Transparency and Integrity in the Australian Carbon Market

We have been keenly awaiting the Chubb review of the Australian carbon market credits scheme, administered by the Emissions Reduction Fund, and finally, we have it. The review findings conclude that the scheme does not lack integrity whilst making recommendations to improve its integrity and transparency.

The Chubb review stemmed from a report from insiders, such as Andrew Macintosh (former head of the Australian government Emissions Reduction Assurance Committee), that the scheme has been a “rort” due to lack of additionality and that it has lacked integrity. These criticisms damage the offset market and, to some extent, may have stopped some organisations from taking offsetting action. At Carbon Positive Australia, we believe the Chubb review was needed, and we wish it had also called out for genuine “emissions reduction”.

Carbon Emissions Reduction

Setting reduction targets is essential, but these targets must be met quickly. Emission reductions by 2050 will not be soon enough, particularly if organisations and governments continue to increase emissions in the short term and use “offsets” as a get-out-of-jail-free card. The only real solution to the climate crisis is cutting our emissions.

Where offsets are genuinely required, and we still believe there is a place for them, they need to create the most possible “good”. By that, we mean they should be sequestering carbon and have a range of co-benefits that increase their utility. Within the reforestation sector, in particular, carbon capture should benefit biodiversity outcomes, soil health, and water at a minimum. We will be advocating for Nature Positive planting schemes.

We know that carbon offsetting should be a tool that goes alongside reduction strategies and NOT be an alternative, and offsetting should be for unavoidable emissions. Good offset projects should always be additional, meaning they give more significant environmental benefits (and social benefits) and are more than just carbon reduction. Good carbon projects would not happen through the course of business as usual.  

Chubb has some recommendations for increasing transparency, particularly around the carbon estimation areas, and recommends that full details about a project and its expected outcomes be available on a national platform to share this information.

What 9 components does a great reforestation carbon project have?

We believe that a good reforestation carbon project should have the following components:

  1. Additionality: At the top of the list should be additionality. Additionality means that the project will provide additional carbon abatement. The projects that Andrew Macintosh reviewed were often unable to provide this. A good carbon project is one where the nature-based solution would not be not available without the project taking place. So tree planting on previously cleared or degraded land that without trees would not naturally regenerate will provide additional abatement.
  2. Increasing biomass: Carbon is produced by increasing biomass. Nature-based solutions, therefore, must increase the available biomass. When tree planting, this means planting a canopy, mid-storey and understorey, and requires various tree species to be planted. Planting in this way increases root and soil biomass, as well as the biomass of the trees and vegetation.
  3. Biodiversity: With biodiversity, our world is healthy. A good tree-planting project will seek to increase the number and types of plant species. It will likely replicate as far as possible a restored ecosystem by planting tens and hundreds of different native and endemic species. This diversity helps provide conditions for many kinds of flora and fauna. Biodiversity is key to preventing species extinction.
  4. Habitat creation: Where possible, a project should seek to increase available habitats for flora and fauna. By connecting existing remnants and by planting multi-species vegetation, birds, insects, and mammals return. The ecosystem returns to health, and competition for land is reduced.
  5. Shade and shelter: The project should provide shade and shelter, which means that the canopy level needs to be reached by the planted trees. Canopy levels in metres can vary depending on the dominant species being planted.
  6. Monitoring: Projects need to be regularly monitored until the trees have reached canopy level. The monitoring exercise needs not just to record survival but also to consider stem density and species development. Monitoring also means that the project can infill plants in areas that aren’t thriving until the ecosystem can naturally regenerate.
  7. Measurement: The carbon abatement needs to be measured throughout the project’s lifetime to ensure that the amount of carbon being abated matches the emissions targeted.
  8. Protection: Tree planting projects need to be covenanted and protected legally to ensure that the trees being planted will not be removed in subsequent years, particularly if ownership of the land changes.
  9. Longevity: Project longevity and survival need to be factored into project costs. Carbon organisations must ensure their longevity so that the projects they begin are protected and maintained over many years.

Chubb Report Recommendations

The Chubb report recommends that avoided deforestation project credits be cancelled. These projects give credit for not cutting down existing forested areas, although we note that existing projects will remain.

The Albanese government has fully accepted the review recommendations. Still, those who called for the review are uncomfortable that Human Induced Regeneration methods (HIR) have not been removed from the scheme. 

Mr Macintosh, quoted by ABC, said that “while he and others did not want to see the scheme ‘torn down’, he hoped that pressure from within and outside the industry would lead to reforms”.

Chubb also calls for oversight by independent bodies for some areas of the current compliance and enforcement roles undertaken by the Clean Energy Regulator. We await to see the details of this. There are also recommendations for the revision of the landfill crediting mechanism.

We can all agree that what is best for our climate and as Australians is a scheme that gives us confidence that we are genuinely reducing our emissions as a nation. The scheme must be transparent and highlight the benefits of good projects. The Chubb review provides us with a step in the right direction. Still, the work is not over, and Carbon Positive Australia, alongside other climate organisations, will continue to push government, industry and our regulators towards highly transparent offsets and genuine emissions reduction.

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