2023 concludes in the aftermath of COP28’s mixed results, which included important markers for 2035 emission reduction targets and nationally determined contributions that will need to be developed next year and shared with the international community in early 2025.
COP decisions aren’t magical mandates and are only as good as how they are embraced by countries, companies and citizens, and then converted into meaningful policies and investment. However, the tens of thousands in Dubai, who represented the broad political, business and community spectrum, were a testament to how much they matter.
Early 2025 is also when the next Australian election is due and COP28’s historic global stocktake decision now sets clear credibility criteria for our policies – which need to include steps to reduce emissions by at least 70% by 2035.
While options continue under Article 6.2, COP28’s stalemate on carbon market governance reinforces the importance of domestic and global crediting framework reforms.
It’s been a long year since the 9 January release of Professor Chubb’s Independent Review of Australia’s carbon crediting framework, but it closes with the revamped Climate Change Authority (CCA) this week agreeing that the ACCU scheme “was fundamentally well-designed when introduced,” but could nevertheless still be improved. 2024 will see at least two important waves of ACCU reforms, with legislative changes due to emerge in the first quarter.
As a part of this process, last Friday saw the release of the first 6-monthly independent review of gateway checks for human-induced regeneration (HIR), led by ANU forestry expert Associate Professor Brack. He concluded that, on average carbon estimation areas and management changes have achieved significant growth “despite variation due to droughts and breaking droughts”. These regular reviews will be an important additional contribution to the checks and balances being added to the crediting framework which must enable scrutiny and confidence for investors and the community.
Carbon crediting and markets are a vital way of driving investment and smoothing the transition to net zero, but there is a need for across-cutting carbon market strategy. CMI champions and supports the view of the CCA that net zero plans under development next year will only be successful if crediting is “deployed wisely, and not just to displace or delay the direct reduction of emissions. Ambitious and urgent cuts to emissions are the priority”.
The enhanced Safeguard Mechanism, now in operation, sends an increasing investment signal to heavy emitters, but it is clear it will need to be deepened and broadened in a managed transition, supported by other policies that include investment support and mandatory disclosure.
While 2023 has seemed a long, and sometimes bumpy ride, it has seen important advances in the transition to a prosperous, negative emissions and nature positive world. CMI events and membership has enabled us to engage with decision makers and community in Australia, as well as in the region, through many submissions, consultations and educational initiatives.
I thank you for your support of CMI throughout the year and look forward to your ongoing engagement throughout 2024, which will be critical for accelerating investment and ambition through key reforms, alongside the hard yakka of implementing those already afoot.
Wishing you a happy and safe holiday period
Carbon Market Institute