Media Release: 2020 Review of the Emissions Reduction Fund
The Climate Change Authority today released its 2020 review of the Emissions Reduction Fund (ERF).
The ERF retains a central role within the Government’s suite of emissions reduction policies. It generates high integrity, low cost carbon offsets, supports voluntary abatement actions and provides a foundation for pursuing broader environmental, social and productivity benefits.
The Authority’s Chair, Dr Wendy Craik, said ‘The ERF has now been operating for six years and is maturing as a scheme. While Government purchasing had been subdued in recent years, auction results in 2020 suggest efforts by the Government and the Clean Energy Regulator to boost activity are paying off. These include the announcement last year of significant additional funding under the Climate Solutions Fund and the introduction of optional delivery contracts. The Authority also welcomes the announcement of additional funding for the Regulator to speed up ERF method development and project registration times.’
The ERF has been successful in incentivising low cost abatement from the agriculture, land and waste sectors. Landholders are reaping the rewards of new income streams; Australia’s carbon services industry is growing, as is the voluntary market for Australian Carbon Credit Units (ACCUs) as more major emitters set emissions reduction targets. ACCUs meet the best international practice integrity principles for carbon credits and are recognised globally.
The Authority’s review builds on the Government’s response to the Report of the Expert Panel examining additional sources of low cost abatement (the King Review), which contains measures designed to boost ERF activity and reduce the costs of participating, as well as the Government’s first Low Emissions Technology Statement, which presents a vision of a prosperous Australia and focuses government investment on new and emerging technologies. It also builds on the Authority’s recent research reports, Prospering in a low-emissions world: An updated climate policy toolkit for Australia, which sets out how Australia can further develop its policies to take advantage of the opportunities of a global low-emissions economy and Economic recovery, resilience and prosperity after the coronavirus, which identifies measures that could contribute to a ‘triple-win' economic stimulus package in response to the economic impacts of COVID-19.
For this review, the Authority commissioned the CSIRO to analyse the risks that climate change poses to storing and maintaining carbon in the landscape under ERF methods. Dr Craik said ‘The Authority considers this work to be a vital step in understanding how the changing climate will affect our efforts to reduce emissions. It highlights risks are present and will continue to grow. The Authority recommends more work be undertaken to allow the Government and ERF participants to better understand and manage these risks.’
The Climate Change Authority is an independent statutory agency, established to provide expert advice on climate change policy. The Authority is required by legislation to review the ERF every three years. The ERF is an emissions reduction offsets scheme combined with Government purchasing of abatement, which has been accomplished to date through competitive reverse auctions.
The review report and the CSIRO risk analysis can be found at www.climatechangeauthority.gov.au.