- Carbon offsets will be an essential component of Australia’s net-zero emissions target, but they must not be exploited as an excuse to postpone emission reductions
- Policies that encourage Australia to reach net zero emissions by 2050 can be more ambitious and less expensive if they include offsetting, a Grattan Institute report says
- The report recommended the Federal Government prohibit double-counting of offsetting activities occurring in Australia used to offset emissions that occur elsewhere
- A Carbon Market Institute (CMI) survey found 78 per cent of respondents agreed that voluntary offsetting of emissions by organisations should be undertaken only alongside direct decarbonisation activities
Carbon offsets will be an important element of Australia’s goal for net zero emissions, but they must not be used as an excuse to put off lowering emissions, according to a recent Grattan Institute report.
The report argues that in order to achieve net zero emissions, offsetting will be necessary since there will be emissions that we cannot eradicate and will not be prepared to pay the price to do so.
To cope with these emissions, the only alternative is to intentionally remove carbon dioxide from the environment.
Grattan Institute Energy and Climate Change program director Tony Wood said net zero without offsetting made no sense as it would leave no room for any activity that produced emissions.
Permanent carbon dioxide removal processes are either unclear, costly or both, the report noted. These include carbon capture and storage methods. However policies that encourage Australia to reach net zero emissions by 2050 can be more ambitious and less expensive if they incorporate offsetting.
The report said Australia’s governments should be explicit about the role of offsetting in each policy they undertook to achieve net zero emissions. This could be done bye taking an ‘avoid emissions first’ strategy, establishing clear guidelines, upholding high standards of honesty and explaining why offsetting is required.
As regulations begin to drive demand for offsetting, governments should pull back from being the primary purchasers of offsetting units and instead focus on funding the development of carbon-dioxide-removal technologies and practices, according to the report.
The report recommended that the Federal Government enact regulations to prohibit double-counting of offsetting activities that occur in Australia and are also used to offset emissions that occur elsewhere.
The Carbon Market Institute’s (CMI) annual Australian Climate Policy Survey of 400 respondents, including C-suite executives and senior managers from Australia’s biggest emitters, found that 88 per cent of respondents believe Australia should set an economy-wide zero net emissions target by 2050.
The survey found that 78 per cent agreed that voluntary offsetting of emissions by organisations should be undertaken only alongside direct decarbonisation activities that avoid and reduce emissions.
“Business is already leading the way, and the policy architecture for boosting ambition and opportunities is there waiting for the federal government to step up,” CMI CEO John Connor said.
“It is crystal clear that business wants the policy uncertainty and climate culture wars to end, and is ready to embrace the global opportunities of the inevitable transition to net zero emissions.”