Ian Chubb (Image: Zennie/Private Media)
(Image: Zennie/Private Media)

This is part four in a series. For the full series, go here.

Hundreds of carbon sequestration projects on uncleared land have attracted taxpayer funding and generated carbon credits since 2015 under the Emissions Reduction Fund (ERF) — despite the scientific consensus suggesting reducing grazing from uncleared land has minimal impact on woody vegetation, and thus how much carbon is sequestered.

This conflict between hard science and a program purporting to generate genuine carbon credits at taxpayer expense could be settled by verifying that human-induced regeneration (HIR) actually works, based on actual projects — the oldest of which are now well established and, if advocates are correct, supporting widespread native forest regeneration.

In fact independent third-party verification has never been a part of the ERF or of the millions of carbon credits issued based on purported HIR projects. Until recently, there has been minimal disclosure of data relating to projects benefiting from taxpayer funding by the Clean Energy Regulator (CER) — even the most basic data about projects was shielded behind legislated privacy and commercial confidentiality protections.

In response to sustained criticism of the ERF and of the integrity of large volumes of carbon credits — sparked by ANU professors Andrew Macintosh and Don Butler in 2022 — the current government commissioned Ian Chubb to lead a review of Australian carbon credit units (ACCUs). The Chubb review sided with the CER and explicitly rejected the scientific consensus — and several expert submissions — around rainfall vs withdrawing land from grazing, simply asserting that the review “does not accept that a correlation between rainfall and vegetation growth undermines the method”. It cited no literature or experts to support this, and went on to give the ACCU system a clean bill of health.

But even Chubb and his team conceded there was a lack of transparency and capacity for independent verification.

“Current restrictions on data sharing and disclosure in the scheme’s governing legislation go further than required to protect privacy and commercial-in-confidence information, and the blanket nature of these restrictions is undermining transparency, trust and confidence in the scheme,” the review concluded.

It recommended “provisions in the governing legislation should be amended to maximise transparency, data access and data sharing …”

The CER — which had previously rejected all criticism as the product of critics not having access to project data — has since released data on the location of the areas where the native forests are supposed to be regenerating, known as carbon estimation areas (CEAs). However, it immediately claimed the information couldn’t be used to assess if projects were actually sequestering any carbon — which defeated the entire point of the Chubb recommendation.

But Macintosh, Butler and their team used the newly released data cross-checked with satellite imagery of vegetation to assess how much regeneration of vegetation had actually occurred in CEAs, finding that most HIR projects had seen virtually no regeneration since the projects were registered. That study used the National Forest and Sparse Woody database, the same data the government uses to develop its national CO2 accounts.

Higher resolution landcover imagery than the National Forest and Sparse Woody database is available, but the argument that the data behind the ANU study is flawed doesn’t stack up: as one industry veteran, who preferred to remain anonymous given their role in the sector, told Crikey, the data compiled by Macintosh and Butler’s team, whatever its alleged shortcomings, should have shown some regeneration. The fact that it did not, except in a small number of projects, is deeply concerning.

So if Chubb and his review team recognised the lack of transparency and independent verification as a problem, what did the review say about verifying individual projects? Nothing. The review, perversely, refused to examine any individual projects.

That leaves HIR sceptics and scientists in a difficult position and the debate at a stalemate: the government-appointed review point-blank rejected the science around rainfall and refused to examine individual projects. The CER and the HIR proponents also continue to refuse to release any additional information to enable further independent analysis, while claiming that they have higher-resolution data that shows the projects are performing as expected.

Meantime, tens of millions of permits have been issued on the purported basis that they represent a real tonne of CO2 permanently, or at least for the long term, sequestered in woody vegetation.

Complicating the issue of verification is that HIR-derived carbon sequestration is inherently risky, especially in Australia, given its predisposition to drought. While the level of CO2 in the atmosphere and its impacts on global heating occur over centuries, HIR sequestration may last only a matter of years or decades.

As Professor Rod Fensham explained in his rejected report for the CER, and in his submission to the Chubb review, the responsiveness of mulga to rainfall has long been known. In the aftermath of the Federation drought, the Queensland Land Commission reported: “Fully 80% of the area of country comprising the Charleville district is timbered, and one-half of the timber growing on this country has been killed by the late drought.” A tonne of carbon sequestered successfully in a HIR project in 2021 might have returned to the atmosphere by 2050; the tonne of carbon emitted as its offset will be permanently in the atmosphere.

There are independent audit requirements for HIR projects, but those audits are commissioned and paid for by project proponents. As the industry veteran who spoke to Crikey said project proponents should be paying for audits, but the CER should be appointing the auditors, not farmers, project proponents or brokers with a direct interest in getting a clean bill of carbon-sequestrated health.

And the audits are confined to auditing whether projects are complying with the CER’s methodological requirements — so they are ultimately guided by the regulator’s interpretation of the rules. If the CER is misapplying the rules, even independent audits won’t make a difference.

The CER’s guidelines discourage accountability as well. The Chubb review breezily declared: “It understands that should any project under any method be found to be noncompliant, the CER would use existing provisions to address project noncompliance on a case-by-case basis.”

But the CER doesn’t conduct any checks for the first five years of a project, the veteran told Crikey. Worse, “the CER never asks for credits back when it learns that they are generated on a faulty basis” — meaning there are credits the CER knows are worthless in the ACCU system right now.

What we need, the veteran said, is a genuine independent inquiry, one that can look at key high-risk projects — the kind of inquiry that the Chubb review never was. Until then, we’re just kicking a very expensive can down the road.

Tomorrow: why the government is desperate for HIR to “work”.