Zero agreement on value of carbon offsets

When it comes to the murky world of carbon offsets, not even God’s highest servants can navigate through all the complexities.

When it comes to the murky world of carbon offsets, not even God’s highest servants managed to navigate through all the complexities.

In 2007, the Vatican struck a deal to offset the city-state’s carbon emissions through a plan to plant a forest of trees in Hungary. But by 2010, with no trees planted under the scheme, the Vatican was reportedly studying whether to take legal action over the case.

As with many new emerging sectors, the early years of carbon offsets were punctuated by frauds, missteps and inconsistent regulation. However, the sector has ­matured since then — perhaps the most visible user of offsets has been Qantas, which runs the ­biggest offsetting program of any airline — and the demand for offsets could accelerate sharply in the years ahead.

Carbon offsets, the majority of which involve planting trees or preserving rainforests to counteract emissions generated by other industries, could become an increasingly important part of the Australian economy under the 2050 zero net emissions target that was flagged by Labor and is being actively pursued by some of the country’s biggest companies.

While Labor has so far been largely silent on how it plans to meet that commitment, any plan that would see Australia sustain its coal and oil and gas industries while also meeting the zero net target would likely have to rely heavily on carbon offsets.

But there are already concerns about whether carbon offsets would be a suitable means for abatement on such a scale. Some environmental groups, such as the Climate Council, are opposed to the use of offsets.

“The Climate Council’s position is that there is no room for carbon offsets,” a spokeswoman for the group said. “Greenhouse gas emissions need to be cut deeply and rapidly at their source.”

Others, such as Conservation Council of WA executive director Piers Verstegen, said scaling up the size of the carbon offset industry to the level needed for zero net emissions would be “problematic”.

Many of the easiest sources of abatement in Australia had already been tapped, he said, while looking overseas posed problems of transparency and credibility.

“We can’t really have a good handle on whether those offsets are actually occurring or not because they’re happening outside our regulatory regime, they’re happening in countries with different standards being applied, and for that reason our position is if you are going to require offsets, they have to be in Australia,” Mr Verstegen said.

While an expanded carbon offset industry in Australia could be a big source of job creation, he said the recent bushfires showed the challenge of relying on tree planting to offset emissions.

Meanwhile, resources group Woodside Petroleum is a fan of offsets and has already struck a deal with Greening Australia to carry out large-scale tree planting, mostly in Western Australia.