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RUBY:

From Schwartz Media, I’m Ruby Jones. This is 7am.

Australia's pledge to achieve net zero carbon emissions rests in part on the success of the federal government’s carbon market.

But explosive claims from a former head of the government’s integrity body show almost all the money spent on emissions reduction has gone to projects that did not contribute to reductions.

Today, national correspondent for The Saturday Paper Mike Seccombe on the man blowing the whistle on the Morrison government’s sham carbon projects.

It’s Friday, April 1.

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RUBY:

Mike, the person at the centre of this story is a man called Andrew McIntosh. So who is the and what makes him important to this story?

MIKE:

Well, he's a professor of law at the ANU, and he's one of Australia's foremost experts on environmental law.

Archival Tape -- Andrew Macintosh:

“I got appointed as a commissioner on the Bushfires Royal Commission, I left…”

MIKE:

And he's held many jobs over the years, lots of positions relating to climate change.

Archival Tape -- Andrew Macintosh:

“I was on the Climate Change Authority and I was one of the four members of the King review.”

MIKE:

He was the principal author of a government commissioned review of the Emissions Reduction Fund a couple of years ago.

Archival Tape -- Andrew Macintosh:

“Now full disclosure I was the chair of the Domestic Offsets Integrity Committee that I chaired the interim…”

MIKE:

But the job of his that's most relevant to your question and to my story was that for six and a half years, he was chair of a body called the Emissions Reduction Assurance Committee.

Archival Tape -- Andrew Macintosh:

“That committee is meant to give its its opinion on whether the method satisfies the integrity standards, and it gives that opinion to the minister. If they say it doesn't mean it can't, then the method can't be made. Then the minister…”

MIKE:

Which is basically charged with advising on the integrity standards in quotes that that's what they use. The integrity standards of projects that the government awards credits for carbon abatement - and ultimately gives them lots of money to - for emissions reduction. And so that's what makes him important to this story, because he came out last week and said that this whole process, this whole carbon market was essentially a sham.

RUBY:

Right. So the person who was responsible for the carbon markets integrity for seven years is now saying that he thinks it's a sham.

MIKE:

That's right.

And McIntosh concedes himself that he is somewhat implicated.

Archival Tape -- Andrew Macintosh:

“I'm implicated in this. There’s a back story…”

MIKE:

He says that early in the process, there were mistakes made in the design of the scheme that left loopholes that were exploited by carbon traders and others.

Archival Tape -- Andrew Macintosh:

“A bunch of mistakes were made in the early days when these were identified. Nobody wanted to fess up to them”

MIKE:

But those mistakes were identified. The trouble was that then the government resisted acknowledging and fixing

Archival Tape -- Andrew Macintosh:

“and then in the recent years, then things of escalated again beyond a simple cover up to what I suggest more an overt distortion of the scheme.”

MIKE:

And he says it's gotten worse over recent times that what might have been oversights, you know, in the beginning, have since become deliberate attempts to distort how carbon trading market works. So McIntosh also has a whole lot of data to back this up.

Archival Tape -- Andrew Macintosh:

“The evidence suggests that around 70 to 80 percent of the credits are either not real. They’re not backed by real abatement, or they're not backed by additional abatement.”

MIKE:

And he's done this huge this enormous analysis of all the government money spent on carbon abatement schemes. And he found that somewhere between 70 and 80 per cent, roughly three quarters of projects, that were awarded these lucrative carbon credits by the government, yielded no environmental benefit.

RUBY:

Right. So no benefit at all. For the majority of these projects that awarded carbon credits, they didn't add to carbon reductions.

MIKE:

That's right. That's exactly right and incredible, though it seems they were either projects that did not actually reduce emissions or projects that didn't reduce emissions, but that we're going to happen anyway without any need for the government to to subsidise or pay them so all up. McIntosh reckons more than a billion dollars has been wasted by the government on these sham carbon projects.

And so he's calling for the agency responsible, the clean energy regulator, to be broken up. He says there also needs to be immediate reform of the methodology under which these carbon credits are issued. He says we should repeal hundreds of millions of dollars worth of low integrity credits that are already contracted…

…and he believes there needs to be an independent enquiry into the operation of the whole emission reduction fund.

Macintosh says Energy Minister Angus Taylor and the government are engaged in a massive greenwashing exercise, creating millions of carbon credits of dubious integrity that can then be sold on to big carbon polluters, particularly fossil fuel companies, and then can be claimed as offsets against their emissions.

RUBY:

We'll be back after this.

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RUBY:

Mike, we're talking about the Australian carbon market, and you're saying that three quarters of all carbon abatement paid for by the government is going to these sham projects, and more than a billion dollars has been spent on these projects. So how does that work? How is that possible?

MIKE:

Well, there are three main tricks, I guess you would say here. The first is called ‘avoided deforestation’, which simply means not cutting down trees. So more than 20 million carbon credits have been issued under this part of the scheme.

And the background to it is that over a decade or more in New South Wales, the government issued a massive number of permits to clear land to landholders on the assumption that most of those would never be used, right, that farmers could just have them in their back pockets in case they needed them.

They issued so many that, you know, at the current rate of land clearing, it would have taken 1600 years or something to clear the amount of land that was under these permits. But the federal government came along and assumed that all these permits would be actioned and would be actioned within the next 15 years.

And so they started handing out massive numbers of carbon credits to farmers for not cutting down these trees that they probably weren't going to cut down in in any case.

Archival Tape -- Andrew Macintosh:

“It appears that the vast majority of the forests that are being protected through the projects would have never been cleared anyway.”

MIKE:

You know, apart from the fact that most farmers didn't want to clear the land as McIntosh says, it just wouldn't be possible.

