Podcast transcript Episode 6
[0:00:00]
Music track starts
Guest (clip): If we recognise that decarbonisation is happening.
Guest (clip): You just have to start somewhere and see what’s practical and what’s feasible in terms of reductions.
Guest (clip): Directionally, we know that this is going to be a really big thing for businesses over the next ten years.
Guest (clip): It represents one of the fastest routes for us to decarbonise as a country.
Guest (clip): Potential cost benefit.
Guest (clip): It’s really powerful. It can mean we all move incrementally forward together before 2050.
[0:00:27]
Taylor: Welcome to the Net Zero Path for Business, a podcast delving into the process of transitioning to renewable energy and emissions reduction from the very beginning. It’s a show where we explore ways to not just survive, but thrive as a business along the way.
I’m your host, Taylor Hawkins, and I’ll be bringing together industry advisors, experts, and businesses as we explore things like switching to EVs and the practicalities of going solar.
Join me as I ask our guests to share their stories of transition and the strategies that have helped them on their way. We’re presented by AGL, inviting you to join the change
Taylor: As we dive into talking about our future ambitions for net zero, I would first like to acknowledge the leadership, knowledge and resilience of the Aboriginal and Torres Strait Islander peoples who have safeguarded the sacred lands and waters of this country, that we know as Australia, for thousands of years. May we strive to honour, learn from, and meaningfully partner with leaders of such calibre.
[0:01:27]
Taylor: Hello and welcome back. Here we are at the final episode in our six-part series. Today we are tackling one of the least understood spaces in decarbonisation: carbon offsetting.
It’s an area that seems to be surrounded by confusion and sometimes even controversy. So, I am particularly excited to dive deep into it and find out what role, if any, it has to play in the path to net zero for business.
When you hear offsetting, your mind probably goes to purchasing carbon credits, but the term actually covers a whole lot more than that.
That’s why we have sat down today with expert Kurt Winter from the Carbon Market Institute. He’s the Director of Corporate Transition over there, and he has a ton of wisdom from his work guiding corporates and even the government in terms of best practice in the carbon market. Today, we’ll be covering the answers to questions like: Do you need to carbon offset? Will it slow down the transition? And how can you as a business go about navigating it all?
Let’s get into it.
[0:02:27]
Taylor: Hello and welcome, Kurt. It’s great to have you here today.
Kurt: Thanks very much for having me.
Taylor: I would love to start by hearing a bit more about the Carbon Market Institute and the work that you do there.
Kurt: Sure. So, the Carbon Market Institute is a member-based institute, and we don’t operate like a traditional member industry association where we tend to represent specific business views.
We have quite a broad member base that spans across the Australian economy and indeed across the carbon supply chain. And our focus is really purpose driven, that’s focused on accelerating climate action in accordance with the Paris Agreement goals.
Specifically, within that, we’re focused on what is the role of market-based solutions and how can that be complemented with best practice approaches to decarbonisation to limit warming to 1.5 degrees.
My role specifically within that, as you mentioned, is corporate transition. And what that means is that I help companies navigate through what best practice means for their individual business and their sector, but also help to influence and guide best practice when it comes to policy making by governments and regulators alike.
[0:03:45]
Taylor: Well, you certainly sound like the guy to be speaking to about this topic. But before we dive into the detail, for anyone who doesn’t know, what is carbon offsetting and what does the term encompass?
Kurt: So I guess it’s important to note that there is some complexity in the terminology around carbon credits and carbon offsetting. And indeed some of those key terms have actually begun to evolve.
Essentially, when we’re talking about carbon offsetting, what we mean is that when a company seeks to decarbonise, that they reduce their emissions as much as possible and then they procure carbon offsets or carbon credits to essentially compensate for the emissions that they can’t reduce within their own business.
[0:04:30]
So that might be through actions that they’re paying for in another company that’s in a similar industry, for example in an industry application.
Or indeed it might be activities that are happening elsewhere in the economy. For example, land-based carbon credits that might be paying for abatement activities in those industries.
I think what is interesting is that the actual activity that is being incentivised and the unit of trade is more appropriately termed a carbon credit because that is the financial product that is associated with that activity.
