Australia risks being a ‘state sponsor of greenwashing’ if it relies on carbon offsets, expert warns | Greenhouse gas emissions

Australian government risks becoming a ‘state sponsor of greenwashing’ if it continues to allow companies to use carbon offsets without much stricter regulation, says member of expert panel advising UN on pledges net zero climate.

The UN panel recommendations published at the Cop27 climate summit in Egypt for businesses, regions and policy makers around the world on credible net zero commitments.

Experts said pledges by many Australian companies would not meet the panel’s recommendations, which said continued exploration and production of fossil fuels and unlimited use of carbon offsets were inconsistent with plans net zero.

Dr Bill Hare, Australian climatologist, advisor and member of the High Level Expert Group on Net Zero Emissions Commitments by Non-State Entitiestold the Guardian that the main implication of the report was “whether or not Australia would bite the bullet and move away from reliance on offsets”.

“If the government redoubles its efforts on the current system in which offsets are allowed to be used to make all so-called emission reductions, then there is a serious risk that the Australian government will become a state sponsor. greenwashing,” he said.

Policymakers, regulators and boards of directors will be watching the expert panel’s report closely. He stressed that companies should significantly reduce absolute pollution by 2030, in line with the global target aim to limit heating to 1.5C above pre-industrial levelsand using high integrity offsets only for further reductions beyond that to “balance” the remaining emissions.

The report also says that companies with net zero plans must build or invest in new coal, oil and gas supplies, and fossil fuel companies must also consider “scope 3” emissions – those emitted by the use of their products by their customers. than their direct pollution.

Hare said the group had called for the creation of a task force to ensure the recommendations were incorporated into regulations and legislation around the world. In Australia, he said it should involve federal and state governments and corporate and consumer watchdogs.

“There has to be regulation,” Hare said. “The Wild West approach to corporate net zero goals must end so that the public, consumers and investors have confidence that corporate net zero claims are real and not fake. greenwashing.

“We have come to a time where we can no longer afford to cheat with the climate. It is too important and the implications for future generations are too great.

Questions and answers

What are carbon credits?


Carbon credits are used by government and polluting companies as an alternative to reducing carbon dioxide emissions.

Instead of reducing their own pollution, they can choose to buy carbon credits that are supposed to represent a reduction in emissions elsewhere.

Each carbon credit represents a ton of carbon dioxide that has either been prevented from entering the atmosphere or has been sucked out.

Approved methods of generating carbon credits in Australia include regenerating native forest that has been cleared, protecting forest that would otherwise have been cleared (known as ‘avoided deforestation’), and capturing and use of emissions leaking from landfills to generate electricity.

The credits are purchased by the government through the $4.5 billion taxpayer-funded emissions reduction program or by polluters in the private market.

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The use of carbon offsets and the rules governing them are at the center of discussions in the Egyptian city of Sharm el-Sheikh. US climate envoy John Kerry, who announced last week the creation of a carbon offset plan known as the Energy Transition Accelerator, promised to help developing countries move away from fossil fuels faster.

The plan has been criticized by environmental groups, who said it would set back real efforts to cut emissions. Kerry responded that fossil fuel companies would not be allowed to participate in the program.

In Australia, there has been a rapid expansion of net zero liabilities in boardrooms, including at many large fossil fuel companies. Polly Hemming, a climate researcher at the Australia Institute, said the lack of regulation meant it was “like a self-chosen adventure”.

She said most fossil fuel companies rely on purchasing offsets to reduce their reported emissions in their net zero plans. “There is an over-reliance of the private sector on offsets and the government allows that,” Hemming said.

Albania’s government is consulting industry on changes to a coalition-era program – known as the Safeguard Mechanism – which promises to cap and gradually reduce greenhouse gas emissions from all 215 sites the most emitters in the country.

In a consultation document, the government said it intended to allow companies to purchase and return Australian offsets “as an alternative to reducing their on-site emissions” – a step explicitly ruled out by the group. of UN experts.

Erwin Jackson, policy director of the Investors Group on Climate Change, said the group’s recommendations would help set benchmarks for assessing corporate commitments and would ultimately be “the regulatory system that governed greenwashing”. .

“This scientific assessment will be how every Australian company’s commitment to addressing climate change will be judged,” he said.

He said investors had shown at annual fossil fuel meetings in Australia that they already viewed the development of new fossil fuels as incompatible with credible net zero plans. “You can’t say you’re committing to Paris Agreement and get out there and develop fossil fuels, and you can’t offset your way to net zero,” Jackson said.

A recent review of 187 companies on the ASX200 by the Australian Council of Superannuation Investors – a group that represents investment funds and asset owners on boards – found that almost half had zero net liabilities, but only 3% had all emissions caused by the company’s activities.

The council’s chief executive, Louise Davidson, said she had seen “a greater reliance on offsets than we were comfortable with”.

“The research revealed that many goals have been set and that business ambition is growing,” she said. “But the disclosure commitments around these have not convinced us that Australian businesses are headed for 1.5C.”

Climate Change and Energy Minister Chris Bowen said through a spokesman that “reduction is still assured” where offsets have been used and the government is committed to ensure “confidence in the integrity of Australian corporate climate commitments”.

“The government maintains its safeguard [mechanism] reforms, which allows facilities to use offsets to address reductions in their baselines,” the spokesperson said.

Bowen has commissioned a review of Australia’s carbon credit program led by a former chief scientist, Professor Ian Chubb.

The review considers academic claims, including a former head of a carbon credit integrity assurance body, Professor Andrew Macintosh, that up to 80% of credits approved in Australia did not produce a real reduction in emissions due to a mismanagement of the system by the government regulator. He must submit his report by the end of the year.