- by Eileen Whitehead
- The Guardian
- Issue #2003
Photo: John Spencer CC BY-NC 4.0
The Emissions Reduction Fund (ERF) has spent more than one billion dollars of public money on projects which do not have a chance in hell of reducing net emissions. Money-spinning schemes – called carbon credits – have yielded zilch environmental benefit. Credits for growing trees already in situ; credits for operating electricity generators at large landfills that operated there anyway!
The Clean Energy Regulator (CER) which administers the ERF is a disgrace and needs urgent reform. Professor Andrew Macintosh, a foremost expert on environmental law and policy and director of research at the ANU law school, used to be the chair of a body called the Emissions Reduction Assurance Committee (ERAC), which originally advised on the “integrity standards” relating to projects set up through the ERF. In his own words, “the ERF amounts to a fraud against both the environment and the taxpayers.” The design of the scheme has left loopholes which have been exploited by carbon traders and some farmers, but the government has resisted admitting to them.
He accuses Angus Taylor and the LNP government of greenwashing. They create millions of carbon credits “of dubious integrity” which are then sold to big carbon polluters, such as fossil fuel companies, who then claim them as offsets against their emissions.
Hopefully, the Greens will follow up on their promise to push for an investigation by the federal auditor-general.
The bulk of the scam lies in the functioning of Australian carbon credit units (ACCUs) which the government issues through the ERF, as payments for projects either avoiding emissions or sequestering carbon dioxide in trees, soil and geological formations. ACCUs are bought back by the CER for approx. $12 each and sold on through the Australian carbon market to the big polluters, meeting mandatory emission liabilities and to corporations wanting to voluntarily offset their emissions.
The CER has a budget of $4.5 billion for this and although there are many various methods by which ACCUs are generated, three project types actually account for seventy-five per cent of the ACCUs issued under the ERF. These are 1) avoiding deforestation – not cutting down trees; 2) human-induced regeneration (HIR) – restocking of cleared land; and 3) proponents harvesting methane from large landfill sites and burning it to create electricity.
Macintosh sees major flaws in all three. The NSW government had issued permits allowing landholders to clear about five million hectares before the ERF began operation in 2014. This clearing was physically impossible but didn’t stop farmers with no intention of clearing their land from collecting credits worth almost $250,000 for doing precisely nothing. It’s of no benefit in reducing global warming.
To prevent clearing and destocking and allow regrowth, farmers simply moved stock into areas never previously cleared. Livestock had little impact on tree cover, lack of rainfall did. 119 projects in NSW analysed showed little difference in forest cover, yet they received approximately “8-8.5 million carbon credits.” New projects to grow new forests by reducing grazing pressure included one south of Alice Springs, which is ridiculous. A recent CER-initiated report has failed to shed any light on land management data and needs further investigation.
On the question of landfill, the 20 largest receive more than half of all the waste to be buried and use the methane generated by the rotting waste to manufacture electricity, for which they accrue approx 20 million ACCUs (seventy per cent of credits issued). What they do is admirable but does not explain why operators are receiving over $200 million for this. The ERF is solely there to reward carbon savings which these projects do not achieve. Macintosh points out the operators already had generators working before the scheme began, saying “Those large projects are fully financially viable without the carbon credits.” As chair of the integrity committee in 2018, he advised the government likewise, but Angus Taylor and company have allowed these projects a further five years of credits. Why, one asks? And at what enormous cost to taxpayers? Taylor’s decision to release ACCU holders from their contracts to sell them back to the government (to sell into a secondary market) sees an enormous transfer of value out of the public sector to private project developers, which Oliver Yates (former head of ARENA) reckons transfers $3,5 billion into private hands.
Mackintosh states that the CER “currently makes the methods, staffs the integrity committee, enforces the methods, and buys the ACCUs on behalf of the Australia government. It is conflicted and has too much power and its functions need to be distributed to other agencies.” This conflict of interest has also been exposed by the Australian Institute.
It is very interesting to see who are the current members of the ERAC (all appointed by Taylor since 2020) – Chair David Byers, former senior executive at the Minerals Council of Australia, BHP and the Australian Petroleum Production and Exploration Association; Brian Fisher, former head of the Australian Bureau of Agricultural and Resource Economics and frequent consultant to the fossil fuel industry; Margaret Thomson, chief executive of the Cement Industry Federation, and Allison Hortle, a petroleum hydrogeologist at the CSIRO.
These people are responsible for the integrity of the government’s key program combatting climate change and much of their work involves the polluting industries which employed them in the past. Why has so little of government expenditure gone to projects that actually reduce emissions? Sounds like Scott Ludlam and associates have got it right: it’s a case of State Capture.