We are being conned on carbon credits — they’re an Abbott-era fiction, and an expensive one

This is part one in a series. For the full series, go here.

Tony Abbott has been out of politics for four years, and out of office for eight years, but his denialist hand still controls Australian climate policy from beyond the political grave. He will guarantee Australia will not reach Labor’s mandated target of a 43% reduction in carbon emissions by 2030 — because Labor will let him.

That 43% target requires that Labor’s safeguard mechanism passed by Parliament earlier this year, which covers 200-plus of our largest carbon emitters, deliver a cut in CO2 emissions of 46 million tonnes a year to 100 million tonnes a year from that group by 2029-30.

Many of the facilities covered by the mechanism — coal mines, gas plants, cement factories, steelworks — are simply not capable of reducing their emissions that much, if at all. They’ll instead rely heavily on purchasing Australian carbon credit units (ACCUs) as offsets to their excessive emissions. The government has factored in that 9 million tonnes, or around 20% of the total safeguard mechanism reduction, will be delivered through ACCUs.

There are currently more than 120 million ACCUs in circulation, supposedly representing carbon that has not been emitted that otherwise would have been, or carbon that has been stored. One of the biggest single sources of ACCUs is human-induced regeneration vegetation projects established under the Abbott government’s emissions reduction fund (ERF) — around 37 million ACCUs.

The ERF began life amid Abbott’s 2009 takeover of the Liberal Party and his opposition to the carbon pricing scheme that John Howard had supported and Malcolm Turnbull, as leader, had agreed to with the Rudd government. It was a back-of-the-envelope program designed to do two things: pretend Abbott — who called climate science “absolute crap” — had a climate policy, and funnel taxpayer money to National Party constituents. It would do so by offering taxpayer money for energy efficiency and carbon sequestration projects. Nearly all of the carbon sequestration projects involve preserving or re-growing woody trees, on farming properties — human-induced regeneration.

All of the ACCUs generated by the ERF have a central problem: additionality. ACCUs can only be genuine offsets if they represent a departure from business as usual. A business becoming more energy efficient because it reduces costs, or a farmer not clearing a paddock because they had no intention of using it (the second biggest source of ACCUs is “avoided deforestation”), isn’t additional. But the additionality requirements in the ERF are minimal — they rely on assurances from project proponents, and subjective assessments of counterfactual scenarios involving land use.

There’s another problem with “additionality” — offsets simply mean the maintenance of existing, too-high levels of carbon emissions. While policymakers have the primary job of stopping carbon emissions from rising further, the best even a worthwhile offset can do is perpetuate the status quo that is driving rapid global heating. For climate action, the true value of carbon sequestration lies in never being used as an offset for higher emissions, but in reducing total emissions.

Vegetation-based ACCUs have another problem: they don’t last long enough. Carbon dioxide emissions last a very long time in the atmosphere: around 40% last a century, and a fifth last more than 10,000 years. But ACCUs derived from carbon sequestration only need to last 100 years. In fact, you can earn ACCUs for sequestration lasting just 20 years, if you accept a 20% discount. If trees generating 20-year ACCUs die or are burnt out after the end of that period, releasing the stored carbon back into the atmosphere, any offsetting benefit is lost, without any obligation on the project owner to replace it.

These problems around carbon sequestration are well-known and have been rehearsed before. They were known when Abbott announced his “Direct Action” scheme over a decade ago. Nothing has emerged since then to enhance the credibility of the ERF and carbon sequestration, or the idea of carbon offsets. But they’re important as background to the more fundamental problems around using trees to store carbon: the science simply doesn’t support it, and there’s no independent verification that any sequestration is occurring across projects that have generated 37 million ACCUs.

In a new series, of which this article is the first instalment, Crikey is taking a deep dive into what is not merely a deeply flawed Abbott-era program, but a crucial element of the current government’s quest to achieve a 43% “reduction” in emissions — even if 9 million tonnes a year are “offsets” that may not last until 2050, don’t represent any departure from what would have happened anyway, and which don’t stand up to scientific consensus.

It turns out that a substantial proportion of ACCUs really are a con, one inflicted on us by Tony Abbott, that continues to pollute our climate policy to this day.

Next week: why the science of re-vegetation doesn’t add up for carbon credits.

Correction: This article has been updated to remove a reference linking Human-Induced Regeneration to “soil carbon”, which is entirely separate from carbon sequestration via HIR.