A review into an Australian Government system designed to limit carbon emissions was handed down yesterday. It focused on Australia’s ‘carbon credit’ system.
It was commissioned to ensure the system is functioning at a high level to mitigate climate change.
Before we look at the review, let’s look at what a carbon credit actually is.
First, the background
Many nations have set carbon emission goals in recent years to curb climate change. A common goal set by countries, including Australia, is to achieve net-zero carbon emissions by 2050.
That means that by 2050, these countries want to be taking out as many greenhouse gas emissions from the atmosphere as they are creating.
Multi-decade strategies have been put in place to achieve these goals. Carbon credits are one of those strategies.
What are carbon credits?
Carbon credits are a permit that allows companies to emit a certain amount of greenhouse gases. This amount gradually reduces over time to encourage companies to incrementally decrease their emissions, which would fall in line with government climate goals.
The Australian Government uses carbon credits, called Australian Carbon Credit Units (ACCUs), to limit emissions.
Companies in Australia can purchase carbon credits from other companies if they produce too many emissions. If companies produce excess emissions above their allocated carbon credits, they could be subject to penalties and court proceedings.
Reviewing the system
In July, the newly-elected Federal Government announced that an independent review into the integrity of ACCUs would take place.
It came after Andrew Macintosh, a former employee who worked closely with the Government’s carbon credits program, claimed in March last year the system was “a fraud on the environment [and] a fraud on taxpayers”.
The review was established to assess the scheme’s credibility and provide recommendations to improve the system.
What did it find?
The review disagreed with Macintosh’s claims, saying the ACCU scheme is “essentially sound” and was “fundamentally well-designed when introduced”.
However, it made 16 recommendations to update and improve the scheme.
These measures targeted improving transparency and accessibility in the carbon credits scheme, and recommended that more ACCU data be made available to the public.
Climate Change Minister Chris Bowen said the Government had accepted all 16 recommendations from the report in principle. He said the report would help ensure the scheme “has the highest integrity”.
In a statement, Shadow Climate Change Minister Ted O’Brien said the Coalition welcomed the review, saying its outcome should give Australians “supreme confidence” in the ACCU program.
Macintosh told SBS he was “disappointed and really confused” with the report’s findings.
“What they’ve essentially said is that there’s a need for quite sweeping reforms, yet there’s nothing really wrong with the carbon credits that are being generated.”