First question in the telco hack: Why did Optus have so much of our data?

Market Advisory Group managing director Raphael Wood. Illustration: Sturt Krygsman.

Questions over the tragic Optus data theft start with just why the phone company had and kept so much of our data in the first place.

Data is a valuable asset and maybe now people realise what can go wrong when their own data is kept by someone, perhaps they might question next time a company wants their information and certainly will better understand the value of data.

In the case of the digital platforms like Google, Meta and Apple the reason why they want your data is simple — to drive advertising revenue and product development — but in their case often they are collecting the data without you even knowing about it.

Most people are either oblivious or don’t care, but this should change post Optus.

Amid Treasurer Jim Chalmers’ preparation for his October 25 budget, on Friday he received the ACCC’s recommendations on just what sort of regulatory changes are needed to control the digital platforms.

The Optus snafus are a timely reminder of the value in the hands of these global behemoths.

As an aside they also underline the first rule of crisis management — which is to honestly explain what has happened, what is being done to fix it and how customers can respond.

Optus, maybe for reasons beyond its control, has not met these tests yet.

ACCC chief Gina Cass-Gottlieb has said her digital report is “significant and will assess the question of addressing harms to competition, consumers, and business users in areas dominated by large digital platforms.”

Just what to do is something that governments around the world are looking at, and was centre stage in Cass-Gottlieb’s meetings this month in Washington, including conferences also attended by European and other regulators.

The argument is litigation to combat abuses of market power has proved inadequate in part because it focuses on a single issue and takes time — during which the platform has already established the market power the regulator was trying to address.

One approach the ACCC has addressed is a code of conduct or specific laws which dictates what the platforms can and can’t do, like preference their own products against competitors, tell you they are not collecting your personal data when they are, and other regulations — just as happens with other industries with too much power like energy utilities, airports and the NBN.

This so called ex ante regulation puts the platforms on notice and breaches must then be litigated.

As horrific as the Optus thefts have been, they have put the spotlight on the issues of data theft and use in a way which should focus Chalmer’s mind on the issue in a way he may not have before.

Pointy end for carbon markets

Climate and Energy Minister Chris Bowen’s reviews of the carbon market and safeguards policies are hitting the pointy end, with submissions now in on both, pending decisions on the Chubb review by year’s end and safeguards in March next year.

Already the target companies are positioning themselves, with BlueScope confiding so-called green steel is a way off and Woodside seeking the ability to use international credits to offset any breaches of the safeguards limits.

Market Advisory Group’s Raphael Wood has deceptively easy solutions to both reviews, which is to keep it simple and let the market operate with as much certainty as possible while updating as dictated by science.

Market integrity is key and Climate Friendly’s Skye Glenday is pushing for a national database on the different carbon methods to increase transparency and help independent audits.

Green Collar’s James Schultz adds the scheme should stress the role of actual measurement to show the increase in carbon abatement from a project rather than relying on big picture models.

Previous minister Angus Taylor did nothing about safeguards and intervened with increasing regularity in the carbon market, which destroyed confidence.

The key is to get the right standards set from the beginning and 10 years into the carbon. credit scheme the Bowen review is well timed.

There is also a need to co-ordinate policies across government, with Schultz noting vegetation was cleared in the last 12 months across some 700,000 hectares in NSW and Queensland, at the same time as carbon credits were issued to revegetate parts of the states.

Some clearing is necessary to rid the land of pests like prickly acacia and camel apple but the best answer is obviously not to clear in the first place.

The big mover in offset registration is soil carbon — up from 20 projects 18 months ago to 370 approved today, while controversial methods like landfill gas have fallen to near zero and human induced regeneration has also fallen.

The key test in voluntary credits is additionality — doing something which wouldn’t have happened — to abate carbon while the safeguards policy is aimed to incentivise investment to cut emissions.

The safeguards policy applies to the big emitters and Green Collar, the CMI, Market Advisory’s Wood and Climate Friendly, among others, argue it should be applied on a facility basis.

If BlueScope has several steel plants around the country then each one should be subject to its own timeline, with the right starting point crucial to avoid the scheme starting with a mile of corporate headroom above the targets.

Under the policy if the facility emits 100 tonnes of carbon a year then the Carbon Market Institute says each year this should be cut by 6 per cent (the top end of the government’s suggested range) — so next year it can only emit 94 tonnes.

If it cuts by made the facility earns safeguard credits (SMCs) and if it fails then it must buy the credits to make up the shortfall.

The baseline decline should be a floor, not a ceiling, to encourage more cuts and reductions must be real and not theoretical.

Given the previous government made no effort to activate the safeguards policy the resurrection under Bowen is welcome.

This market will be separate from the voluntary carbon credit (ACCU) market, with one unit equal to one tonne abated. It is now priced between $31 a unit and $60, with the higher price for more value added action like biodiversity benefits (restoring habitat to let koalas live).

Carbon Count’s Phil Mulvey argues technology is bringing costs down, and for soil carbon “integrity may also be improved by ensuring the land management strategy is independently reviewed and soil sampling strategy and sampling is developed independently of the project proponent, farmer, aggregator or project manager.”

Governance is another issue, with Green Collar’s Schultz arguing there is a perception of conflict when the Clean Energy Regulator issues carbon credits, buys them back and is responsible for writing the methods used to create the credits.

It would be better if Australia followed the US and other jurisdictions so rules are drawn up by the regulator but the methods are designed by private operators like VERRA, in line with the market rules.

Personnel on the different review boards like ERAC are also important because they act like a corporate board in providing oversight and review of the scheme’s operation.