ANU says flaws with Australia’s carbon offset scheme “irrefutable” as Coalition appointees resign

Leading experts have doubled down on their call for Australia’s government-backed carbon offset regime to be overhauled, saying the flaw are “irrefutable” as it emerged that three Coalition appointees had resigned from a key oversight committee at the request of the new government.

Issues about Australia’s national carbon offset scheme – the Emissions Reduction Fund – were first raised by professor Andrew Macintosh, who chaired on the Emissions Reduction Assurance Committee (ERAC) for more than six years under the Coalition government.

His claims however, were rejected by the current committee. But three appointees – the controversial Coalition aligned energy market modeller Brian Fisher, former fossil fuel industry lobbyist and committee chair David Byers – and cement industry representative Margie Thomson, all resigned from the watchdog.

RenewEconomy has been informed that all three resigned at the request of Labor’s climate and energy minister Chris Bowen.

ANU researchers, led by professor Macintosh, have published a fresh critique of the most popular carbon offset methodology used by the Emissions Reduction Fund – the Human-Induced Regeneration method – which awards offsets for changes in agricultural practices that purport to support regeneration of native forests.

The ANU researchers say the methodology contains “numerous flaws” relating to the measurement of emissions reductions using the methodology, as question whether it achieves any ‘additionality’ – additional emissions reductions above business-as-usual.

The papers detail a range of flaws in the modelling approach used by the Clean Energy Regulator to credit projects for claimed offsets, including that it allows projects to claim offsets for emissions absorbed by ‘mature’ trees that may have pre-dated the project.

In particular, the research papers challenge the notion that agricultural activities – primarily sheep and cattle grazing – have any lasting impact on vegetation cover, suggesting that variation in vegetation is primarily driven by available rainfall.

“Where trees are actually growing in the carbon estimation areas, they would have grown anyway because rainfall, not grazing, is the primary determinant of the prevalence of trees and shrubs in uncleared rangeland areas,” the researchers say.

“Never in the 30 years of this debate has there been any material evidence or support for the notion that grazing alone (in the absence of clearing) has significantly reduced tree and shrub cover over vast areas of the rangelands; as would be necessary to justify the current gross misapplication of the HIR method,” the researchers say.

“In certain circumstances, grazing pressure can materially reduce tree and shrub cover, including in regenerating vegetation following from clearing. However, cases where grazing transforms woody vegetation without prior clearing are exceptions, not the rule.”

If the researchers’ claim is correct, it would suggest the ‘Human-Induced Regeneration method’ has little actual influence on vegetation levels and the amount of carbon absorbed, undermining the legitimacy of carbon offsets issued to projects purporting to apply the methodology.

An additional flaw, according to the researchers, is the practice of issuing carbon offsets on the basis of modelling rather than more direct measurement of the amount of carbon dioxide absorbed by vegetation.

Offset projects have been allowed to include pre-existing, ‘mature’, vegetation in their offset calculations, leading to an overestimation of the carbon removals attributable to any changes in agricultural practices.

Macintosh raised the substantial concerns about the environmental integrity of the carbon offsets issued under the Emissions Reduction Fund earlier this year, after turning whistle-blower.

More than half of all offsets that have contracts under the Emissions Reduction Fund have used the Human-Induced Regeneration method, which has been used to issue around 30 per cent of all Australian Carbon Credit Units issued by the Clean Energy Regulator.

The claims have been repeatedly dismissed as being unfounded by both the Clean Energy Regulator, which administers the Emissions Reduction Fund, and the current ERAC body, both denying that there are issues with the carbon offset methodologies.

But Macintosh says the “substantial problems with the method is irrefutable”. They are now expected investigated as part of a broader review of the scheme instigated by the new Labor government.

“The Australian public deserves an explanation for how this method has been allowed to stand when there are such manifest integrity problems, and why proponents have been credited for tree growth that has not occurred,” the research paper says.

“The CER/ERAC defence of the HIR method is deeply flawed and well below the standard that should be expected of government agencies that are responsible for the oversight of a financial market,” the researchers say.

“It is time for both the CER and ERAC to concede that the HIR method has been misapplied and that this has resulted in significant over-crediting, and to start working constructively on solutions.”

The review of the Emissions Reduction Fund will be led by former chief scientist Ian Chubb and will deliver its recommendations to the government before the end of the year.