When Numbers Start Making Decisions · Season Four, “Things That Cannot Be Priced Directly” · Article 8
1. How a tonne of gas becomes a financial product
The Australian Carbon Credit Unit Scheme converts different abatement activities into a common unit. The Clean Energy Regulator states that one ACCU represents one tonne of carbon dioxide equivalent that would otherwise have been released, and that eligible projects can earn units for emissions avoided or carbon stored. ACCUs are tradable financial products held in registry accounts. Clean Energy Regulator: Australian carbon credit units
A landfill capturing methane, a vegetation project storing carbon and an energy-efficiency project avoiding emissions can all issue units labelled “one ACCU”. Government, Safeguard Mechanism facilities and voluntary buyers can acquire and cancel them.
The common unit makes a market possible. A buyer does not have to inspect every tree, flare or baseline before trading. Yet greenhouse gases, methods, locations, timing and measurement differ. One tonne on the registry is an institutional equivalence, not proof that every project has identical integrity or co-benefits.
The question is which differences the tonne may legitimately erase and which must remain attached to the unit.
2. Carbon dioxide equivalent is already a conversion
Greenhouse gases have different atmospheric lifetimes and warming effects. Scientific metrics such as global warming potential convert methane, nitrous oxide and other gases into CO₂-e over a defined time horizon. That creates comparability across gases.
Projects then require a counterfactual baseline: what emissions or sequestration would have occurred without the activity? Avoided emissions cannot be observed directly because the alternative world did not happen. Approved methods use historical data, models, measurements and conservative deductions.
Net abatement may subtract project emissions, leakage and buffers. An issued unit is therefore the end of an evidence chain: gas conversion, baseline, monitoring, method and audit. Its apparent simplicity depends on maintaining each link.
The tonne is useful because those links are standardised. The claim becomes too strong when a buyer says that one unit is a directly observed tonne in every case.
3. Additionality: should an activity that would happen anyway earn credit?
Offsets must represent abatement additional to business as usual. If a landfill was already legally required and economically certain to capture methane, issuing credits for the same action would not create an additional climate benefit. The buyer’s emissions would be offset on paper without an extra reduction in the atmosphere.
Additionality is difficult because project proponents know their plans and economics better than regulators. Rules use eligibility tests, method baselines and exclusions to approximate the counterfactual. Policy changes can make yesterday’s additional activity ordinary practice.
Methods should therefore be updated, versioned and monitored for inflated baselines or projects clustered around eligibility conditions. A project can comply with the rule as written while the rule no longer distinguishes additional action.
Portfolio data can reveal this problem. If issuance rises sharply under one method without a corresponding change in observable activity, regulators should investigate baseline incentives and project composition. Random and risk-based audits serve different functions: random audits estimate ordinary compliance, while risk-based audits target projects most likely to over-credit. Publishing method-level issuance, audit findings and changes makes it possible to judge the unit as a system rather than treating every controversy as an isolated proponent.
The independent review of ACCUs examined scheme integrity and led to reforms intended to strengthen governance and method assurance. DCCEEW: Independent Review of ACCUs
4. Permanence: what if stored carbon returns?
Avoided fossil emissions and biological sequestration have different time structures. A tonne not emitted does not enter the atmosphere. Carbon stored in vegetation or soil can be released by fire, drought, clearing or management change.
Area-based sequestration projects carry permanence obligations, generally choosing 25 or 100 years. The CER explains that a 25-year choice attracts a discount and that sequestration projects also face a risk-of-reversal buffer. Reversal can trigger relinquishment or carbon-maintenance obligations. CER: Permanence obligations
These rules do not make temporary biological storage identical to permanent non-emission. They construct a managed equivalence through time commitments, buffers, monitoring and liability. Its credibility depends on enforcement long after the unit is sold.
5. In what sense are two ACCUs the same?
All ACCUs share a statutory unit and can meet certain compliance or voluntary purposes. Registry attributes can identify project, method, vintage, location and issuance date. Buyers may value those attributes differently.
Projects can vary in measurement confidence, permanence, social effects, biodiversity benefits and contribution to local communities. A tonne of climate accounting does not prove equality on those dimensions. Paying a premium for a project attribute can be rational, but marketing claims need evidence.
The register should preserve traceability rather than allowing fungibility to erase origin. The unit is interchangeable for the defined carbon obligation; the project remains distinct for integrity and wider impacts.
Co-benefits and harms should also be reported separately. A vegetation project may support habitat and regional employment, or it may create fire, land-use or cultural concerns. These effects do not change the carbon quantity unless the method says so. Folding them into a claim of “premium carbon” without evidence confuses dimensions; ignoring them because the tonne is correct is equally incomplete. Carbon equivalence and project quality need parallel accounts.
6. Supplement to reduction or licence to delay?
Offsets can finance lower-cost abatement and address residual emissions that are difficult to eliminate. They can also allow a buyer to delay direct operational change if cancellation is treated as equivalent to decarbonisation.
A credible climate strategy should separate gross emissions, direct reductions, units surrendered and residual net emissions. Buyers should not describe a unit as reducing their own physical emissions. It compensates within an accounting framework.
Prioritising direct reduction does not make offsets useless. It assigns them a bounded role. High-integrity units are valuable for residual emissions and transition, while structural decarbonisation changes the source.
7. How integrity can be reviewed
Integrity requires approved methods, additionality, conservative baselines, monitoring, independent audit, regulator oversight, transparent issuance and remedies for reversal or false information. Project and contract registers allow public scrutiny, though commercially protected data can limit visibility. CER: ACCU project and contract register
Review should examine distributions, not just total units: which methods issue most, how estimates compare with observed outcomes, how many units are relinquished and whether communities bear adverse effects. Complaints, research and method problems should be able to pause issuance and trigger correction.
8. One tonne is an achievement that must be maintained
The equivalence among gases and projects does not pre-exist measurement. Science, law, methods, registries, auditors and permanence obligations continually maintain it. That is not a weakness; it is the institutional work required to make collective climate action calculable.
The mistake is to treat the finished unit as self-authenticating. Its authority cannot exceed the evidence chain underneath it.
9. A practical test for carbon-unit claims
Ask:
- Which method, project, vintage and location produced the unit?
- How was the baseline established?
- Why is the abatement additional?
- Is it avoided emission or sequestration?
- What permanence period, buffer and reversal liability apply?
- What uncertainty and deductions were used?
- Is the buyer distinguishing direct reduction from offsetting?
- Can new evidence correct issuance and claims?
Conclusion: carbon tonnes may be equivalent; projects and responsibilities are not
The ACCU makes diverse abatement measurable and tradable. Without a common tonne, finance and compliance across projects would be far harder.
My judgement is that ACCUs can be interchangeable for a defined carbon-accounting obligation only when their method, additionality, monitoring, permanence and remedies remain auditable. Wider project quality and a buyer’s duty to reduce its own emissions should not disappear inside fungibility.
One ACCU can represent one institutional tonne. It cannot represent every truth about how, where and for how long that tonne was achieved.
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