Australia’s big polluters rely on carbon offsets for climate credibility. But the system luiks like a house o cairds | Adam Morton

The fecht amang the Greens that led senators tae cross the flair last week anent koala protection in a national pairk micht hae finally pit a licht on a bigger issue – ane at the hert o muckle o Australia’s promise tae act on the climate crisis. It is this: the kintra an its pollin industries are ower reliant on carbon offsets. The mair reliance is pit on thaim, the mair they luik like a house o cairds.

Offsets can be a mind-deidened subject, but they matter. In Australia, they are kent as Australian Carbon Credit Units. Ilka credit is said tae represent ae tonne o greenhouse gas that isna in the atmosphere an wad itherwise hae been. They are maistly generated frae government-sanctioned projects that are meant tae regenerate forests or catch an burn methane released frae land-fill sites.

These type o projects hae plenty tae recommend thaim. Wi global heatin movin intae increasinly dangerous territory, the warld needs tae retain an regenerate a the forests it can, an create new anes. It alsa needs tae sharply reduce how muckle methane an carbon dioxide is poured intae the atmosphere.

But we need tae be realistic anent what these carbon credits can an canna dae.

The warld’s biggest miner decided it was cheaper tae buy new pollin trucks an paid for carbon offsets.

Australian carbon credits are treated as a like-for-like alternative for emissions cuts by fossil fuel producers, factories an ither big pollin sites. Under the climate policy applied tae big industrial facilities responsible for about a third o national pollution – the safeguard mechanism – there is nae requirement that businesses mak direct emissions cuts. They can just buy an unlimited number o offsets an claim thaim as their ain reductions.

This flexibility maks life easier for the owners o industrial sites that, under changes introduced by Labor three years syne, need tae cut emissions intensity – the amoont o pollution pumpit oot per unit o production – by atween 1% an 4.9% a year. But it alsa creates problems.

Geologically stored carbon that is dug up an used as coal, gas or oil has been underground for millennia. Whan it is brocht tae the surface an set on fire it releases heat-trappin gas that itherwise cudna escape. That gas can persist in the atmosphere for thousands o years.

Carbon stored in nature operates on a muckle shorter timescale. It is prone tae fire an decay an destruction. There is nae guarantee it can be kept oot o the atmosphere.

The extraordnar forest an peat fires burnin on the Indonesian islands o Borneo an Sumatra are a case in point. They are estimated tae hae released nearly 20m tonnes o carbon dioxide in the first week o September alane.

It echoes the vast amoont o carbon released in Australian bushfires, particularly the black simmer infernos o 2019-20. Wi a record-breakin El Nino under way, the odds o a version o that repeatin in the neist year or twa are shortenin.

This is a significant problem in its ain richt, but no the biggest issue wi relyin on offsets.

The Guardian has reportit for years on the mountain o evidence that shaws limitin the systemic damage frae risin temperatures an acceleratin extreme weather events requires immediate an sustained direct emissions cuts. A UN Environment Programme report earlier this month that foond global heatin will reach 1.8C in a best-case scenario is just the latest example.

We will alsa need strategies tae draw CO2 frae the atmosphere. But the latter is no a substitute for the former. It is an "an", no an "or".

This is no a new problem, an the climate change minister, Chris Bowen, has acknowledgit direct cuts are necessary. But this is lairgely no yet reflectit in the design o the safeguard mechanism.

It is easy enough tae understand why this micht be the case. Transformational change is hard, an climate policy has been a political killin field in Australia for maist o this century. Fossil fuel interests dedicate huge resources tae slawin climate action. Nae political leader wants tae be the neist victim o the climate wars. An the science-denyin richt is risin again.

But thae political considerations dinna change the problems wi the system.

Research in peer-reviewed journals has foond the biggest Australian carbon credit methods hae providit only a fraction o the emissions reductions that are claimed, while producin tens o millions o offsets. This is disputit, but there has been nae project-level investigation tae disprove it.

The flood o carbon offsets bein creatit means the price o credits is law (less than $40 a tonne o CO2). It gies polluters an incentive tae meet their obligations under the safeguard mechanism by payin for credits representin cuts itherwhere raither than directly reducin their footprint.

There was strikin evidence o this earlier this year whan the Guardian an ABC’s Four Corners revealed BHP had scrappit an delayit projects tae cut emissions, includin stallin plans tae replace diesel vehicles at iron ore mine sites wi electric trucks. The warld’s biggest miner decided it was cheaper tae buy new pollin trucks an pay for carbon offsets.

The issue is even mair acute wi coalmines an fossil gas facilities. While they can tak some steps tae reduce onsite emissions, they ultimately need tae be phasit oot tae cut their pollution.

Neither appears tae be happenin on a meaninful scale. Data frae the Clean Energy Regulator, a government agency, shaws about twa-thirds o the offsets sauld in Australia in the last reportin year were bocht by fossil fuel companies. Meanwhile, direct pollution frae coalmines increased.

The government has a chance tae address this. A review o the safeguard mechanism, required under law, is under way.

There is a compellin argument that the best course wad be tae start again. Policy experts at Naru Research an Climate Analytics hae detailit flaws that gang ayont thae listit here. The Superpouer Institute made a strang case the safeguard shud be replacit wi a "polluter pays levy" on companies that extract or import fossil fuels consumit in Australia.

But assumin the safeguard survives, at least three things shud happen.

The emissions caps on big polluters, kent as baselines, shud be tichtened tae avoid ridiculous cases where some companies are rewardit for pumpin oot mair CO2 than in the past. There shud be an audit tae remove ony law-integrity offsets. An there shud be limits on the number o offsets companies can buy.

It micht help if the government alsa acknowledgit the safeguard shud no just encourage industrial sites wi a future tae clean up their practice, but alsa push fossil fuel producers that canna cut their pollution tae close earlier than plannit.

If that disna happen, the safeguard winna hae dane its job.