On 28 June 2023, the Clean Energy Regulator (CER) and Department of Climate Change Energy Environment and Water (DCCEEW) published the following statement in response to two papers by the ANU/UNSW ERF research team:

• Macintosh, A., Butler, D., Evans, M.C., Waschka, M., Ansell, D. (2023) Summary Results of Analysis of the Integrity Risk and Performance of Human-induced Regeneration (HIR) Projects using CEA data. The Australian National University, Canberra (paper 1); 1 and
• Macintosh, A., Butler, D., Larraondo, P., Waschka, M., Evans, M.C., Ansell, D. (2023) The under-performance of human-induced regeneration (HIR) projects: Analysis of misinformation disseminated by the Clean Energy Regulator. The Australian National University, Canberra (paper 2).

On 17 March 2023, the Department of Climate Change, Energy, Environment and Water’s (DCCEEW) published a paper by Professor Ian Chubb, the former Chair of the Independent Review of Australian Carbon Credit Units (ACCUs), titled, Carbon Farming: let’s get real and let’s get on with it.1 The paper focuses on the ACCU scheme and the recommendations the Review made to improve it. The essence of the argument put forward in the paper is that the ACCU scheme is robust and that the Review’s recommendations, and the scheme’s compliance and enforcement processes, will address any issues that exist with the integrity of projects and credits. Consistent with this, Professor Chubb argues ‘[w]e have to work at it, get real and get on with it’.

Carbon offsets can play a critical role in climate policy by reducing the economy-wide costs of mitigating greenhouse gas emissions and generating important social and environmental cobenefits. However, the benefits of offsets are contingent on integrity – the offsets must represent real and additional greenhouse gas abatement. There are serious integrity issues with Australia’s carbon offset scheme. Weak governance structures have resulted in deficiencies in the design and administration of the scheme. The problems with the scheme have been detailed in a series of papers published by the Australian National University (ANU) and University of New South Wales, Canberra (UNSW) Emissions Reduction Fund (ERF) research team and other groups.

The Emissions Reduction Fund’s (ERF) Human-induced Regeneration (HIR) method provides landholders with Australian carbon credit units (ACCUs) for regenerating native forests by changing land management practices. When it was originally made, the method was intended to incentivise the regeneration of native forests by allowing juvenile trees and shrubs to regrow in areas that were previously cleared. Offset projects involving the regeneration of native forests that would not have regenerated in the absence of the project, such as in previously cleared areas, are both legitimate and desirable. However, the vast majority of HIR projects are not in areas that have previously been cleared. Almost all of the current HIR projects are located in semi-arid and arid areas (less than 350 mm average annual rainfall) that have never been comprehensively cleared (Figure 1), meaning most proponents are trying to regenerate native forests in remnant native vegetation solely by reducing grazing pressure from livestock and feral animals

Earlier this year, we went public with details of serious integrity issues in Australia’s carbon market, which forms part of the Emissions Reduction Fund (ERF). One of our main concerns is with a carbon offset method known as Human-Induced Regeneration of a Permanent Even-Aged Native Forest (HIR). Our analysis suggests most of the credits issued under this method are not backed by real and additional carbon storage.

Since 2014, the centrepiece of Australia’s climate policy has been the Emissions Reduction Fund (ERF), a $4.5 billion fund that incentivises emissions reduction activities across the economy and forms the basis of Australia’s carbon market. Under the ERF, projects that reduce emissions receive credits that can be sold to the Australian Government and private entities that are required to, or that voluntarily choose to, offset their emissions.

Earlier this year, we went public with details of serious integrity issues with the ERF, labelling it ‘environmental and taxpayer fraud’. While a number of long-held concerns with the scheme exist, we have initially focused on the ERF’s most popular carbon credit methods: human-induced regeneration (HIR); avoided deforestation; and landfill gas. Our analysis suggests up to 80% of the carbon credits issued to projects under these methods lack integrity. That is, they do not represent real (emissions have not been reduced) or additional (the reduction would have happened anyway) abatement.

The Emissions Reduction Fund (ERF) is the centre-piece of the Australian Government’s climate policy. It was first introduced in 2014 and is comprised of three main elements: a carbon offset crediting scheme, which issues Australian carbon credit units (ACCUs) to projects that abate emissions; a purchasing scheme, whereby the Clean Energy Regulator (on behalf of the Australian Government) voluntarily purchases ACCUs from eligible offset projects; and the ‘Safeguard Mechanism’, which imposes emission obligations on designated large facilities that can be met through the relinquishment of ACCUs. 

The available data provide compelling evidence that the majority of the abatement credited under the Emissions Reduction Fund’s (ERF) landfill gas methods has not been additional. It appears that in the order of two-thirds of the abatement credited under the methods would have occurred in the absence of the incentive provided by the issuance of ACCUs. The non-additional abatement credited under these methods equates to approximately 19.5 million Australian carbon credit units (ACCUs), or almost 20% of the total number of ACCUs issued under the ERF to the end of 2021. These credits are likely to have been worth more than $300 million.

The natural state doctrine suggests that under UNCLOS, maritime features must be assessed in their ‘natural state’, before any artificial intervention. While this has been applied in the context of artificial island building, it could also apply to cases of artificial augmentation of features (such as, for example, desalination activities). This article examines the appropriateness of this doctrine in the context of islands, arguing an expansive application of the doctrine is both textually unsupported and practically infeasible in light of changes brought by climate change.