Transparency and enforcement will be key to the success of the nation’s carbon market

The overseer of the review into Australia’s carbon credit scheme says calls are emerging for more transparency, while warning we should not pin our hopes on technology-based solutions.

The integrity of Australia’s scheme to assess and trade carbon credits will be crucial to its success, a panel has heard.

Third party assessment and validation will be crucial to the integrity of the nation’s carbon market, the ongoing review of the Australian Carbon Credit Units program has heard, while there have also been calls for a more independent overseer of the scheme, according to former chief scientist Ian Chubb.

Professor Chubb, who is chairing the review panel, told a summit in Sydney on Wednesday that many of the technologies being touted as a solution to abatement were “gleams in the eye” in terms of being able to sequester carbon at scale. Photosynthesis is still the only large scale process currently able to hit the targets needed to reach net zero by 2050, he added.

Professor Chubb, who was tapped by Energy Minister Chris Bowen to lead the review into the integrity of Australia’s $4.5bn carbon market, said the panel had received about 215 submissions, with key themes already emerging.

“There’s a widespread call for increased transparency across this and particularly to allow third party assessments and validation given the data that is presently not available to those third parties,’’ Professor Chubb said. “It is a quite widespread view, that there would be more truth, integrity, and more capacity to trust … if the data were available more openly.’’

Professor Chubb said there was also a widespread view coming out of the submissions that the Clean Energy Regulator which oversees the scheme could have a potential conflict of interest in doing so.

“There’s also a widespread view that the governance of the scheme should better reflect best practice in distribution of responsibilities,’’ he said.

“There is a view through no fault of its own the regulator has been asked to do multiple tasks which some people do see as potential for conflict and that we should seek to simplify or make that more regular.’’

Ian Chubb.

In terms of the credibility of various abatement methods, Professor Chubb said there were strong arguments being put, often on opposing sides, about the same methods or technologies.

“And that’s not a surprise, it’s not unexpected, but somewhere along the line, this group of hard working people trying to do a good job, will have to make a judgment call about which where the weight of evidence lies, and if and how we can improve it,’’ he said.

“So the trust issue increases and the value therefore, of the whole scheme increases.’’

Elisa de Wit, a Norton Rose Fulbright partner specialising in climate change and the environment, said key issues to be addressed in terms of the integrity of carbon trading schemes included the possible double-counting of carbon abatement.

“Do we trust that a particular carbon credit represents one tonne of verifiable real abatement,’’ she said.

“Do we trust that the project activity that has produced the credit has not caused any negative impacts or had any unintended consequences.

“Do we trust that a scheme that has issued a credit for removal activities has adequately factored in what happens if that removal is reversed.’’

Former California Air Resources Board executive officer Richard Corey told the Carbon Market Institute’s Australasian Emissions Reduction Summit that the credibility of any carbon trading program relied heavily on enforcement.

“That’s always a question I look at when I look at programs – it’s ‘what’s the enforcement authority, and the will and track record to act on that enforcement authority,” said Mr Corey, who left the environmental regulator this year.