Australian councils have been told to cut emissions instead of spending millions on overseas carbon offsets

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There are renewed questions about Australian councils’ use of international projects to offset local carbon emissions, following a Guardian investigation which found that 90% of rainforest credits issued by one leading company were likely worthless.

Verra’s study, a world leader in the fast-growing market for voluntary offsets, found that most rainforest offset credits were likely “phantom credits” and did not reflect real carbon reductions.

The company strongly disputes the study’s conclusions, has strenuously defended its designs, and has questioned the methods used to undermine their credibility, claiming they fail to capture the true impact of projects on the ground. They say that explains the difference between the credits it approves and the emission reductions estimated by scientists.

But the revelations have mobilized critics of public entities to use offsets instead of focusing on reducing their own emissions.

Fifteen local governments in Australia, including central Sydney, Melbourne, Brisbane and Adelaide, are making trade offsets through the Verra registration platform, spending millions of dollars to claim carbon neutral status.

While the vast majority do not apply to the rainforests the Guardian investigated, and its findings do not apply to them, they mostly concern overseas projects, which raises questions as to why local governments are not spending this money trying to reduce their own emissions.

Brisbane City Council, Australia’s largest local government, spent $6 million last year offsetting its emissions, including storing 130,000 tonnes of carbon emissions for a landfill gas recovery and power generation project in China.

Lily O’Neill, a senior researcher on the future of climate at the University of Melbourne, described it as a “joke” that an organization whose primary function is waste disposal would spend emissions reduction money on the same offshore activity.

O’Neill said compensation is only important as a last resort for unavoidable emissions.

“Is anyone [at council] go out and see if these carbon credits are being generated the way they say they will be?” she said.

Brisbane City Council did not respond to Guardian Australia’s questions about what due diligence it does for offshore offset projects.

The Labor opposition in Brisbane, led by Jared Cassidy, has long been critical of local government spending and has described the Guardian’s inquiry as a “wake-up call”.

Related:Qantas, Origin and other Australian companies have called for a review of the effectiveness of foreign rainforest carbon credits

“The only large-scale action that the council can take to reduce city-wide emissions is to remove organic material from the landfill,” he said. “You can’t just buy yourself out of this exit.

“If you want to make real change, start in your own backyard.”

O’Neill said high-value offset projects are at work, including emission reduction projects led by First Nations.

Brisbane was among the councils that funded some Australian initiatives, including the indigenous-led management of savannah fires in Arnhem Land. But more than 90% of Brisbane City Council’s offset funds were spent on overseas projects.

Many other councils – including Woollahra in Sydney, Subiaco in Perth and Moreland, Moonee Valley, Maroondah and Yarra in Melbourne – have obtained 100% of their loans from offshore renewable energy projects.

Queensland University of Technology Vice Chancellor for Sustainability and Research Integrity, Kerrie Wilson, also advised local governments to “look at things in their own backyard” as they strive to become carbon neutral.

“It’s difficult because it requires focusing on our internal policies and our own practices and our own behaviors rather than relying on compensation,” she said.

Wilson said QUT had invested in a solar farm in west Queensland in an effort to become carbon neutral.

“You have more oversight, transparency and confidence in integrity if they are designs you can touch, feel and identify,” she said.

Brisbane City Council did not respond to questions about whether it was reviewing its offset scheme, but said it was now undertaking a “major food waste recycling pilot involving 6,000 households in 30 suburbs”.

A spokesman for the City of Sydney said the city has been “buying an increasing share of high-quality local carbon offsets” over the last few years and has been aiming for 100% high-quality Australian regenerative offsets by 2025.

The city of Melbourne is believed to be reviewing its past and future offsets following a review by Chubb this month that recommended the creation of a new integrity body for Australia’s carbon credit scheme.

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