Former watchdog goes public with allegations of carbon credit ‘fraud’
The criticism comes just weeks after the ACCU market was rocked by Energy Minister Angus Taylor’s decision to grant owners of existing onshore projects the right to sell their assets on the carbon market – triggering a meltdown brutal benchmark price that enraged existing participants.
ACCUs are a financial asset generated by the clean energy regulator when people promise to create a project that avoids emissions or stores carbon in trees, soils and geologic formations. With a budget of $4.5 billion to spend on ACCUs, the regulator has so far spent $1 billion to purchase over 100 million ACCUs covering 1,000 projects, with contracts underway for 1.6 billion more dollars.
The Australian Financial Review revealed in September that ASX-listed companies seeking to offset their emissions were being warned to do their own due diligence on federally approved farmland credits due to concerns over the methodology.
Prof Macintosh, who chaired the integrity committee overseeing the regulator’s methodology for 6½ years and was a member of the 2020 Grant King review of low-cost reduction sources, said he there were serious problems with the methodology of the program.
These include faulty assumptions related to deforestation, issuing credits for “trees that are already there” and inappropriate rule changes regarding the use of landfill gas projects at sites such as Lucas Heights. in Sydney, Woodlawn south of Goulburn, Mugga Lane in Canberra and regional facilities in Victoria Hallam, Wyndham and Melbourne.
Insisting he doesn’t want to ‘dismantle’ Australia’s carbon market – which he sees as a key driver of behavior change to improve environmental outcomes in a cost-effective way – Prof Macintosh said it couldn’t work if there was integrity in the system.
“It facilitates a significant transfer of wealth, from taxpayers and involuntary buyers, to project developers and aggregators, but achieves little reduction.”
Professor Macintosh likened faulty carbon credits to ‘welfare payments for those who don’t deserve it’.
“In 2014, Tony Abbott said that carbon markets involve ‘the non-delivery of a substance invisible to no one,'” he said.
“What is happening here is worse. It is the non-delivery of nothing to a paying customer.
The implications of the regulator’s collapse in governance meant that a billion dollars of public money had been wasted, Prof Macintosh said.
“Secondly, when these low integrity credits are used to offset polluter emissions, it actually increases emissions.
“It makes it harder for Australia because we get the increase in emissions from polluters, but there is no offsetting reduction in emissions.
“Additional resources will now have to be spent to find a replacement reduction for the fake reduction that was used to offset emissions.”
Professor Macintosh called for market reforms to enhance transparency. “The public should be able to see the forests that are credited,” he said.
“But more than anything else, there must be a full and independent investigation into what happened, and that investigation must have the power to compel people to testify.
“The public deserves an explanation of what happened and what can be done to ensure it doesn’t happen again.”