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They have dubbed the ERF an “environmental and taxpayer fraud”, saying it is riddled with governance flaws.
“Unfortunately, Australia’s carbon market currently suffers from a distinct lack of environmental integrity,” Professor Macintosh said.
He said the ERF scheme was dominated by three types of projects: avoided deforestation in western New South Wales; human-induced regeneration of native forests in the dry rangelands of Queensland, NSW, Western Australia, South Australia and the Northern Territory; and the combustion of methane from landfills.
These three projects account for about 75 per cent of ACCUs issued.
Professor Macintosh said data suggested suggests 70 to 80 per cent of the ACCUs issued to these projects did not represent “real and additional abatement”.
“All of the major emission reduction methods have serious integrity issues, either in their design or the way they are being administered,” he said.
“People are getting ACCUs for not clearing forests that were never going to be cleared; they are getting credits for growing trees that are already there; they are getting credits for growing forests in places that will never sustain permanent forests; and they are getting credits for operating electricity generators at large landfills that would have operated anyway.
“What is occurring is a fraud on the environment, a fraud on taxpayers and a fraud on unwitting private buyers of ACCUs, including private households who purchase ACCUs to offset their personal emissions.”
The ERF is administered by the Clean Energy Regulator, which has $4.5 billion to spend on ACCUs.
“The Clean Energy Regulator has already spent $1 billion on purchasing ACCUs and has contracts to purchase a further $1.6 billion,” Professor Macintosh said.
“By issuing ACCUs for these low integrity abatement projects, the regulator is throwing good money after bad and undermining Australia’s ability to meet its long-term emission reduction targets.”
Professor Macintosh and his co-authors have called for the Clean Energy Regulator to be broken up to work towards solving the issue.
The researched are also calling for “the offending low integrity methods” under the ERF to immediately end and for reforms to stop the methods from receiving any further credits.
“We are also calling for a full and independent inquiry into what has happened,” Professor Macintosh said.
“The public deserves an explanation for what has occurred and what can be done to ensure this does not happen again.”
Professor Andrew Macintosh is an expert on environmental markets who has also sat on the bushfire royal commission, chaired the Integrity Committee of the ERF for six-and-a-half years and was a member of the King Review of Low-cost Sources of Abatement.