The act of offsetting is in a more appropriate reference to how that carbon credit is applied to that individual company’s targets, ambitions and in some instances, their compliance obligations.
So, for example, in the Australian context, some companies do have compliance obligations where they have to reduce their emissions over time. And if they can’t reduce those emissions, they are actually legally required under the safeguard mechanism to source carbon credits or carbon offsets.
[0:5:41]
But in some instances, companies do not face those compliance obligations. That’s not to say, though, that they’re not compelled to seek to address the emissions of their company, and there are a number of drivers that would be compelling them to do so.
But in that instance, where the target might be a voluntary target, it is perhaps more appropriate to refer to what they’re doing as an investment in carbon credits, because it might actually be over and above what they’re doing, and it might be additive to their broader decarbonisation efforts.
So, they might be on a pathway towards net zero where they set interim decarbonisation targets and they’ve put in place investment plans to decarbonise, for example, their industrial operations. And then over and above that, they might also be investing in carbon credits, either in the Australian economy or indeed internationally, to actually accelerate actions and to accelerate important investment and financial flows to where it’s most needed.
[0:06:42]
Taylor: Well, you’re certainly setting out some of these distinctions that I know our listeners really need with the language and with some of these guidelines.
But I want to cut straight to the crux of the question that I know will be on so many of our listeners minds, which is, in your opinion, does offsetting have a role to play in the path to net zero?
Kurt: So I think the starting point needs to be that decarbonisation must always be the primary focus for companies.
The challenge is that those decarbonisation solutions within a company’s own business, or indeed supply chain, may not be immediately available. And there’s a number of reasons for that.
The first is really technological, that if, for example, a company is in aviation and looking to develop sustainable aviation fuels, that technology is still some way off.
It’s also not necessarily immediately commercially viable.
So, in the intervening period, carbon credits play a vital role in enabling that company to be able to contribute towards abatement efforts, whilst they’re also pursuing those long-term decarbonisation solutions.
So, in that sense, they’re actually speeding up the transition and the scale of decarbonisation across the economy by facilitating climate action over and above and beyond what’s possible in house within that company.
They also provide a vehicle to mobilise carbon finance into abatement activities in Australia and internationally that’s vitally needed.
So, we all know that the transition towards net zero emissions will require substantial amounts of financial investment towards all available decarbonisation solutions.
Some estimates from NAB and Deloitte that were produced in 2022 found that there would be around $420 billion worth of public and private investment required to achieve a productive and competitive net zero economy by 2050.
If coordinated, ambitious decarbonisation action undertaken from now on the Australian economy, by those same estimates from that NAB Deloitte report of 2022, suggests that the Australian economy could stand to gain around $890 billion over the next 50 years.
On the other hand, if there were to be no further or significant climate action, this could result in 3.4 trillion in economic losses over that very same period.
[0:09:28]
So I guess what that research shows is that if you have well designed, durable and high integrity carbon markets alongside a suite of other policy responses, it can play a really integral role in ensuring that the transition is economically efficient, but also delivers other benefits in terms of economic, regional, indigenous and environmental benefits.
Carbon markets are fundamentally important, importing an explicit price or value on carbon emissions or carbon removals in the atmosphere.
And this can work to provide an incentive to decarbonise, attract those large amounts of capital, scale up high integrity climate solutions, and in turn address climate change faster.
It’s also important to note that net zero and net negative emissions are not realistic without putting a value on carbon reduction.
Putting a value on carbon is vital to drive that finance to industrial decarbonisation and also in the longer term, to drive carbon removals and drawdown as we meet some of those temperature tipping points under the Paris Agreement, to actually draw carbon out of the atmosphere and support the stabilisation of the earth’s atmosphere.
[0:10:52]
Taylor: I think you’ve already touched on this in a lot of the elements of your answer, but I hope you’ll forgive the idealist in me doubling down on the question a little, which is why not focus purely on decarbonisation?
Shouldn’t companies be investing in decarbonising their own businesses and not investing externally in the carbon credits?
