Why integrity in carbon markets is vital
As a veteran of carbon markets I thought it timely to provide some observations and comments around the opinions and media relating to carbon markets in Australia.
Over 20 years ago I began my career in carbon markets by auditing carbon footprinting and carbon neutral claims. My career was dramatically shaped by my lead role in guiding the Independent and Regulatory Pricing Tribunal of NSW (IPART) in the establishment of the first legislated carbon market in the world. I was charged with establishing integrity in methods, project development, audit, registries and credit issuance. As such, integrity is core to my professional DNA and I know no other way. I participated as a Director of the Cooperative Research Centre for Greenhouse Accounting which brought together all of the best scientific research in Australia on greenhouse accounting and abatement methods.
For the following 10 years I led the largest carbon project development company in the Southern Hemisphere establishing carbon projects in Australia, New Zealand and Vietnam.
I have been involved in all aspects of carbon markets and schemes across the globe. And so I have a deep understanding of their strengths, weaknesses, benefits and flaws.
Building upon this market knowledge, Tasman Environmental Markets (TEM) was established in 2014 to support companies and individuals in their journey to carbon neutrality and net zero emissions. The market is complex, confusing, ever changing and difficult for organisations to navigate. TEM was built and continues to be focused solely on supporting our customers to be confident that their offsetting has integrity, impact, value and purpose. As more and more service providers and companies enter this market, the principles of integrity have never been more important.
So let me make some observations:
Price does not equal value or quality
One of the most repeated myths by market commentators is that low cost credits are of poorer quality. This is simply not true. Having developed and visited many projects across the globe, some of the highest impact projects I have ever visited have produced some of the cheapest credits. Ever since the European Carbon Market stop allowing certified emission credits into their scheme, the market for these credit types dried up and the price dropped. Simple market economics. Many of these projects were transferred into the Voluntary Carbon Market in an attempt to secure ongoing commercial viability. In recent years and especially over the past year, some of these prices have increased over 500%. Same projects, same credits but more demand. Surprise surprise, the price goes up.
International credits are not of poorer quality to Australian credits
This is a highly contestable point and presumes that international regulatory standards (eg Gold Standard and Verra for example) have a lower methodology and audit standard to the Clean Energy Regulator. There is no evidence to support this claim and is typically a throw away line. TEM undertakes stringent due diligence processes to ensure offset integrity.
Integrity is vital
Not all carbon projects are equal. The social and environmental benefits of different abatement methods and projects vary. As such the appetite and price for these projects can be much higher than pure abatement.
TEM sometimes loses out to winning new customers due to price. We are totally comfortable with this outcome. We go the extra mile to deeply dive into project and scheme integrity. This takes time and resources. We are proud of our services to our customers and we ensure that their reputation for committing to carbon offsetting is protected.
Most critically, carbon offsetting is core to meeting the challenge of avoiding catastrophic climate change. We must abate and sequester carbon and we need to absolutely accelerate our actions. Carbon removals (sequestration) has taken on an additional benefit in recent years as scientists have stressed the importance of accelerating removals of historic emissions in the decarbonisation of our economies. Corporations, consumers and individuals are core to this challenge and we must gain and secure their confidence that these actions make a difference.
TEM stands at the forefront of this challenge.