Response to article in the Age/SMH from 18 Sept 2024
Ambition
The World including Australia needs to urgently develop and finance ambitious, robust credible climate strategies if we are to achieve a net zero emissions economy by 2050.
Up to US$9 trillion annually will need to be invested in decarbonisation and other climate solutions to reach net zero and negative emissions, which is a very significant increase on today’s level.
This level of finance can’t be provided by governments alone. Carbon markets have an important role to play in generating the levels of private investment that will also be required.
Changes in Australia’s carbon market with business, not taxpayer leading
After almost a decade of the taxpayer supported Emission Reduction Fund being the principal climate policy, businesses are now beginning to take greater responsibility for their emissions through the Safeguard Mechanism and other compliance polices.
Business not taxpayers are now the primary purchaser of Australian Carbon Credits (ACCUs), and it is not surprising that they are investing in ACCU projects, both land based and industrial as today’s article points out. This activity highlights that policy driven decarbonisation signals are beginning to be heard.
Regulatory oversight
Australia’s carbon market, like other financial markets, has significant oversight and regulation from the Australian Securities and Investment Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC). They can and should remain vigilant about issues of market concentration to ensure the market is efficient and effective.
CMI policies
CMI is an independent member based institute for best practice in decarbonisation and market based solutions. CMI policies are developed in consultation with members, but finalised independently with Board approval. Both our Advocacy Positions and Member and Sponsorship policy urge accelerated ambition and investment to support Paris Agreement aligned decarbonisation and climate solutions towards a negative emissions, nature positive world. CMI supports appropriate regulatory oversight to help achieve this vision.
Response to article in the Age/SMH from 16 Sept 2024
Australia’s carbon market, established in 2011, is well regulated and is still evolving with continual improvements including significant reforms being implemented now after recent reviews. It is entirely appropriate and not uncommon for a regulator to work with the regulated industry but this in no way means relations are anything but independent and professional. CMI works with the CER on good governance, best practice and ensuring regulatory reforms are well understood and support emissions reductions and substantial high integrity investments.
Code of Conduct
With its depth of expertise in carbon markets, built over a decade in the industry, CMI has played an important role assisting all stakeholders with knowledge transfer and capacity building. Since 2018, we have established a world leading Carbon Industry Code of Conduct that encourages industry members to follow best practice, beyond compliance, requirements. This necessitates engagement with CER, as well as other federal and state government agencies but again in no way impacts our or regulators independence.
CMI membership
CMI is a unique member-based institute for best practice in decarbonisation and market solutions. We are not a peak group in the sense all members need to agree to our positions. CMI activities are governed by a constitution with primary objectives of supporting the transition to net zero emissions and its current strategic plan with a mission to accelerate the use of market-based solutions and support best practice in decarbonisation to limit warming to 1.5C.
CMI members include primary producers, carbon project developers, Indigenous corporations, legal, technology and advisory services, insurers, banks, investors, as well as emission-intensive industries which are developing and deploying decarbonisation and carbon credit strategies.
CMI’s policy positions are determined by its Board, in consultation with, but independent from, its members. These policy positions represent what the Board considers to be best practice and in line with CMI’s mission and do not represent any CMI individual, member company, or industry sector.
CMI and many others in Australia and around the world have been part of a critical new phase for carbon markets. One that moves from the initial phase of offsetting neutrality to one aligned with an urgent transition net zero emission economies.
This necessitates significant and accelerating investments within companies as soon as possible but in other climate solutions when this is not. Carbon markets are a vital tool in assisting this transition but require effect, high integrity as well as investible policies. We make no apology for working with government agencies and regulators to achieve this end. It is a critical to our mission and objectives that we work with government and agencies, and we will continue to do so.
Response to article in the Age/SMH from 15 Sept 2024
The Age/SMH story on Indigenous carbon highlights the significant opportunities and benefits that can be generated from Australia’s carbon market for First Nation people.
The article highlights these benefits include Indigenous land ownership, returning people to country and other health and education benefits.
This is a market that is still relatively young, and we are evolving our approach on appropriate consent, benefit sharing, governance and capability building. Some of the examples are from the early days of the carbon market and include companies no longer active. Current practices need ongoing vigilance and review and many in the industry commit significant resources to this.
CMI has worked hard to promote best practice between carbon project developers and Indigenous communities including through our world leading Carbon Industry Code of Conduct which commenced in 2018. Code signatories include around two thirds of land-based projects and they are expected to track engagement, respect free prior and informed consent requirements and to work with recognised native title consent holders.
In recent reform processes, CMI has actively supported proposals to amend current conditional consent arrangements and to engage native title claimants in approval and project management.
Getting Indigenous engagement right does and should require significant investment of resources and time. These processes and the market are heavily regulated and undergoing reform after the independent review led by former Chief Scientist Professor Ian Chubb.
Some reforms have already been implemented and there was over $10 million allocated in the last federal budget to assist Indigenous communities manage these processes. Other critical reforms require legislative amendments that are behind schedule.
CMI works hard to ensure Indigenous voices are heard in our events and processes and best practice development and promotion. We will continue that work with our Indigenous members and partners as well as the rest of the industry.
Integrity – Additional comment (18 Sept 2024)
The Independent Review of Australian Carbon Credit Units, led by Professor Ian Chubb AC, found that the ACCU regime was “sound”, and that it has “an important role to play in Australia’s pathway to net zero emissions by 2050”.
A 2024 review by the Australian National Audit Office found the administration of the issuing, compliance and contracting of ACCUs “was largely effective” and is consistent with legislative requirements and government frameworks.
It also concluded that the Clean Energy Regulator “has implemented an effective approach to ACCU scheme compliance activities”. The ANAO made only one recommendation, aimed not at the CER but the Department of Climate Change, Environment, Energy and Water.
These are important conclusions, and CMI is disappointed that they were not given more recognition in the articles.
CMI is pleased that many of the Chubb recommendations have been implemented. We will continue to press for the remaining recommendations to be implemented as soon as possible.
We will update this story as the article series unfolds.