Kurt: Yeah, and I think there is a lot of concern that investment in carbon credits risks delaying the transition.
But I think in reality, what you find on the ground is that it actually helps to speed up that transition if the companies are working towards that sort of high integrity approach that I mentioned.
And so internationally, we are starting to see now a lot of guidance to support companies in developing high integrity approaches to corporate transition that balance the need for at point decarbonisation and substantial investment strategies to support those long-term objectives.
But also comprehensive approaches in terms of how they’re going to manage their carbon and climate risk in the here and now, and invest in really significant abatement through carbon credit projects.
[0:12:07]
On the other end of the spectrum, you do hear from some commentators that there is a need for absolute accountability for emissions.
And I think that that is the ideal or the gold standard that all companies would be responsible for 100% of their emissions.
This is a principle polluter pay that is actually established in some of the foundational conventions and treaties an international level. Polluter pay is what underpins the Paris Agreement, the UNFCCC framework, and indeed a lot of the case law that you see at the international level.
But in practice, this is actually quite a complex economic challenge because we know that there’s a need to move the finance in the right direction and prioritise it where it needs to go.
So, I think for companies such as industrial companies, that need to chart a pathway towards material decarbonisation, it’s important that the priority investment driver is towards the transformation of their own entity towards something that is clean and green in the intervening period.
It is also important that they’re addressing their transitional emissions as they get there, and carbon credits can play that role.
[0:13:22]
What’s more, perhaps more controversial, is how do we deal with historical emissions? And that’s an issue that has gone right through to some of the negotiations that you see under the Paris Agreement, around which companies and which countries will be responsible for the action and indeed the damage that we’ve seen internationally.
But I guess just coming back to some of the theory that I mentioned earlier, the theory behind carbon markets is around putting a price or putting a value on carbon, and then in turn incentivising that activity.
So, in the Australian context, we do now have an effective compliance market for 215 of the largest industrial facilities.
And what that means is that they will need to think about what is their long-term investment horizon and how will they procure transformative investments to, for example, deliver green steel.
On the other side of the equation, they will also need to deal with a growing compliance obligation and that will need to be dealt with through the procurement of carbon credits.
Turning to the other side of the equation, which is the voluntary one I mentioned earlier, we also see in that circumstance.
[0:14:37]
And this is where I think a lot of the discourse around greenwashing does get somewhat confused, that often commentators think that if a company is voluntarily investing in carbon credits, that they’re somehow hiding what they’re really doing or concealing that, and that they’re not serious about those transformative investments.
But interestingly, some of the recent evidence suggests that companies that voluntarily invest in carbon markets are actually more likely to internalise a carbon price and have governance systems in place within their company that are actually more robust.
And what that means is those companies are actually more likely to report lower gross emissions year on year and invest more in emissions reductions.
And I think that’s really interesting, because what that highlights is that even though carbon credits might not be the final destination, they play a really important role in supporting the transition, not only from a perspective of incentivising activity that would never have been invested in if not for that carbon credit, but also from a perspective of behavioural change and actually influencing companies to internalise that price and then make long-term investment decisions that actually makes that externality something that is very tangible to their business.
[0:16:07]
Taylor: Wow, you make such a fantastic point.
And I take back my idealist concern and can certainly see how building this into the accounting, the considerations of an organisation, can be a signifier of commitment.
But it does seem like the space is incredibly controversial. Why do you think carbon credits have gotten such a bad rap?
Kurt: So there has been, particularly in the last few years, there has been substantial discourse and discussion on the role that carbon credits should play in a credible net zero transition.
And this is part of a much broader discourse about the role that the private sector should be playing when we’re talking about those global goals under the Paris Agreement.
So fundamentally, you do need to have effective government policy in place to guide what is a really transformational economic shift.
And that’s a structural one in terms of how economies function and what they’re relying upon. But you also need to see leadership from individual corporate entities to drive that change and to demonstrate that they’re actually supporting credible outcomes.
[0:17:19]
Now, I think part of this has been one of really transparency, that we actually don’t quite know what it is companies are planning to do to get to net zero.
