Majority of nation's carbon credits 'devoid of integrity': whistleblower

Professor Andrew Macintosh, who spent six years years advising the government as the Emissions Reduction Assurance Committee chair, said the situation had "tipped into the absurd", with revegetation projects planned in the desert south of Alice Springs or the far west of NSW and Queensland, in areas that are "ecologically incapable" of supporting forests.

Backed by a series of Australian National University research papers, Prof Macintosh outlined the systematic flaws in the system and laid the blame at the feet of the Clean Energy Regulator for allowing the Emission Reduction Fund methodologies to be applied incorrectly, such as including mature forests in revegetation projects.

"All of the major emission reduction methods have serious integrity issues, either in their design or the way they are being administered," Prof Macintosh said.

"People are getting Australian Carbon Credit Units [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."

Prof Macintosh said 75pc of ACCUs came from three types of carbon projects - avoiding deforestation in western NSW, human-induced regeneration of native forests and the combustion of methane from landfills.

"The available data suggests 70 to 80 per cent of the ACCUs issued to these projects are devoid of integrity - they do not represent real and additional abatement," Professor Macintosh said.

One of the studies found roughly 50pc of human-induced regeneration projects analysed in NSW and Queensland experienced a decline in the amount of forest cover within their project area, yet were compensated with 8.2 million ACCUs worth about $200m.

The overall increase in forest coverage was also "negligible", but despite forest coverage "barely increasing", the projects accrued almost 17.5 million ACCUs.

"In colloquial terms, proponents are being issued ACCUs for growing trees that were already there when the projects started," the report stated.

Historic land clearing rates would have to increase by at least 750pc to 800pc to accurately reflect the number of credits distributed for projects avoiding deforestation.

The status of the system was so poor a side industry had emerged, Prof Macintosh said, dedicated to verifying the integrity of ACCUs for the private sector, so businesses could be sure the credits represented real carbon abatement.

"If that isn't a damning indictment, I don't know what is," he said.

"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.

To address the issues, Prof Macintosh and his co-authors say low-integrity methods and projects need to be repealed, the ERF must be made more transparent and the CER should be broken up.

However, Emissions Reduction Minister Angus Taylor said Prof Macintosh signed off the methods he now claimed were lacking integrity while advising the government.

"Is Prof Macintosh now suggesting he provided flawed advice to successive Commonwealth cabinet ministers?" Mr Taylor said.

Prof Macintosh said although it was the committee who provided advice to the government, not himself as an individual, he was happy to be "the fall guy" if it meant the issues were fixed.

"There were bad calls made and poor advice was given, I should have done more to ensure different decisions were made - I was chair so ultimately it was my responsibility," Prof Macintosh said.

"I fought hard internally in order to make the best decisions possible, and after I left I engaged with as many people as possible about the need to raise integrity standards.

"After two engaging for two years, it's clear there is no interest in looking for solutions. Working inside the tent wasn't working, which is why I've been compelled to come forward."

The CER has already spent $1 billion on purchasing ACCUs and has contracts to purchase a further $1.6 billion.

CER said it was aware of Prof Macintosh's claims but had not had time to review his studies.

"All ERF projects have a high degree of assessment and we do not believe this assertion to be true," a CER spokesperson said.

"The CER will carefully analyse the material in Prof Macintosh's work now that it has become available."

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