Archival Tape -- Andrew Macintosh:

“I mean, there’s just simply not enough bulldozers to do the job, right? You couldn't. You just couldn't do it.

Given the data shows this, how could this method satisfy the office integrity standards?”

RUBY:

OK. And so that's I suppose, part one. Mike, so what are the other tricks here?

MIKE:

Well, the second loophole relates to something called human induced regeneration.

Another 28 million carbon credits have been issued for this method, and according to Mackintosh, the method was designed to encourage landholders to stop clearing and to remove livestock from cleared land so that it could regrow.

The loophole there was that aggregators realised they could register land where there already wasn't much in the way of trees growing and never had been.

Archival Tape -- Andrew Macintosh:

“They noticed the loopholes. Rather than targeting those areas where the forest had previously been cleared, they headed out into the dry, more desert like range land areas…”

MIKE:

And the claim was that the reason there were no trees was because they were being grazed off by livestock and that if they just took the livestock off, the trees would regrow.

The problem here is that studies by ecologists casts really serious doubt on this. They concluded that in these very dry areas, livestock grazing had little or no impact on tree cover. That the reason trees were sparse was simply because there wasn't much in the way of rain.

Archival Tape -- Andrew Macintosh:

“We've used satellite imagery and tracked the changes in weed cover on these projects. Roughly half of them in those in the project areas have experienced either no change in forest cover or a decrease in forest cover since they started. And yet those projects have received eight to eight and a half million carbon credits.”

MIKE:

So in other words, once again, they are getting credits for allegedly growing trees in areas where they never were any and where they probably will never be any.

RUBY:

Right and so what about the the third loophole? Mike, you said there were three in total, yes.

MIKE:

And this is this is perhaps the most damning. In a way, this involves proponents harvesting methane, which is a far more potent greenhouse gas than carbon dioxide, and they harvested from large landfill sites and burn it to create electricity. So the biggest 20 landfills in Australia received more than half of all the waste that is buried in this country. And what they do is they harvest the gas that is generated by that rotting waste and they burn it. So they've also received 20 odd million carbon credits.

And the truth is, these projects are good. They do cut carbon, but they were viable before the market was set up. Many of these landfill sites already had generators on them before this whole scheme came into operation.

So funding them in this way doesn't actually add to emissions reduction because the reduction was already happening. It's essentially paying someone for an activity that is already a profit generating activity.

Archival Tape -- Andrew Macintosh:

“And to add a bit more to that story in 2018, when I was the chair of the committee, the integrity committee, we decided that those projects should not receive any more credits.”

MIKE:

And back in 2018, the integrity committee under Mackintosh, actually formally advised government that these projects should not receive any more credits beyond the current round. But last year, Angus Taylor and his people instead extended this part of the scheme for another five years,

Archival Tape -- Andrew Macintosh:

“And Angus Taylor has just made a new method to allow for all those projects to get another five years…”

MIKE:

Which really shows you how he and the government approached this whole scheme.

RUBY:

Right, OK. And I suppose that's kind of the point, Mike. The government is spending all of this money on what is a sham abatement, and they know it's a sham. They've been told by their own integrity committee that they should stop doing it, but they're not. They're instead continuing to allow it.

MIKE:

And more than that, in the past couple of years, Angus Taylor has moved to appoint senior people from the oil and gas industry and the mining industry into many of the key roles on the various boards that monitor and manage these schemes.

RUBY:

Right. And so why is that like, why does the government let the scheme run like this, which is wasting money and not really helping to cut greenhouse gases?

MIKE:

Well, in a nutshell, because they're dancing to the tune of the fossil fuel industry, particularly the gas industry and other big greenhouse polluters.

I mean, the essence of it here is that those big polluters are coming under ever increasing pressure from investors, from consumers, from more enlightened governments than our federal government, to respond to the climate crisis. And they can do this in a couple of ways: one is by actually emitting less greenhouse gas, you know, improving their technologies and what have you. But the other is by offsetting their emissions…

…by acquiring carbon credits earned by others who have reduced their carbon emissions by, you know, sequestering it in trees or underground or in the soil or, you know, burning off methane like those landfills. So they can offset their emissions by buying credits from other people who have done the work.

So you can think of offsets here as…as a commodity that can be traded or maybe the currency, the, you know, the currency of emissions reduction. But the system relies on that currency having integrity.

And what McIntosh and others are saying is that the credits being put out there by the federal government do not have integrity; they're not real money, they are, you know, if you like counterfeit currency. So, you know, I think that's the guts of it. This is…this is the government trading in counterfeit currency.

RUBY:

Mike, thank you so much for your time.

MIKE:

My pleasure, thank you.

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RUBY:

Also in the news today…

Thousands of nurses have participated in a strike in NSW marching through Sydney’s CBD protesting work conditions and wages.

The Nurses and Midwives Association are in an ongoing dispute with the state government demanding fixed nurse-to-patient ratios on wards and an increase in pay.

Nurses held signs that reades "We are not coping" as they congregated outside the Supreme Court on Thursday.

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And, the head of Britain’s cyber spy agency says new intelligence shows Russian soldiers in Ukraine are refusing to carry out their orders.

The UK's director of the Government Communications Headquarters said Russian soldiers were sabotaging their own equipment and have accidentally shot down their own aircraft.

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7am is a daily show from The Monthly and The Saturday Paper. It’s produced by Elle Marsh, Kara Jensen-Mackinnon, Anu Hasbold and Alex Gow.

Our senior producer is Ruby Schwartz and our technical producer is Atticus Bastow.

Brian Campeau mixes the show. Erik Jensen is our editor-in-chief.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

I’m Ruby Jones, this is 7am. See you next week.