And whilst post the Paris Agreement being signed onto, we did see a groundswell of corporate entities coming to the fore and setting these net zero by 2050 targets. But often it’s been unclear as to what sits underneath those targets and what’s their technology pathway.
But there’s also been a real dearth of guidance as to what is a credible transition pathway within that. And what’s a credible guidance in terms of the kind of things you should be doing to get there.
I mentioned at the outset the need for companies to prioritize emissions reductions. But that particular approach, which is often referred to as the hierarchy or mitigation hierarchy, is not necessarily entrenched in legislative frameworks in many jurisdictions.
And so, it’s up to individual companies often to choose their own adventure of how they get there. And certainly I would also highlight that not all actors are subscribing to high integrity approach.
[0:18:31]
As with any market, we do see that there are risks of bad behaviour and there are risks that if businesses don’t get the right advice, whether that’s legal advice or market advice or strategic advice, on what best practice looks like, thinking about their stakeholders and thinking about the expectation of investors towards that ultimate deep decarbonisation.
Then there’s a potential for them to over rely on offsets and potentially adopt a strategy that might, for example, extend the life of fossil fuel assets.
This comes back to my point about carbon markets being transitional in nature. A lot of the international guidance is really doubling down on that and really highlighting that, yes, carbon markets are going to have an enduring role and corporates should utilise them as a complement to decarbonisation.
[0:19:25]
But the guidance is actually becoming much clearer on what we mean by decarbonisation and what we mean by the time horizon to get there.
So, if a company is, for example, saying that they’re net zero by 2050, and then 2050 actually looks like an expansion of all their fossil fuel assets, there’s limited kind of visibility on what’s their investment in carbon removals to actually give assurance that those heavy emitting investments will in fact be fully carbon captured. Then there’s a substantial risk there in terms of satisfying the expectations of guidance, but also investors and the public on what best practice looks like and what we expect of those businesses.
Taylor: Absolutely. And I think you’ve already done a great job at highlighting some of the challenges that might emerge.
But can you give us a bit more of an overview of some of the things that businesses tend to come up against in this process?
Kurt: Absolutely.
It’s a fairly complex space, and I think some of the really key challenges are around understanding the regulatory landscape, being able to navigate around that risk of alleged greenwashing, thinking about effective business transition planning, and also just engaging with the complexity of the market, which for many will be quite a novel thing.
So I’ll touch a little bit more on each of those points.
[0:20:52]
I think in terms of the regulatory landscape, it’s really important that corporates and businesses understand the nuance around the compliance and voluntary markets.
So, I think in Australia the two are often conflated and we kind of see carbon credits as just this kind of wild west that’s not really regulated at all.
In both the voluntary space and indeed compliance markets, there is a degree of standardisation amongst all of those in terms of how the credits are created, how they were assured, a methodology that is based on science that actually supports the creation and establishment of those credits.
[0:21:37]
It starts to diverge, though, in terms of the obligations that apply to corporates.
So in a compliance market, and I did mention earlier the safeguard mechanism in Australia, the entities that are covered by that actually have a legal obligation to reduce their emissions year on year.
And if they can’t, they’re actually legally required to procure offsets.
So in that context, offsets and carbon credits play a dual function in terms of they’re actually a penalty for a company not choosing to invest in those transformative, at-source decarbonisation efforts, but they’re actually a driver as well in terms of setting the speed of the transition and incentivising companies to invest in decarbonisation efforts, whether that’s within their company or across the economy.
Involuntary markets, that’s a choice for a company to do that, but they would do that to serve some of their other legal obligations and also the expectations that might be set by investors to demonstrate their sustainability credentials, for example.
[0:22:49]
That’s not to say, though, as I mentioned at the outset, that they can’t go to crediting bodies that demonstrate high integrity methods.
And internationally we see that there are a range of institutions that certify credits that are of a high quality.
So, I think one of the things that people also confuse is that because a credit is international or because it’s Australian, one is going to be higher integrity than the other. That is not necessarily the case.
In the Australian context, the carbon credits are regulated by the government and that means that we do indeed have a world leading scheme that has gone through a range of iterative processes to ensure that it is robust and it continues to be reviewed and improved by government.
