Review of carbon credits scheme rejects criticism that it is flawed and recommends changes to improve transparency

An independent review of the government’s carbon credits scheme has rejected suggestions that it is fundamentally flawed, but has made a number of recommendations to improve its transparency and integrity.

The scheme works by awarding a carbon credit, officially called the Australian Carbon Credit Unit (ACCU) for every tonne of greenhouse gases avoided or stored by registered projects.

These credits are purchased by the government and serve to meet emissions reduction targets, but a growing number are sold on a private market to companies that want to offset their own emissions.

A number of criticisms of the scheme were leveled last year, including by former industry members who claimed it had become a “rort” and some industry players who argued that the rules did not incentivize any further emissions reductions.

The review panel, chaired by former chief scientist Ian Chubb, noted that the integrity of the scheme had been called into question.

“It has been argued that the level of reduction has been exaggerated, that the ACCUs are therefore not what they should be, so that the policy is not effective,” the report says.

“The Panel does not share this opinion.

“Despite the criticisms leveled, the Panel concludes that the ACCU scheme was fundamentally well designed when it was introduced.”

Chris Bowen in a blue suit and tie in mid-sentence, gesturing with his right hand in front of a blue curtain.
Chris Bowen says the government has accepted all the recommendations in principle.(ABC News: Reading Ed)

The report argues that one reason for the conflicting views is due to a lack of transparency around data in the scheme and decisions to grant credit.

It recommended that “the default should be for data to be made public, including carbon estimation areas” and that the government should consider a national platform for sharing this information.

“More transparent data and information sharing arrangements would enable communities and carbon market stakeholders to assess, understand and manage potential project impacts and opportunities more effectively,” he said.

Climate Change Minister Chris Bowen welcomed the report, saying the government had accepted all of its recommendations in principle.

“This panel has not tried to please everyone,” he said.

“There will be some people who will say that this panel has gone too far, there will be some people who will say that it has not gone far enough. That is understood.

“But it is substantial work. It is informed by the best science and the best evidence.”

Landfill Gas Changes

In addition to recommendations to improve transparency and, as a result, integrity in the scheme, the report also made more specific recommendations on different carbon reduction techniques that qualify for credits.

One is for companies that convert the gas created by garbage in landfills, methane, into a source of electricity.

At the moment, credits are given to companies based on how much methane they remove from the atmosphere above their “baseline,” which is typically 30 percent.

But some of the industry heavyweights have publicly argued that the current system rewards companies for taking steps they would have done anyway and that less credit should be given.

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