The Greens have called on the Albanese government to reject advice that Australia should allow greater use of international carbon offsets, arguing it would delay cuts in greenhouse gas emissions locally.
A review of international offsets by the Climate Change Authority, a policy advisory body, urged the government to develop a carbon market strategy as a step towards allowing international carbon offsets to be traded along with Australian carbon credits.
Carbon offsets are bought by governments and businesses as an alternative to making their own emissions cuts. Each carbon credit is said to represent one tonne of carbon dioxide that has either been stopped from going into the atmosphere or drawn out of it.
Australian credits are issued by the Clean Energy Regulator and recognised as a valid way to help meet the national emissions reduction target. International offsets are not used in this system, but businesses and organisations can voluntarily buy them to meet self-imposed goals.
The review, which was commissioned in January by the Morrison government, found the carbon market in Australia was “fragmented, inefficient and complicated”. The authority’s chief executive, Brad Archer, said bringing the two systems together “could help accelerate global decarbonisation and enhance the integrity of carbon offsets”.
The Greens leader, Adam Bandt, said the government should reject what he described as “international offset accounting tricks”, noting the European Union had decided last year to no longer allow international credits in its emissions trading scheme following concerns over system integrity.
“If climate action is left to accounting tricks, pollution will go up and we won’t stop the climate crisis,” he said.
“These international offsets just delay action and could also undercut our farmers, who could earn income from helping draw down pollution locally.”
The review points to a looming debate over the extent to which it is valid to use carbon credits while reducing emissions to net zero by 2050, a widely adopted global target. While the use of offsets has significant support – particularly among polluting companies promising to offset their impact on the planet – critics have raised concern about whether their overuse will delay a necessary shift away from fossil fuels.
The Climate Change Authority did not make a recommendation on how many credits should be allowed and said the international carbon market was still evolving in the wake of the 2015 Paris climate agreement and the gradual adoption of rules to govern it. Archer said there would always be a need for offsets but “we need to be reducing emissions wherever we can, as quickly as we can, where that makes sense to do it”.
The review was welcomed by the Carbon Market Institute, which represents businesses that generate credits and polluting companies that trade in them. “While the report recognises that these markets are still emerging and not perfect, it acts as a reminder of the significant role that they can play in coordinating business and government efforts to accelerate ambition,” the institute’s chief executive, John Connor, said.
The climate change minister, Chris Bowen, said the government would formally respond to its recommendations “in due course”, but its immediate focus was on the “integrity and growth” of the domestic carbon market.
Bowen has commissioned a review of the Australian system headed by the former chief scientist Prof Ian Chubb. It will consider allegations by Prof Andrew Macintosh, who spent years working on the integrity of the carbon credit system as chair of the Emissions Reduction Assurance Committee.
Macintosh described the domestic system as “largely a sham” and a fraud on taxpayers and the environment. In March, he released several academic papers with colleagues that set out a case that most Australian carbon credits do not actually represent real or new emissions cuts.
The Clean Energy Regulator, which is responsible for the system, rejects the allegations. The Chubb review is due to report by the end of the year.