Extract from ABC News
Analysis
The video features a vast property outside Cobar in far western NSW, and a salt of the earth grazier.
He has another source of income apart from his sheep: carbon farming, which is now a multi-billion dollar industry.
The video is part of a suite of promotional flicks that appear on the website of the Clean Energy Regulator, and on YouTube, designed to encourage landholders and businesses to get involved in projects under the government's Emissions Reduction Fund that are meant to offset greenhouse gas emissions.
In the video from Cobar the topic is "avoided deforestation" – a scheme that pays landholders, in the form of carbon credits, for not chopping down trees they have permits to clear — and the grazier and carbon farmer is happy to spruik its virtues.
He doesn't mention that he used the money he earned from carbon credits to buy a neighbouring property and clear land on that, an inconvenient fact he revealed to the ABC's Background Briefing program last year.
Perfectly permissible conduct, although it seems to sit a little oddly with the purpose of these ventures.
Carbon-offset schemes under the government's Emissions Reduction Fund have been mired in controversy since an investigation by ABC's 7.30 program last week, in which a whistleblower — who used to head a government body vetting the integrity of these programs — labelled them a rort and a sham.
The Clean Energy Regulator has rejected the allegations as completely false — as has the lobby group for the industry, the Carbon Market Institute, which described the allegations as "sensationalised" claims that "risk undermining a world-leading framework for carbon credit generation".
Regulator also industry's main customer
Whatever the merits of the allegations, they've put the spotlight on the industry and the regulator that oversees it, which has an unusual relationship with the market it regulates.
The Clean Energy Regulator produced the videos promoting the carbon-offset schemes in collaboration with the Carbon Market Institute. They feature executives of companies that make millions out of the market.
Is it normal practice for a regulator to team up with a lobby group to promote the industry and the companies it is meant to police?
Not in this reporter's experience.
It's a reflection of the peculiar role that the Clean Energy Regulator plays in the market — and the many hats it wears.
It has to approve the carbon-farming projects, ensure they comply with the rules, issue carbon credits to the projects, then buy carbon credits back from the projects on behalf of the government.
That makes the regulator by far the main customer of the industry it regulates.
On top of that, it develops the rules, or "methods", for the projects — which are meant to adhere to strict integrity standards — yet it's also obliged to buy the carbon credits as cheaply as possible.
"It's a textbook example of poor governance," says ANU law professor Andrew Macintosh, who recently made explosive claims about a lack of integrity in Australia's main carbon-offset schemes.
The Climate Change Authority — a statutory authority that advises the government — has also criticised the "real and perceived conflicts of interest that arise" from the Clean Energy Regulator's multiple functions, and recommended that its performance be reviewed by the Australian National Audit Office.
However, the Clean Energy Regulator reckons it has "well-established and rigorous" processes for managing these potential conflicts of interest, including separate senior executives responsible for its different areas. It certainly needs to.
It's fair to say that the regulator is not alone: In Australia's carbon market, potential conflicts of interest abound.
A company called Green Collar also features in that Cobar video.
It is the largest of an array of businesses that market carbon-farming schemes and — for a significant cut of the carbon credits — helps farmers get them registered and ensures they comply.
Green Collar has attracted big money from overseas investors and is now worth a fortune.
Its chairman is the former Origin Energy boss and Business Council president Grant King, who also chairs the Climate Change Authority, which has the job of reviewing the carbon-farming initiatives and advising the government.
As one would expect, the Climate Change Authority told the ABC it has policies and procedures to manage such "actual or perceived conflicts of interest, including a register of interests which is regularly updated".
There is no suggestion Grant King has done anything wrong. However, managing such tensions involves difficult judgements: One person's expert is another's vested interest.
There's a fierce debate about how institutions appointed to oversee and vet the carbon-offset programs deal with some conflicts that inevitably arise.
Former energy lobbyist chairs regulator
Last week, the Australia Institute released a report raising potential conflicts of interest faced by members of another watchdog for the carbon market — the Emissions Reduction Assurance Committee or ERAC.
ERAC vets the rules for the various carbon-reduction schemes and is tasked with maintaining their integrity.
By law, members of this integrity committee "must not engage in any paid employment that conflicts or may conflict with the proper performance of his or her duties".
It's chaired by David Byers, a former lobbyist who spent most of his career pushing the interests of the mining, oil and gas industries.
He has previously been interim chief executive and deputy chief executive of coal lobby group Minerals Council of Australia, chief executive of the oil and gas industry association APPEA, and has worked in government relations for Exxon and BHP.
