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Carbon counting without the guesswork: Q&A with FCL proponent Jerry Toth

Mantled howler monkeys (Alouatta palliata).

The Pacific Forest is habitat to several endangered wildlife species including the mantled howler monkeys (Alouatta palliata). Image by Brian Gratwicke via Flickr (CC BY 2.0).

  • REDD+ projects aim to incentivize efforts that maintain standing forests, rather than cutting them down, by providing payments based on the carbon emissions kept out of the atmosphere.
  • But REDD+, which is short for “reducing deforestation and forest degradation in developing countries,” has been widely criticized lately, in part because skeptics say that the accounting methods are open to manipulation by developers aiming to sell more credits — credits that many not represent a verifiable climate benefit.
  • One alternative is the forest carbon ledger (FCL). FCL seeks to value the total amount of carbon in a forest and would provide payments based on how well that storage is maintained over time.
  • Mongabay spoke with Jerry Toth, co-founder of a conservation group working to protect and restore the last remaining remnants of the Pacific Forest of Ecuador called the Third Millennium Alliance (TMA). Toth said FCL may provide a more robust alternative to REDD+ carbon accounting.

The Pacific Forest of Ecuador holds a unique conflagration of ecosystems: Verdant cloud and mossy evergreen forests transition into semideciduous and dry forests closer to the coast that exist in a boom-and-bust life cycle driven by periodic rainfall. In just the last century, however, clearance for grazing and farmland nearly wiped out the Pacific Forest.

Despite the onslaught, slivers of old-growth forest brimming with biodiversity remain. For a decade and a half, a conservation NGO called Third Millennium Alliance (TMA) has been working to protect the intact remnants, restore splices of spent farmland, and stitch them together in what the group calls the Capuchin Corridor. If they succeed, it would mean maintaining at least a part of this global biodiversity hotspot as a critical refuge for threatened ecosystems and animals, like the Ecuadorian white-fronted capuchin monkey (Cebus aequatorialis) that lends its name to the corridor project.

Part of TMA’s work is to promote livelihoods, such as cacao farming, that provide for the needs of communities. Cobbling together the corridor in western Ecuador by addressing the root causes of deforestation has been revelatory for Jerry Toth, one of TMA’s co-founders.

“Everyone’s making economic decisions,” said Toth, also the group’s program director, of the small-scale farmers who live in the region. “They’re just doing their best to not be poor.”

Providing incentives to keep trees standing instead of cutting them down has been a key part of TMA’s strategy, he said. “If we can figure that out, that’s the game.”

One possibility was REDD+. Short for “reducing deforestation and forest degradation in developing countries,” REDD+ projects aim to reduce deforestation, thereby avoiding the release of climate-warming carbon into the atmosphere. Those “avoided emissions” can then be sold as carbon credits on the voluntary carbon market to companies and individuals, often as a way to “offset” their own emissions. The proceeds are then channeled back into forest conservation efforts, like the Capuchin Corridor project.

But the voluntary market and REDD+ have faced a withering storm of criticism recently. Studies have unearthed evidence that many claims about REDD+ credits overestimate their climate benefits. Buyers of those credits, from the United Nations to Delta Airlines, have been accused of greenwashing their operations with what skeptics see as faulty credits. And allegations of mistreatment and abuse of community members have tainted several high-profile projects.

Dany Murillo and Jerry Toth stand in a forest they helped plant ten years ago.
Dany Murillo and Jerry Toth stand in a forest in Camarones, Ecuador, they helped plant 10 years ago. Image by Liz Kimbrough.

Much of the technical criticism has centered on calculations of how many credits a project generates. These methods typically use counterfactual scenarios, which posit that a specific amount of deforestation would have happened in the absence of a REDD+ project and how much carbon would have been emitted as a result. Subtract from that the emissions from the deforestation that actually does happen — which, if the project is successful, would be lower — and you’re left with the avoided emissions to be sold as credits. The “additionality” of a project, meant to demonstrate that those carbon savings wouldn’t have happened without a REDD+ project’s efforts, is a critical element to the way the carbon market currently functions. But it’s also contentious, since it relies on comparisons to an alternative future that didn’t happen.

REDD+ methods are “subjective,” Toth said, and projects can boost the credits they can sell by assuming that lots of deforestation would have happened in that counterfactual scenario.

What’s more, REDD+ projects can qualify for payment even when deforestation continues to occur — as long as it’s less than the predicted amounts without the project.

Drawing on his studies in economics, Toth wanted to find a more reliable way to account for the climate-warming carbon locked away in a project’s forests. He said a new method called the forest carbon ledger (FCL) could offer substantive improvements compared with REDD+. The approach would start with an initial assessment of the forest’s biomass gleaned from satellite imagery and airborne measurements from technology such as laser-driven lidar. Then, communities and other forest stewards would receive annual payments, but only if the carbon stock rose or stayed the same year after year.

