Australian Economy

Labor to reshape carbon credit committee as Coalition-appointed members resign | Environment

Labor will make substantial changes to a committee responsible for ensuring the integrity of the national carbon credit system after the departure of three members appointed by the Coalition, including the chair.

A spokesperson for the climate change minister, Chris Bowen, confirmed he had accepted the resignation of three members of the Emissions Reduction Assurance Committee.

The departing members are the former mining executive David Byers, the economist Dr Brian Fisher and Margie Thomson, the chief executive of the Cement Industry Federation.

Carbon credits are bought by governments and businesses as an alternative to making emissions cuts. The committee’s role is to assess whether methods used to earn carbon credits meet offset integrity standards – effectively, that they represent real and new cuts in greenhouse gas emissions that would not have happened anyway.

Byers, who was the committee chair, and Fisher were appointed by the Coalition in 2020. Their addition to the committee was revealed the following January. Climate scientists and campaigners criticised Byers’ appointment given his previous links to fossil fuel industries. Some said they were surprised by Fisher’s appointment given his climate analysis work had been politically divisive.

External experts have called for a complete overhaul of the carbon credit scheme administered by the government and the Clean Energy Regulator. Prof Andrew Macintosh – Byers’ predecessor as chair of the committee – has published several papers arguing that most carbon credits do not represent real or new emissions cuts. The regulator has rejected this, saying both it and the committee had undertaken considerable work to test Macintosh’s assertions and found no evidence to support them.

Bowen has appointed the former chief scientist and senior academic, Prof Ian Chubb, to head a six-month review of the scheme.

On Thursday night, the minister’s spokesperson said: “The minister can confirm he has received and accepted resignations from three members of the [committee].

“The minister looks forward to appointing new committee members in due course.”

Q&A

What are carbon credits?

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Carbon credits are used by the government and polluting companies as an alternative to cutting carbon dioxide emissions.

Instead of reducing their own pollution, they can choose to buy carbon credits that are meant to represent a reduction in emissions elsewhere.

Each carbon credit represents one tonne of carbon dioxide that has either been stopped from going in the atmosphere, or sucked out of it.

Methods approved to generate carbon credits in Australia include regenerating native forest that has been cleared, protecting a forest that would otherwise have been cleared (known as “avoided deforestation”) and capturing and using emissions that leak from landfill sites to generate electricity.

Credits are bought by the government through the $4.5bn taxpayer-funded emissions reduction scheme or by polluters on the private market. 

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Fisher, a former head of the Australian Bureau of Agriculture and Resource Economics, released modelling before the 2019 election that suggested Labor’s climate policies would reduce gross national product over the next decade by hundreds of billions of dollars, lead to lower real wages and employment and substantially increase the cost of electricity.

The Coalition government cited the analysis while accusing Labor of planning to put a “wrecking ball” through the economy. In a piece for Guardian Australia, Frank Jotzo, a climate economist and professor at ANU’s Crawford School of Public Policy, said Fisher’s modelling was based on ridiculous and outdated assumptions and ignored opportunities for cheap cuts.

At the time, Fisher said he rejected criticism of his work and he had been invited to join the committee based on his role as an author of three assessment reports for the Intergovernmental Panel on Climate Change. He said he believed debate over climate action had become too polarised, but noted his 2019 analysis was based on government emissions projections that had since been superseded.

Byers is a former senior executive at the Minerals Council of Australia, BHP and the Australian Petroleum Production and Exploration Association, and ran the CO2CRC, an industry and government-funded carbon capture and storage research body. He said he stood aside from some discussions as committee chair to manage any potential conflicts of interest while in the CO2CRC role.

The Chubb review of the carbon credit scheme fulfils a commitment made by Labor last year. Bowen promised a “short, but thorough” review after research from the Australian Conservation Foundation and progressive thinktank the Australia Institute estimated 20% of credits did not represent real cuts and were essentially “junk”.

Macintosh, an Australian National University environmental law professor, reinforced that conclusion in a series of papers published with colleagues this year. The criticisms were strongly rejected by the regulator, which has overarching responsibility for designing and regulating methods to create carbon credit methods, and the industry body the Carbon Market Institute.

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