Rethinking Carbon Offsets: Insights from Australia’s Human-Induced Regeneration Projects

As the Science Based Targets initiative (SBTi) explores integrating carbon offsets for scope 3 emissions , the significance of choosing credible and effective offsets has never been more critical. This issue takes on added urgency with recent revelations from Human-Induced Regeneration (HIR) projects under Australia’s carbon offset scheme, exposing inefficiencies and misrepresentations in reported carbon sequestration results.

Challenges with HIR Projects

An extensive analysis of 182 HIR projects aimed at regenerating native forests to sequester carbon has uncovered a concerning trend: nearly 80% of these projects reported minimal or no increase in woody vegetation cover despite being allocated carbon credits. This stark discrepancy highlights a systemic issue in the validation processes of these projects, suggesting a misalignment between environmental claims and actual benefits.

Analysing the Impact and Additionality

The data compiled from these projects presents a grim picture: the overall increase in forest cover across the 3.4 million hectares of credited areas was only 3.6%, with an even more negligible combined increase for sparse woody and forest cover at just 0.8%. Furthermore, statistical analysis indicates that these changes in vegetation cover are more closely related to natural regrowth in similar, adjacent areas not under the project scope rather than the direct result of any active regeneration efforts. This pattern raises critical questions about the additionality of these projects, a key principle in carbon offsetting that requires that the carbon savings would not have occurred without the intervention.

Questions of Integrity and Transparency

The credibility of the offset scheme is further undermined by its methodology and transparency. Many projects have been credited for carbon sequestration in areas with significant pre-existing woody vegetation, which would likely have captured carbon regardless of any intervention. Moreover, the prevalent use of theoretical models over empirical measurement to estimate carbon gains casts doubt on the accuracy of the credits awarded. This reliance on projections rather than tangible outcomes creates a potential for over-crediting, thus inflating the perceived impact of these projects.

Broader Implications for Carbon Offsetting

These issues are not isolated but indicative of broader systemic challenges within carbon offset markets. They underscore the need for rigorous, transparent, and scientifically grounded methodologies in project selection and credit allocation. As policymakers and the global community increase their reliance on carbon offsets to meet ambitious climate goals, the demand for genuine and permanent carbon reductions becomes paramount.

The Need for Informed Decision Making

These findings stress the importance of due diligence and the selection of truly impactful projects for organisations looking to incorporate carbon offsets into their ESG & sustainability strategies. Stakeholders must critically assess the veracity of offset claims, ensuring alignment with broader environmental objectives and adherence to principles of emission reductions.

The discussion around the efficacy of carbon offsets is not just academic but a crucial aspect of our global response to climate change. It is important to engage with scientific findings before project developers rush to criticise scepticism towards carbon offset projects. The debate is not about competing against market interests but ensuring these interests are aligned with scientific integrity to combat climate change effectively.