Australian companies should be allowed to fund “fair dinkum” climate change projects in Pacific island nations as an offset against their own carbon emissions, a former top energy adviser to the federal government says.

Kerry Schott, who chaired the Energy Security Board from 2018 to 2021 and worked on the redesign of the National Electricity Market, believes Australia has a responsibility to help the region bear the brunt of climate change.

“Our Pacific neighbours, as we know, are facing an existential threat,” she told the National Press Club in Canberra on Tuesday.

“If somebody has international offsets of integrity and are fair dinkum – particularly in our Pacific neighbours – we should be allowing them.”

Dr Schott, now chair of the not-for-profit Carbon Market Institute, said Fiji already is interested in playing a role in Australia’s mission to lower carbon emissions.

Samoan Prime Minister Fiame Naomi Mata’afa has urged Australia to do more for its neighbours by sponsoring civic participation and consulting on issues affecting them.

The inclusion of carbon offsets in the Albanese government’s proposed changes to what’s known as the safeguard mechanism, which requires Australia’s largest industries to reduce their carbon emissions, is a point of contention with environmental groups.

Dr Schott believes credits in exchange for the right to emit a set amount of carbon are essential for transitioning to a net-zero future.

That’s because the price of credits will become exorbitant, she said.

Federal crossbenchers including NSW independent MP Sophie Scamps are concerned that allowing companies to pay other people for their carbon emissions will safeguard the future of the fossil fuel sector.

The government is keen to have its changes to the safeguard mechanism clear parliament before the end of next week so they can apply from July 1.

To do so, the government needs the support of the Greens and two other crossbenchers in the Senate.

Joanna Guelas
(Australian Associated Press)