EDO is concerned that the increasing use of carbon offsets undermines the urgent task of reducing fossil fuel emissions to limit global warming consistent with international agreement, particularly where carbon offsets are shown to be falling short of best practice. In our submission, we raise concerns and examples of increasing corporate reliance on offsetting in lieu of actual direct emissions reduction. The Australian Government should not be relying on the Emissions Reduction Fund, or market mechanisms alone, to drive the real and genuine emissions reduction that is needed to achieve real net zero greenhouse gas emissions. The Australian Government must build on the foundations of the Climate Change Act 2022 and embed effective tools to reduce emissions across the board. With a clear legislative emissions reduction target set, there is considerable scope to design policy settings and legal mechanisms that galvanise emissions reduction across sectors, enhance adaptation, and facilitate the energy transition. Offsetting should be a last resort once emissions have been avoided and mitigated, rather than the default option used to justify continued and increasing emissions.
At a minimum, the regulatory framework for carbon offsetting should be significantly strengthened to establish clear integrity and accountability requirements including for a transparent, independent and well-resourced regulatory body; robust criteria and independent oversight to certify the legitimacy of offsetting projects; and clear limits or caps on the use of offsets. Once the significant integrity and accountability issues have been addressed, opportunities to maximise co-benefits should be explored further.