analysed over many many years."
