Australia’s framework for encouraging private investment in carbon farming requires greater ambition, according to the inaugural Carbon Farming Scorecard produced by lobby group the Carbon Market Institute.
The CMI also found that carbon markets would need to continue focusing on integrity, following recent criticism about the robustness of some types of credits that have been issued, as well as doing more to foster alignment with private capital.
The report scored each of the country’s state and territory governments as well as the federal government, assessing whether the market is advanced, intermediate, under-developed or limited in each jurisdiction.
Queensland came out on top as the only state or territory government judged to have an advanced carbon market in place, with Tasmania and the Northern Territory ranked as under-developed. The Australian Capital Territory’s market was judged as limited in scope, although it has comparatively little capacity for land-based carbon storage due to its size.
‘Enabling private investment’ was one of the metrics by which each jurisdiction was judged, and while scores varied, every jurisdiction was regarded to be under-developed at best in this regard.
The report found that carbon farming was a crucial part of almost every government’s net-zero emissions strategy, but that policies put in place to encourage the growth and development of markets varied widely between jurisdictions.
The CMI called for governments to introduce policies that create “long-term, reliable, structural demand drivers” for carbon credits, and to collaborate with banks, investors and insurers to ensure better understanding of carbon farming and support for projects.
Carbon Market Institute CEO John Connor said in a statement: “Despite challenges over the last decade, as well as recent scrutiny of carbon crediting and impactful policy interventions, the report identifies land-based solutions as a critical element of almost every government’s net-zero strategy.
“We commend the higher-performing jurisdictions in raising the bar with some substantial policies in place across the country, as well as acknowledging the role of the federal government in building a strong platform for the industry over the last decade. However, we are at a critical juncture where this framework needs to be scaled up and rejuvenated to chart a more ambitious path and link them to the required scale and urgency of industrial decarbonization policies.
“Overall, the scorecard illustrates the unique opportunity for Australia’s carbon farming sector to play a key role in driving down emissions, supporting climate repair and resilience, and generating jobs, revenues and other co-benefits for communities across the country.”