Three questions will determine whether the Albanian government’s major climate announcement this week can deliver the transformative change Australia needs.

The details can be daunting, but a quick recap for those still enjoying a summer vacation: On Monday, the climate change minister, chris bowens, published a review of Australia’s carbon credit system. He followed experts’ claims that the scheme is “largely a sham” as it failed to achieve real reductions in greenhouse gas emissions.

Companies buy carbon credits as an alternative to reducing their direct emissions and they are counted as their own cuts. Each credit is said to be equivalent to one ton of carbon dioxide.

In Australia, credits have been created primarily through three types of projects: regenerating native forests, stopping emissions leaks from landfills, and “avoided deforestation,” which rewards landowners who agree not to clear forests they they could have.

The review panel, led by former chief scientist Prof. Ian Chubb, did not accept allegations that the accreditation system lacked integrity, finding that the methods used met standards and there was evidence that the system is reducing emissions. . But the panel recommended a series of improvements similar to those endorsed by the scheme’s most qualified critic, Professor Andrew Macintosh, longtime head of the government’s emissions integrity committee.

On Tuesday, Bowen unveiled his plan to revamp the backstop, a Coalition policy that promised to limit emissions from major industrial sites that contribute nearly 30% of the nation’s carbon pollution. In practice, it has been largely useless. Large emitters have often been allowed to increase their pollution without penalty.

Bowen said Labor would make changes that the Coalition noted but never introduced. Starting in July, there will be new production-based emissions caps for each of the 215 largest polluting facilities (think coal mines, gas exporters, steel mills, aluminum smelters, fertilizer manufacturers, and airlines), which will be reduced by 4.9% per year.

It is the most important climate policy that the government has promised this period. Its success will depend on whether it drives real emission reductions and encourages big industry to adopt cleaner technologies. It will fail if there are too many exceptions and loopholes, or if politics breaks out (again) in a way that sets the country back.

Bowen pledged $600 million from a new “jumping the regions” fund to help some export industries adopt new technologies. He has also said that companies can use as many carbon credits as they want to meet their goals. Put another way, companies can make their own decision about what makes sense: invest in direct cuts or shell out offsets.

It means that the national carbon credit system is about to play a central role in Australia’s climate response. The evidence suggests that giving it so much weight is problematic. What happens from here will determine how troublesome.

The Chubb review’s recommendations for changes to the scheme received support from Bowen, industry and some of the scheme’s sharpest critics. They include not approving new avoided deforestation projects; ensure that there is evidence that forest regeneration projects are actually generating forest cover; and tightening the rules for landfill gas developments.

The panel also called for the creation of a new independent committee to oversee integrity and, most importantly, for more data to be made publicly available, including audits of individual projects. If managed well, these changes can address many of the criticisms that have been leveled at future approved projects.

But there remains a big disagreement between Chubb and critics of the scheme about the millions of credits that will continue to be created over the next decade by projects already in operation. This remains unresolved in part because the review was not asked to look at the integrity of individual projects and did not directly address damaging allegations from the Macintosh team, for example, claims that landowners have received credits for cultivating forests in areas where there was already significant tree cover and, in some cases, where tree cover has greatly diminished.

Questions and answers

What specifically do Macintosh and his colleagues alleviate?


  • Credits are routinely issued for tree growth that would have occurred anyway. The method is based on the assumption that cattle grazing significantly reduces tree growth and forest cover, but scientific evidence shows this to be incorrect.
  • Tree growing credits are being issued despite the fact that in many cases there were already mature trees when the projects began. The rules require that areas with mature trees be excluded.
  • Landfill projects that receive carbon credits for capturing and burning methane to generate electricity are already profitable (they make money selling the electricity and receiving and selling renewable energy certificates) and therefore should not qualify. The Macintosh Integrity Committee recommended in 2018 that these projects no longer receive credit. Instead, the government created a new method that gives landfill projects a five-year extension.
  • The credits are issued based on an erroneous assumption that any owner in western NSW with a clearing permit issued between 2005 and 2010 planned to use it within 15 years. This would have required the rate of clearing to increase by at least 750%. It means that credits are being given to farmers for not clearing land that would never have been cleared in that time period.

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Given the nation’s largest credit generator, GreenCollar, agreed with Macintosh that the model used to estimate how much carbon is stored in regenerating forests has not been calibrated for areas that already have significant amounts of vegetationit seems logical that the government would support a transparent review of existing projects, if only to build public confidence.

There is also a broader problem: the question of how much Australia should depend on carbon credits.

The reality is that carbon credits do not, and cannot, do everything that is promised in their name. People who work in the area talk about the “80/20” rule. He says that even for high-integrity credits, a general rule of thumb is that only about 80% of claimed haircuts are delivered.

This is not to say that credit-creating projects are not important. But it does mean that they are not the same as stopping the emission of a ton of carbon dioxide at the source. It is not equal to equal.

Bill Hare, a climate scientist, points to evidence that a ton of carbon dioxide released from burning fossil fuels has “a very long tail” in the atmosphere. About 40% of each released ton is still there after a century and 20% remains after 10,000 years. Storing more carbon in trees and across the landscape is vital, but it cannot be guaranteed to last as long or be measured with the same precision.

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The scientists emphasize that we must also take into account the urgency of the climate crisis. The evidence is clear that emissions must be reduced rapidly Y we need to absorb carbon dioxide from the atmosphere if we want the world to keep alive the possibility of limiting global warming to a level close to a safe level. A UN expert report late last year argued that companies should use offsets only on top of outright cuts consistent with the goal of limiting average warming to 1.5C.

This is more difficult for some industries than others, but it shows that the use of credit within the safeguard mechanism must have limits.

The other factors that will determine whether the government succeeds are no less important, but can be dealt with more quickly.

One is the main question of how many new fossil fuel developments, in particular the massive gas export projects that have driven most of the rise in industrial emissions over the past decade, will still be built in Australia.

Allowing new fossil fuel development goes against scientific warnings and will add pressure on existing polluters to cut deeper and faster if the government wants to meet its emissions targets. The government has ruled out a ban on new fossil fuels for political reasons. What is not clear is to what extent the design of the backstop will be a strong deterrent to fossil fuel companies.

The government says emissions baselines for new polluters entering the scheme will be set to “international best practice”, which implies a more stringent cap than for existing operators.

Another issue is how exporters will be treated. The government wants to make sure they don’t just cut local production while foreign competitors continue to pollute.

Bowen has pointed to subsidies to help pay for transformative technology and said some industries may initially be approved to cut emissions at a slower rate, but warned it will be difficult to qualify.

Case-by-case details, and any deals negotiated in the Senate, where the government needs to get support for some changes to the scheme, will be key.

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