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BY
Seneca ESG
- January 11, 2023
A six-month review of Australia’s controversial carbon credit system dismissed claims that the system lacks integrity and is unable to achieve real cuts in greenhouse gas (GHG) emissions, as reported by Reuters on January 9. The review panel, led by the country’s former chief scientist Ian Chubb, concluded that the scheme was “essentially sound” and “fundamentally well-designed” when launched in 2011. The panel also put forward 16 recommendations to improve the scheme, including separation of regulatory and reporting roles, the removal of new projects that rely on flawed methods to avoid deforestation, and stricter disclosure regulations on “human-induced regeneration” methods. The Australian government has accepted in principle the 16 suggestions and would implement some changes immediately.
Australia’s Labor government initiated a review of the carbon credit system in July 2022 to evaluate whether the system could help the country reach its goal of reducing greenhouse gas emissions by 43% by 2030, compared to 2005 levels. Under the system, projects that use government-approved methods to store or avoid GHG emissions can earn carbon credits, which can be sold to the government or polluting businesses that seek to offset their emissions. Some critics doubted that carbon credits can be obtained using flaws of the system and cannot represent new or real cuts in emissions. For instance, some human-induced regeneration projects had received carbon credits for forest regeneration that has not actually occurred, or for regeneration that would have occurred naturally due to rainfall. The Chubb-led review panel has called for actions to ensure all project meet the intended criteria – that the project areas become native forest that permanently store carbon dioxide.
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