But similarly, at the international level, we also see that a lot of these schemes are also going through that iterative process to ensure that the credits that are produced do adhere to high levels of integrity. So, I think that’s a really interesting aspect.
[0:23:50]
The other area that I’ll just touch on is around companies navigating best practice guidance on alleged greenwashing.
This is an important discourse because if companies aren’t actually doing the right thing, it’s not just about the company’s integrity, it’s actually about our collective efforts.
So, it’s a fundamental imperative to the transition that companies are doing the right thing and that whatever they’re investing or whatever they say they’re investing in, actually stacks up.
[0:24:23]
As I mentioned earlier, the challenge here is that at the moment, we don’t have any universal combining net zero regulation in this area.
But what we are seeing is the beginning of a convergence of that guidance on key guiding principles, on what best practice looks like. So, some of those things are the expectation that companies will set interim emissions reduction targets every five years.
There is an increasingly common expectation that companies will transition away from fossil fuels.
And there’s also a maturing understanding that carbon credits should contribute towards the residual emissions once they’ve met those interim targets that I mentioned, and for transitional purposes, for example, to account for ongoing and historical emissions.
But they shouldn’t apply to those interim emissions reduction targets. And that really goes to that point around the market being transitional and additive and over and above what a company is doing in their decarbonisation efforts, and not substitutive or compensatory.
I’d also just like to touch briefly on transition planning, because this is also becoming a really important frame for businesses to navigate how they engage with carbon markets.
[0:25:41]
And I think at a high level, what we’re seeing both internationally, and we are going to see this in Australia through the mandatory climate disclosure framework that companies and businesses will need to set comprehensive transition plans for their business that cover a range of different topics to demonstrate the integrity of their plan and the integrity of their transition pathways.
And these include reporting on emissions scope one, two and three. And obviously, scope three is incredibly challenging for some industries, given their exposure to supply chains.
There’ll also be a need for those pathways to be informed by science and a demonstration of how they are aligned to that 1.5 degree pathway, and what kind of scenario analysis has been undertaken by the company to show just how much that company stacks up with a science aligned pathway.
It will also be critical that they have certain governance arrangements in place in terms of how the company makes its decisions, how it sets its strategy, what it plans to disclose, and indeed how it engages with government in terms of its advocacy.
[0:26:54]
And then finally, its approach to market is going to be increasingly more important, but also an increasing expectation on transparency around that.
So, stakeholders will want to understand what is the internal carbon price that is being utilised to inform investment decisions?
How is a company looking to procure renewable energy through market-based solutions? What is their carbon market strategy? How are they managing that risk? That if they’re facing a compliance obligation under the safeguard mechanism, how are they looking to meet that obligation?
Are they actually engaging with the market? Are they investing in long term contracts themselves?
And I guess as more of a forward leaning area that we’re starting to see is a development around nature positive.
And what we mean by that, is that increasingly there is an expectation that companies will actually begin to set targets and set ambitions around restoring and repairing nature, and understanding the relationship of the company, its impact on nature, but also what it can do to actually improve nature and bring back the biodiversity that has been lost.
[0:28:08]
This isn’t an abstract concept. This is something that has been agreed through a complementary treaty to the climate change negotiations, but it’s also being looked at in the financial sector and has translated into a voluntary reporting framework.
In Australia, we just last year had groundbreaking legislation passed through parliament that established a nature repair market.
And what we anticipate is that over time we’ll actually start to see proactive investments to look at ways to restore nature, and we’ll also see company strategies and targets to address this.
Obviously, we refer to biodiversity loss and climate change as a twin crises, but we also need to look at the solutions in the same way.
And I think companies are well placed to do that, because as they’re thinking about, for example, investments in carbon projects, a lot of those projects actually do serve those biodiversity processes.
And so, companies will be able to look at these two phenomenons together and actually deliver, hopefully on both.
[0:29:15]
Taylor: Wow. I’m sure I speak for many of our listeners when I say, my goodness, it sounds like there are a lot of moving pieces to consider.
So, I’d love to know where you think that businesses should begin in navigating all this market complexity.
