KEY POINTS
- A new review found Australia's carbon credit market is 'sound'.
- The government accepts changes are needed to improve transparency.
- An independent report previously found the scheme equated to 'fraud' on the environment.
A whistleblower academic who claimed fraud is rife in Australia's controversial carbon credit scheme says he is "disappointed and really confused", after a new report rejected the worst of his accusations.
A review into A, conducted by former Australian chief scientist Ian Chubb and released on Monday, found it remains "essentially sound", despite a greater need for transparency.
But it called for significant changes to the decade-old system, which allows companies to emit extra carbon dioxide for a price, including tougher integrity oversight for companies attempting to rort it.
Labor was spurred into implementing the review warned the scheme amounted to a "fraud on the environment", by funnelling millions of taxpayer dollars into carbon credits for projects with no environmental benefit.
'No idea'
Responding to the independent report on Monday, Professor Macintosh argued it was "illogical" to claim the system was fit-for-purpose while also overhauling its integrity safeguards.
"We're disappointed and really confused about the 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," he told SBS News.
The government has accepted all 16 of Professor Chubb's recommendations, including scrapping the ability to claim credits for "avoided deforestation", and establishing a new oversight body to ensure "integrity" in the scheme.
Advocates say the scheme enables big polluters to continue. Source: AAP
Professor Macintosh, who once oversaw the ERAC, accepted that has "opened a window of hope", but said the report left major warnings about the scheme unanswered.
"I've got no real idea [why that is the case]. All I know is that they were presented with a veritable mountain of evidence that suggests there's major problems with the scheme, and then that was not even referred to in the report," he said.
The decade-old system, allowing companies to emit extra carbon dioxide for a price, has come under fire over claims it was allocating millions in taxpayer funding for climate action projects which had no environmental benefit.
Professor Ian Chubb (left) found the carbon offset scheme was fundamentally sound. Source: AAP / Jeremy Ng
"It's absolutely vital that Australians can have confidence that when a carbon credit is exercised, it is real, it is verifiable and it is substantial," Mr Bowen said.
'Elephant in the room'
The Climate Council warned the review did not address the key problem with the system: companies using carbon credits, initially intended as a last resort, as the "first and only thing they're doing" to cut emissions.
While welcoming attempts calls for more transparency, Climate Council head of advocacy Jennifer Rayner stressed offsetting was “no substitute” for genuinely reducing emissions.
"Big polluters shouldn't be able to just buy cheap, easy offsets and keep polluting as usual ... Too many companies are just paying for offsets," she said.
"That's the elephant in the room here that the Chubb Review really hasn't addressed."
Dr Rayner called for a "hard cap" on the number of credits companies can claim.
Solutions for Climate Australia director Barry Traill said the system acted as a "get out of jail free card" for the fossil fuel industry, which used carbon credits to "dodge their responsibilities".
"It’s like letting a gas company knock your house down on a promise they’ll start building one which will be ready in a few decades’ time. Will they do it? Will it be the same quality? The priority is to not knock the house down in the first place," he said.
What are carbon credits?
Carbon credits - also known as carbon offsets - allow their owner to emit extra greenhouse gases, each credit equating to a tonne of carbon dioxide.
Companies are allocated a certain amount of credits, which are reduced over time. Those who cannot easily slash their emissions can continue to operate, but at a higher financial cost.
Companies can also sell their unneeded credits, creating another financial incentive to slash emissions.
The credits were a significant part of the former Coalition government's $4.5 billion Direct Action fund on climate change.
Why are they controversial?
The former Coalition government repeatedly insisted Australia was on track to "meet and beat" its climate targets.
But many experts dismiss that claim as creative at best, criticising its use - or misuse - of carbon credits.
Professor Macintosh described Australia's carbon credit market as "largely a sham" last year, his review warning the majority of emission cuts claimed under the scheme would have happened regardless.
That included credits being granted for growing trees that were already there, for not clearing forests that were never going to be cleared, and for operating electricity generators that would have run anyway, Professor Macintosh claimed.
"What is occurring is a fraud on the environment, a fraud on taxpayers and a fraud on unwitting private buyers of [carbon credits]," he said.
ERAC rejected Professor Macintosh's claims, which it said were "not substantiated" and "failed to present robust evidence of a lack of integrity or over-crediting".
