There are questions over the government’s review of Australian Carbon Credit Units (ACCUs) after a member of the review panel discussed the “potential” for investment in ACCUs by an infrastructure fund she is linked to.
In July the government announced a review of ACCUs in the wake of a whistleblower, ANU professor Andrew Macintosh, revealing significant problems with credits generated by the Coalition’s Emissions Reduction Fund. Up to 80% of ACCUs generated by the scheme may be worthless in terms of actual additional emissions abated under the ERF — a claim rejected at the time by the Clean Energy Regulator that oversees the ERF.
The government will be relying on ACCUs and a new class of carbon credits created under its revamped safeguards mechanism as part of its emissions reduction plans.
The review is headed by Professor Ian Chubb, with former Federal Court judge the Hon Dr Annabelle Bennett, Ariadne Gorring and Steve Hatfield-Dodds on the panel. The review is scheduled to report by the end of the year. The Australia Institute has previously raised concerns about the potential appearance of conflict of interest in the part of Gorring and Hatfield-Dodds.
Bennett is also chair of the trustee company Gardior, which is trustee of The Infrastructure Fund (TIF), a $2.5 billion Brisbane-based infrastructure investment fund that amongst other assets holds 50% of the Port of Newcastle as well as stakes in the Gold Coast and Perth airports. TIF is managed by Macquarie Group’s Macquarie Infrastructure and Real Assets (MIRA).
On October 31, Macquarie invited TIF investors to an investor day at Gold Coast Airport, where Bennett and three other Gardior directors spoke to investors.
According to a statutory declaration tabled in Parliament by ACT senator David Pocock on November 7, an unidentified TIF investor says Bennett, after opening remarks, unsolicited, spoke about “the potential for ACCUs across the TIF portfolio” and noted she was a member of the Chubb review panel.
An attendee asked Bennett about the integrity issues around ACCUs. According to the statutory declaration, Bennett replied with words to the effect that the review was a result of concerns about integrity, that a group of academics had made allegations and that the review would report by the end of the year.
If correct, Bennett’s reported remarks suggesting the “potential” for ACCUs (which might also appear to be an unusual investment for an infrastructure fund) appear incongruous with the Chubb review’s remit to “review the integrity of Australian Carbon Credit Units (ACCUs) under the Emissions Reduction Fund.”
A finding that ACCUs issued as a result of ERF activities have fundamental problems might result in their being withdrawn, which would push the ACCU price up significantly as a result of dramatically reduced supply.
Crikey invited Bennett to respond to the statutory declaration via the Chubb review secretariat, including asking her to confirm if the declaration was correct. The secretariat responded, “Dr Bennett participated in a director panel discussion where the purpose was to introduce the directors, and to outline briefly what they do”.
The review team also pointed out that “a robust probity framework has been put in place for the review. Each panel member has signed a number of probity forms, including confidentiality and conflict of interest declarations, and are each intimately aware of the importance of integrity and transparency whilst conducting the work of the review.”
Senator Pocock told Crikey: “Integrity in our carbon markets is absolutely crucial. Given some of the concerns that have been raised with a number of ACCU methods, the government’s review led by Professor Chubb is critical. The matters raised in the statutory declaration merit further investigation as they are potentially concerning.
“If we cannot trust that our carbon market is achieving genuine and additional abatement, claims of net reductions in emissions risk becoming meaningless.”
