Australia backs carbon credits criticized as failing climate

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(Bloomberg) – Australia’s carbon credit market will go on without a major overhaul after a government-backed study largely dismissed claims the system is failing to cut promised emissions.

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A panel led by the country’s former chief scientist, Ian Chubb, on Monday proposed changes to strengthen transparency, governance and data sharing, but concluded the system was essentially sound and fundamentally well-designed when it was first introduced. creation in 2011.

Critics, including a former regulator, questioned the role of credits largely generated by the land sector through sequestration projects in reducing greenhouse gases, and described the system as a fraud and a fraud. waste of taxpayers’ money.

It has been argued that the level of reduction was overestimated, Chubb said in a report, following the six-month study. The panel does not share this view.

To learn more about carbon markets in Asia, click here.

The Australian government has pledged to follow through on the panel’s 16 recommendations, including plans for greater division between regulatory and reporting roles, and scrapping new projects that rely on flawed methods to avoid deforestation. He also proposed that human-induced regeneration methods such as native regrowth management projects should be subject to stricter regulation requiring more frequent release of data.

The Chubb-led review will not help persuade polluters to cut emissions rather than rely on credits, according to the Climate Council, a climate science advocacy group. Cheap and easy offsets on paper do little to tackle the climate crisis, said Jennifer Rayner, the council’s advocacy officer.

And while there may be some positive support for carbon credits following the government’s announcement, a sharp rise in prices is unlikely due to the abundant supply in the futures market, according to a report. note from RepuTex, a data and analytics provider.

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He added that Australia’s key Safeguard Mechanism instrument to control emissions from big polluters will have a bigger impact on rising prices as industry players seek offsets early to meet the challenges. compliance requirements.

(Adds chart and commentary of analysts’ comments in final paragraphs.)

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