Kurt: Yeah, it’s a really great question. And I think in terms of navigating the market complexity, it’s really important to understand that the carbon market in Australia, and indeed internationally, is a highly professional market, just as is the case with the financial market.
There is a huge range of experts in the field, and CMI is a testament to that, in a sense. Our membership base includes project developers, service providers. We also have expert advisors that can work with companies and help them understand projects on the ground, but also advise on things like what is a robust carbon market strategy and what kind of risk should that be dealing to.
There’s also an important role here, obviously, for many of the other professions that we lean into when we talk about other corporate and market risks, including lawyers, in terms of how those contracts are entered into and dealing with those sorts of risks.
Auditors, in terms of ensuring that the projects on the ground are of high integrity. And also financial institutions as well, play a really critical role in this respect.
[0:30:45]
So I think it’s really important that when companies are entering into the market, that they engage with that professional expert community so that they’re getting the right advice on what they should be doing.
It’s really important when companies begin to engage in the market to gain an understanding of price, but also co-benefits. And I did mention earlier that some projects deliver benefits in terms of things like biodiversity.
Many credits also deliver other benefits in terms of, for example, outcomes for Indigenous Peoples by providing an opportunity for empowerment and economic livelihoods.
So, in looking at the market, it’s an interesting space because different credits trade at different prices based on those different benefits.
And from a company perspective, if you’re trying to satisfy your ambition around climate change, but also a range of other sustainability objectives, it might be really important to your organisation to understand the nature of those credits that you’re investing in, because it might be able to serve multiple purposes in terms of, for example, your own company’s ambition around First Nations Peoples as well, or indeed nature restoration, as I mentioned earlier.
So that’s a really important aspect to it.
[0:32:09]
I think for corporates we can never reiterate enough the importance of due diligence to ensure the integrity in the projects that they’re investing in and to ensure that the projects are delivering what they say they are.
But also, I guess, due diligence in who they’re dealing with and ensuring that the parties that they’re dealing with are operating with a high degree of integrity with those other stakeholders from a behavioral integrity perspective.
It’s worth highlighting here that the Carbon Market Institute does administer the Australian Carbon Industry Code of Conduct. That’s actually quite a unique code.
That’s a voluntary code that regulates a range of service providers in industry and provides an additional level of assurance that those parties are operating with integrity.
So, I would certainly encourage participants to engage with that framework, but indeed also to undertake their own due diligence.
[0:33:09]
Taylor: It sounds like due diligence is such an important part of that process, so you really understand what you’re getting.
How can businesses know what they’re choosing will truly make a difference? And what does good due diligence look like?
Kurt: So I think it’s important to highlight that there are multiple layers of checks and balances to support confidence in the integrity of carbon credits, both in Australia and internationally.
In the Australian context, the carbon credits are governed through a government backed scheme, and that’s quite unique internationally.
But what it means is that when companies are investing in Australian carbon credit units, they can lean into that framework to actually understand the integrity checks and balances that adhere to it.
[0:33:57]
So they can look at the offset integrity standard, for example, to understand the kinds of expectations that have been set, and indeed whether those integrity standards stack up against the company’s own standards of what they would like to see in projects.
They can also undertake their own due diligence directly when they’re procuring credits through the project developers, or indeed through those intermediaries that they might be dealing with in making relevant inquiries about how those credits were originated.
And similarly, on the international front, as I mentioned, there are a range of certification schemes that are responsible for setting standards for the development and origination of credit.
So, both in the international context and the Australian context, there are established methods that detail the scientific approach that these methods have gone through.
And indeed, companies can interrogate and go through those processes to really understand on the ground and also from an economic and scientific perspective, how those credits were established.
[0:35:12]
I think it’s also important to note that integrity is iterative and needs to continue to improve with the best available knowledge and best practice over time. And we are seeing this both in Australia and internationally.
So, in the Australian context, just last year, the government commissioned an independent review into the Australian Carbon Credit Units, the Chubb review.
And that review was really intended to assess Australia’s carbon crediting framework to understand: Is it fit for purpose?
[0:35:45]
Are the governance arrangements fit for purpose? The way the methods are developed? Who’s developing them? those sorts of questions.
