My Daily Advertiser Op Ed column for today

by ray goodlass

The great carbon offset is nothing more than a scam

Australia’s largest carbon offset project type is failing, with experts suggesting the scheme should be referred to the National Anti-Corruption Commission wrote Andrew Macintosh, Don Butler and Deb Wilkinson in The Saturday Paper. Let’s examine the issue to see if the scheme really is riddled with corruption.

The backbone of Australia’s carbon offset scheme are projects that are claiming to regenerate native forests in uncleared areas, largely by reducing livestock and feral animal numbers. These human-induced regeneration (HIR) projects do not involve any tree planting. Grazing control is supposed to induce regeneration from soil seed stock and suppressed seedlings.

There are now 468 of these projects that stretch over 42 million hectares, an area substantially larger than Japan. To date, the projects have received more than 42 million carbon credits. In recent years, they have accounted for almost 40 per cent of annual credit issuances.

Large polluters covered by Australia’s carbon pricing scheme, known as the safeguard mechanism, are expected to rely heavily on credits from HIR projects to meet their emission reduction obligations. Due to this, the environmental effectiveness of the safeguard mechanism depends, to a significant degree, on the integrity of these projects and whether their credited sequestration is real, additional and permanent.

This week, a research team from the Australian National University, University of New South Wales and the University of Queensland published an article in a Nature journal that casts a dark cloud over the integrity of these projects.

The study looked at 182 HIR projects that are supposedly regenerating native forests across 3.4 million hectares, mostly in dry outback areas in Queensland, NSW and Western Australia. Despite receiving more than 27 million credits over the period of analysis, tree cover in the “credited areas”, where the forests should be regenerating, barely increased. Based on the research, it rose by only 0.8 per cent.

Not only were the changes in tree cover small, but they largely mirrored changes in adjacent comparison areas, outside the projects. This suggests the changes are predominantly attributable to factors other than the project activities, most likely rainfall. In simple terms, the credited sequestration is not real or additional and it is unlikely to be permanent.

The problems with these projects are not complicated. Generally, it is not possible to regenerate native forests in uncleared areas. To regenerate a forest through human intervention, it is usually necessary for the area to have previously supported one, and for the forest to have been lost and prevented from naturally regenerating by some identifiable process. This generally involves clearing with bulldozers and chains, both to clear the primary forest and to get rid of subsequent regrowth. Decades of research has shown that grazing alone does not usually materially reduce tree cover.

Because the credited areas of HIR projects largely have not been cleared, they typically contain substantial numbers of old trees that were there when the projects started. Competition from these old trees for water, nutrients and other resources makes it impossible to add significant numbers of new ones. The projects are doomed to failure, with ups and downs in tree cover mainly being driven by seasonal variability in rainfall.

If the projects were being issued credits based on the amount of carbon sequestered in new regeneration, there would not be a problem. Failing projects wouldn’t get any credits. This, however, is not how the scheme works. Projects are given credits based on the outputs from a model that assumes even-aged forest regeneration is occurring across the entirety of the credited areas, even where nothing is happening on the ground.

The study, and the simplicity of the problems, should spark the government into action. Already more than $300 million in government funding has been provided to HIR projects, with a further $1.2 billion contracted to be spent over the coming years. If carbon credits keep being issued to HIR projects, the fraud will be worth somewhere in the order of $3 billion to $5 billion by 2030. Large polluters’ reliance on credits from these projects will also punch a hole in Australia’s emission reduction target, leaving Australia well short of its ambition to reduce emissions by 43 per cent below 2005 levels by 2030.

The outcome of this is a system where hundreds of projects are being granted carbon credits for carbon sequestration that is largely neither real nor additional. It makes a sham of the safeguard mechanism because most covered facilities will meet their emission reduction obligations through carbon reductions that are not actually happening.

So yes, the carbon offset scheme really is riddled with corruption.