Impact integrity as the guiding star
Sometimes the imperfect solution is what we have to work with
There is not a single right answer for many questions in the impact space. Rather, we commit to move toward our goals with evidence-led best efforts, humility, and integrity. This approach, often termed “impact integrity”, is underpinned by active engagement with current evidence, robust methods, best practice processes, shared definitions, transparency, governance, and commitment to ongoing learning.
The risks of acting without impact integrity are significant, including underperformance and real or perceived ‘impact washing’ (knowingly promising and claiming credit for more impact than it’s possible to deliver). Lack of impact integrity hurts us all. It has the potential to weaken and distort the market, and hinders growth by undermining investor confidence.
Impact integrity is also relational—it is affirmed by one’s peers in the field. Evaluation of evidence, process and governance play as significant a role in impact integrity as in science and strategic management. It is through evaluation—and the actions taken on the basis of evaluation—that we drive ongoing improvement. While being on the receiving end of those interrogations may sometimes be uncomfortable, the fact that it happens is sign of a healthy system. If some elements of impact are not working out as intended, openness about this offers an opportunity for everyone across the system to learn and improve. After all, getting things wrong is an important step on the path to getting things right. As Thomas Edison famously quipped, “I have not failed. I've just found 10,000 ways that won't work.”
Australian carbon market integrity under fire
There is a stir in Australia’s carbon markets this week after news coverage of analysis and criticism led by ANU’s Professor Andrew Macintosh relating to 2 of the 39 carbon abatement methods (Human Induced Regeneration (HIR) and Landfill Gas). This is hardly the first row over measurement or politics in the carbon market space. Last year the Australian Conservation Foundation (ACF) and The Australia Institute (TAI), published report ‘Questionable integrity: Non-additionality in the Emissions Reduction Fund’s Avoided Deforestation method’ that received significant press.
Collectively, these criticisms and robust debate offer opportunity to improve. Sensational and unsubstantiated claims in the press of “fraud”, “rorts” and “sham” are not in keeping with the principle of impact integrity and create distracting noise that get in the way of collectively learning and improving.
There are many indicators of impact integrity visible in the Australian carbon market.
All methodologies are required to have regard to legislated offset integrity standards, which include that only abatement activity that would not ordinarily have happened is credited and that any abatement credited is conservative
Method development is subject to extensive consultation with technical experts and broader stakeholders
There is an independent process of review for new methodologies and the ability for existing methodologies to be reviewed at any time if there are concerns about whether they still comply with the legislated offset integrity standards
Projects cannot be registered unless they comply with the requirements of a methodology
Claims for issuances of Australian Carbon Credit Units (ACCUs) are regularly audited by independent, third-party auditors
ACCUs are regulated as financial products under corporation law and there are licensing requirements for those who deal in ACCUs or provide financial advice about them
Good process doesn’t ensure that we deliver the desired outcome, but it suggests acting with impact integrity and in good faith.
Get mad! Then let’s learn and get better
If we agree that the processes above are within the bounds of best practice, it puts a floor under the conversation. We can be frustrated, disappointed, and even angry that some parts of the program have fallen short of impact intended. We all lose when that happens. Then we can turn our attention to coming to a shared understanding of where and how things have fallen short, how to repair those shortcomings, and how to integrate what has been learned into future practice.
Carbon credits are not perfect, nor are the carbon markets in which they are traded (in Australia and abroad). However, they are literally the best (and often only) lever we have for incentivising the protection of natural carbon sinks in private hands. As such they still have a key role to play in our transition to a low-carbon economy by creating a financial link between emitting greenhouse gasses and efforts to avoid/reduce emissions or increase our shared stock of natural carbon sinks.
It’s also critical that we can lift our eyes to the bigger picture that we all share: the urgent need for climate action. We emit about 60 Gt CO2-e annually and only issued about 17Mt of carbon credits last year, equivalent to offsetting a mere 3% of emissions—we still have a long way to go for offsets to be a meaningful component of decarbonisation. As is often said, there is no planet B. It is broadly agreed that protecting and growing natural carbon sinks is one of the MOST important things we could be doing. Letting a methodological debate distract us from that fact is deeply wrong-headed. We can do better.