The federal government’s own climate change agency has urged against using carryover credits to achieve Paris Agreement goals.
The Morrison government plans to use credit from meeting an earlier emissions reduction goal towards the Paris target, of 26 to 28 per cent on 2005 levels by 2030.
But the Climate Change Authority says this should be a last resort.
“Widespread use of these surplus units towards countries’ Paris Agreement targets would undermine achievement of the goals of the agreement,” the authority said, noting no other country planned to use them.
“Australia’s emission reduction efforts will be better recognised by many in the international community if targets are met without the use of carryover credits.”
The authority’s updated climate policy advice also notes the carryover credits – which makes the goal about 14 per cent instead of 26 or 28 – can only be used once.
“Relying on carryover credits to meet Australia’s 2030 target will essentially defer Australia’s transition and require accelerated emissions abatement in future years,” the paper says.
“If Australia meets its target through emission reductions from within the target period (2021–2030), future, more ambitious targets under the Paris Agreement will be easier and less costly to meet compared with delayed action with the use of carryover credits.”
The rules around using carryover credits have not yet been decided, as Australia is preventing the international agreement to set a rule in stone.
The Australia Institute’s energy program director Richie Merzian says the government faces an uphill battle to convince other countries the credits are valid.
“The Climate Change Authority has confirmed that the Australian government is isolated in its use of the carryover credits and is coming under increasing international pressure to abandon its plans,” he said.
The Investor Group on Climate Change supports the authority’s advice for the standardising and enforcement of corporate climate-risk disclosure.
“Investors looking to mitigate their financial exposure to climate risks need a greater level of transparency than is currently being provided so they can adequately assess and price risk and opportunity,” IGCC’s chief Emma Herd said.
The policy paper has also highlighted the need for a clear emissions reduction goal for 2050, noting all states and territories have committed to net zero by then.