Essentially, it concluded that Australia’s carbon crediting framework is sound, but it also made a very substantial number of recommendations to improve and enhance the integrity of Australia’s framework over time.
And so, we’re now going through a period of significant reform to implement those important changes.
And that’s really important because it means that into the future, we can continue to have confidence about the use of those credits.
So internationally, we’ve also seen a similar development occurring. And the international body called the Integrity Council for Voluntary Carbon Markets, that’s an initiative, that is a multi-stakeholder initiative, has been going through a process of establishing what’s called the core carbon principles.
[0:36:40]
And these principles are intended to guide what high integrity carbon credits look like. And now that those principles are established, that organisation will now go through a very substantial process of reviewing and assessing each of the crediting bodies in the voluntary carbon market and assessing whether their carbon credits align with that international framework.
So again, we will see an iterative process where the projects on the ground will continue to be assessed to ensure that they’re meeting best practice expectations.
Taylor: Wow. In this conversation, we have certainly touched on so many elements and features that can impact a carbon project.
Can I ask, are all carbon projects created equal and what makes one stand out over the other, in your opinion?
Kurt: So I would say no, all projects are not created equal. And I mean, we can draw that conclusion for a number of reasons.
We can draw that conclusion from purely a price perspective, that carbon credits do attract a premium where they can demonstrate that they’re delivering other benefits, for example, benefits to Indigenous stakeholders, or benefits in terms of nature and biodiversity.
But all projects are not equal because they aren’t all credited through the same checks and balances. So I think fundamentally, when companies are assessing where to invest in the market, or whether to invest in the Australian market or internationally, it is important that they go back to those checks and balances and some of those elements of iterative guidance to understand whether the projects that they’re looking to invest in do actually attract high integrity and can be assessed in that way.
[0:38:33]
I think just coming back to the point around additional benefits, I think projects that really stand out are ones that can deliver holistic value to the region and community in which they’re established.
And I guess just to mention one project, we’ve seen a project in the Atherton Tableland in Far North Queensland. And that’s been an interesting project because it’s on a site that is one of the largest remaining privately-owned rainforest remnants of the Atherton Tableland.
And through the application of carbon credits, they’ve been able to essentially restore that ecosystem back to its original state. But they’ve also been able to earn a premium on the carbon credits because of the biodiversity value within that project.
And for example, it’s attracted back endemic birds to the wet tropics, as well as tree kangaroos, rainforest possums and the like. So, it’s a really interesting example of a project that has been very successful, and that success is demonstrated in the premium that those credits have been able to attract from the corporate side.
[0:39:52]
I think it’s also worth noting, when it comes to First Nations opportunities, that carbon projects can also deliver really strong outcomes. And many of the projects, for example, are focused on savannah fire management.
And through the Australian Carbon Credit Scheme, there is an opportunity to actually create an opportunity for Indigenous People to engage and return to their country in order to engage in savannah fire burning, which is actually a traditional fire management practice that seeks to reduce the risk of late dry season wildfires.
So again, that’s another interesting example of a project application that combines abatement activity, but also provides really tangible benefits to local communities.
Taylor: I absolutely love hearing about projects that don’t just work, but add real value to community at the same time, and that is a high point for us to end on.
It’s been such a pleasure to have you here Kurt and thank you for taking us through what is quite a complex topic, but you made it easy to digest. I’ve learned so much.
So, thank you so much for your time.
Kurt: Thanks, Taylor.
Taylor: After talking to all our guests, another big take away from me has been just how willing and available these experts are to help you in your journey.
Whether it’s getting an audit to help you understand your own emissions, landscape, or feeling out different solutions for solar or electric vehicles. It’s really reassuring that there are plenty of people and businesses out there willing to help make this transition as easy as possible and right for your business, rather than being set on a particular solution.
This was our last episode for now. I hope it’s been as enlightening for you all as it has for me.
Decarbonisation is a vast space and we’ve only touched on a handful of topics, so we hope to be back soon to explore some more.
Until then.
Music track ends
[End of Audio - 0:42:00]
