Remove Low Integrity Carbon Credits from Safeguard Mechanism: Australia Institute

“Professor Ian Chubb’s review of the way that carbon credits are issued in Australia will add to the confusion about the role, integrity and future of carbon credits in Australian climate policy,” said Dr Richard Denniss, Executive Director of the Australia Institute.

“Unfortunately, Professor Chubb’s review is silent about the most important issues facing our Parliament and our climate, namely how many dodgy carbon credits are still circulating in the Australian economy and how can we recognise them?

“Carbon credits will be central to the Albanese Government’s Safeguard Mechanism, which it hopes to legislate in the coming months. Without so much as an estimate of how many dodgy carbon credits are currently circulating in the economy from this review, it seems the safest way to proceed is to prevent the use of Australian Carbon Credit Units (ACCUs) in the government’s new scheme.

“Fossil fuel producers dominate the Safeguard Mechanism. Gas producers who plan on increasing their production and emissions will be buying millions of ACCUs every year to meet their obligations under the Safeguard Mechanism. Australians cannot be confident that what they’re buying isn’t junk.”

“The dangers of climate change are just too high to take a risk on climate policies that rely on dodgy carbon credits. Allowing new coal mines and gas wells to open because they bought some low integrity credits isn’t a path towards net zero, it’s a recipe for climate disaster.

“While on the surface the review gives ACCUs a clean bill of health, in reality it ignores the findings of the report it commissioned from the Academy of Science confirming the integrity issues raised by the Australia Institute and others.

“The biggest problem with this review is that while makes some suggestions about how to improve the integrity of Australian carbon credits, it doesn’t make an estimate of how many dodgy carbon credits have been issued and it doesn’t provide any guidance for how we can identify those dodgy credits,” said Richard Denniss.

The Australia Institute is hosting the Climate Integrity Summit on 15 February 2023 at Australian Parliament House.

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