Integrity issues of Australia’s carbon credits system undermine transparency, new report finds


Criticisms raised by a whistleblower who described Australia’s carbon credit system a fraud that is hurting the environment and wasted more than $1bn in taxpayer funding have been supported in a new report commissioned by the Albanese government.

Requested by the independent Chubb review, the study by the Australian Academy of Science examined strengths and limitations of four methods used to generate Australian carbon credit units by reducing or avoiding emissions.

Methods including human-induced regeneration (HIR), avoided deforestation, landfill gas, and carbon capture and storage all had flaws that could undermine investor and community confidence in credits, the academy’s report found.

One issue was whether the projects claiming the carbon cuts would continue without the awarded credits. The methods’ complexity and lack of transparency were other challenges.

For instance, farmers in inland New South Wales and Queensland were being paid for limiting land-clearing for pasture when rain was the biggest driver behind vegetation growth.

“Variable patterns in rainfall are the dominant drivers of fluctuations in woody biomass in these systems, with the proportion attributable to human activity small and variable,” the study found in its analysis of the single largest Australian carbon credit unit source at 28%.

“This triggers the ‘evidence based’ offset integrity standard, as it is not clear how changes in carbon sequestration in HIR projects can be convincingly differentiated between human and climatic changes.”

Prof Andrew Macintosh, the former head of the government’s Emissions Reduction Assurance Committee, had previously criticized the growing carbon market was “largely a sham” as most of the carbon credits approved did not represent real or new cuts in emissions.

The report findings “support our position that the carbon market has significant integrity problems that are in need of urgent attention,” Macintosh said.

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