When Minister for Energy and Emissions Reduction Angus Taylor appointed him to the ERAC in June, 2020, Mr Byers was chief executive of the research and promotional body for the carbon capture and storage industry, the C02CRC.
He continued in that role until August last year, then stayed on until November as a part-time advisor.
Mr Taylor bristles at suggestions that it was inappropriate to appoint a veteran fossil-fuel industry lobbyist to the integrity committee for the carbon-offset schemes.
"Expertise is not a conflict of interest," he told the ABC.
Now, there's a dispute about which hat David Byers was wearing, industry lobbyist or watchdog, when he attended a workshop the Clean Energy Regulator convened to start designing the rules — or method, as it's known — for the Emission Reduction Fund's carbon capture and storage scheme.
Emails and other documents obtained under freedom of information suggest that Mr Byers was invited to attend in his role with the carbon capture and storage industry group.
They show that he accepted the invitation from his private sector email addresses, using his private sector position title, with no mention of the ERAC.
However, Mr Byers insists that he attended in his role with the integrity body, although this is not how he is described in the list of attendees.
In any case, he says his involvement did not involve any conflict of interest.
"There is no conflict in being able to contribute knowledge to a process," he told the ABC.
"I understood a lot about the oil and gas industry and the fossil fuels industry. It's actually a benefit to have people [with industry knowledge] who are providing information into the process.
"The point at which conflicts of interest come in is at the point of making a decision and the deliberations leading up to making a decision.
"But it was initial co-design workshop, it had nothing to do with the decision-making process on the method."
The Australia Institute's climate and energy program director, Richie Merzian, has a very different view.
"It is an untenable conflict of interest," he says.
"He should have been removed from the process from day one.
Conflict of interest debate
The report raises similar concerns about another ERAC member, the chief executive of the Cement Industry Federation, Margie Thomson.
Cement production is one of the biggest greenhouse gas-emitting industries in the world and has been cited by the government as a sector that could benefit from carbon capture and storage.
Material released under freedom of information shows that Ms Thomson replied to the regulator's invitation from her email address at the cement industry lobby group using her title as its chief executive, with no mention of the ERAC.
However, she says, she attended the workshop as a member of the integrity committee — not on behalf of her industry — and rang the Clean Energy Regulator to clarify that.
A manifest of attendees lists her as being from both "The Cement Industry Federation and the Emissions Reduction Assurance Committee".
Ms Thomson describes this as "a bureaucratic error".
When the ERAC met to consider the Carbon Capture and Storage method and whether to endorse it, Mr Byers did step aside, citing a conflict of interest.
Margie Thomson did not, a decision supported by the committee.
"We don't have any commercial [carbon capture and storage] projects at the moment anywhere in the cement industry," she told the ABC.
"There are hopes to have at least 10 plants in the world with CCS in the next year.
"But the opportunity to have the technology commercialised in Australia in the next 10 years is close to zero, so there was no conflict of interest.
"That is how long the regulations [on the carbon capture and storage method] last, so I knew none of my members would have a project within that time frame."
Richie Merzian rejects this.
"That's quite a convenient calculation," he says.
"CCS has been in the works for a very long time. If you talk to some proponents, it's always around the corner.
"The government is prioritising this as a top priority in its technology roadmap — it's the hard to abate sectors such as the cement industry that are the ones who stand to benefit."
Ms Thomson could not be accused, however, of being blasé about the issue of conflicts of interest.
She stood aside from decisions on another emissions-reduction method and has flagged a series of further potential conflicts.
Mr Byers stresses that ERAC's members are committed to maintaining the integrity of the schemes Australia is relying on to offset carbon emissions.
But decisions about the complex and often technical rules that govern these schemes are nuanced.
How best to interpret them, or to weigh up claims by vested interests, is rarely clear-cut. Different people may take different approaches, depending on their worldview.
Mr Taylor advocates for a "gas-led recovery" and wants the gas industry to expand, rather than shrink, in the face of concerns about fossil fuels and global warming.
With growing pressure from investors and financiers to offset its carbon emissions, the only way the industry can do so is by having carbon offsets available — lots of them.
In most markets, there is a tension between quality and quantity of output.
The carbon market is no exception.
It's critical — for Australia's efforts to combat global warming — that the emissions-reduction methods have high integrity and the offsets deliver.
If they do not, we will have the worst of both worlds: businesses maintaining or increasing their emissions on the basis of offsetting reductions that are hollow.
No comments:
Post a Comment