Taking way too much credit

$18 billion dollar gamble on climate action loophole

The Government’s reliance on dated carbon credits to extinguish over half of its Paris Agreement target might not be authorised, forcing it to purchase last-minute international permits or drastically reduce emissions to cover huge gap.

New analysis by the Australia Institute identified numerous legal, diplomatic and ethical barriers to using Kyoto Protocol carry-over credits, which undermine the government’s heavy reliance the credits.

Key points:

  • Australia has already explicitly agreed, in Clause 106 of the Paris Agreement decision, to encourage cancellation of surplus Kyoto credits and not use them to meet Paris targets
  • Kyoto Protocol rules limit the ability to carry over credits between non-consecutive periods
  • Other developed countries in the Kyoto Protocol such as Germany have ruled out using surplus credits and are encouraging Australia to follow suit, in the spirit of the Paris Agreement
  • On the international stage, Australia has reputation for historically exploiting international climate agreements and will face diplomatic opposition to securing further loopholes
  • At the Government’s own figure of $50/tonne for an international carbon permit in 2030, it could cost the government over $18 billion to make up gap from relying on Kyoto credits.

“Australia Institute analysis shows that the use of Kyoto credits is unethical, undiplomatic and undermines the Paris Agreement” says Richie Merzian, Climate & Energy Program Director at The Australia Institute.

“The Government maintains its climate action plans are fully costed but is yet to confess that it could cost up to $18 billion to purchase international permits to make up the gap left by its reliance on unauthorised Kyoto credits.

“The use of dodgy Kyoto credits to meet half of Australia’s Paris Agreement target is reckless and unnecessary. The practise certainly won’t make Australia any friends on the international stage.

“Other developed countries such as New Zealand, the UK and Germany are cancelling their surplus Kyoto credits because using them undermines the Paris Agreement and global climate efforts.

“Australia has no reciprocal goodwill left in the international climate negotiations space, and will face an uphill battle trying to secure special permission to use these dodgy hangover credits in order to avoid taking any real climate action.

“The Government has a very clear choice to make – continue with this high-risk, potentially high-cost strategy, or take real climate action with credible policies to actually reduce Australia’s emissions.”

/Public Release. View in full here.