Toth said project developers wouldn’t be able to tinker with the numbers used in FCL accounting in the ways that REDD+ methods might allow them to. Ongoing monitoring is also more straightforward. And the additionality requirement, which can exclude, for example, Indigenous communities from REDD+ because their forests are not threatened, would no longer be a factor.

“They will be huge beneficiaries of FCL because they will no longer be penalized for their good track record,” Toth said.

Ecuadorian white-fronted capuchin monkey (Cebus aequatorialis)
The verdant cloud and mossy evergreen forests in the Pacific Forest are a critical habitat for the Ecuadorian white-fronted capuchin monkey that lends its name to the Capuchin Corridor project. Image by Andreas Kay via Flickr (CC BY-NC-SA 2.0).

Mongabay’s John Cannon spoke with Jerry Toth about FCL. This interview was edited for clarity and length.

Mongabay: How did the idea for FCL come about?

Jerry Toth: We wanted to gear our project up for carbon certification. There were periods where I was kind of anti-carbon market, and then I came around to the fact that it’s a potential funding opportunity. [I said,] let’s at least do all the due diligence, go through the process and get [the carbon] measured.

We did the ground measurements with a university here in Ecuador. We said, alright, we have all this data now. What does this mean for a REDD+ carbon benefit?

Going through the process, [we saw] up close all of the outsize influence that little subjective decisions have on the final number. As the project liaison, [I] had a lot of ability to steer certain things in certain directions that could, if you were a bad actor, easily skew in your favor. The classic example is overstating the potential threat. Our incentives are aligned with getting the biggest number of [credits] possible, and that happens with every single [REDD+] project. That’s why it’s come under so much fire.

The other issue that seemed nonoptimal was the way that REDD and the carbon market in general deal with additionality as a concept. When you first hear it, you’re like, yeah, that sounds smart; you don’t want to give money to a project that’s already going to happen. You want to give it to something that wouldn’t happen if it didn’t have the funding. That’s kind of the perfect scenario. But in the real world, there’s so much gray area.

I was trying to think of what would be a better way to do it. If we want to get rid of the subjective elements, what will happen? Let’s look at the current carbon stock of the entire area. Let’s try to quantify that, and let’s put a value on that. Then let’s use that as the basis for the project to be monetized. That takes away all the subjective stuff because, at that point, you’re just measuring what is currently there, and you’re not trying to guess what’s going to happen to it.

Mongabay: Would the plan still be to feed the credits into the voluntary market?

Jerry Toth: That would be great if the voluntary carbon market were to begin to see this [approach] as an option. Eventually, the idea would be, if you’re going to try to monetize the conservation of standing forests, that you should simply switch the carbon accounting methodology from REDD+ to FCL and go forward with all the same crediting.

Mongabay: Would you expect there to be fewer available credits?

Jerry Toth: Actually, one potential problem of FCL could be the opposite because, all of a sudden, you have a lot more land that’s eligible because you’re not worried about additionality. There [needs] to be more work done on that. For example, a well-protected forest preserve that has a history of protection wouldn’t be eligible for REDD+. A bunch of forests that are currently well-protected, doing this very important service of holding carbon in biomass [but] aren’t eligible for REDD+, would be eligible for FCL. I think, if anything, this opens the door to actually monetize every single forest in the world.

A cacao plantation in Ecuador.
A cacao plantation in Ecuador. Image by Tomas Munita/CIFOR via Flickr (CC BY-NC-ND 2.0).

Mongabay: Some Indigenous leaders are frustrated with REDD+ additionality requirements. Would they benefit from the changes envisioned with FCL?

Jerry Toth: [FCL] would work out really well for them. As we were developing this program, in parallel, I was advising this group that’s developing a REDD+ project in the Amazon with the Sarayaku community. We were comparing notes. They were also going through the same carbon developer, and even though they were dealing with a land area many times the size of [ours], their net carbon benefit came out lower, precisely because the Sarayaku have a better historical record of protecting their land. They get penalized for a good track record because there’s less additionality. Whereas in our region, where deforestation has been so rapid, the carbon numbers are super high because there’s a higher deforestation rate. You’re rewarding people who have been clearing forests in the past. It just didn’t sit right.

Mongabay: How is the relationship between people and forests in the Pacific Forest different than, say, forests in the Amazon?

Jerry Toth: Much of the Amazon is mostly managed by people who’ve been there for thousands of years and have this deep connection to land, whereas the Pacific Forest is almost entirely colonists from the last 100 years. You have people that don’t have a deep connection to the land, and so their decisions, more so than Indigenous communities in the Amazon, are economic-based rather than consciousness-based. If you’re looking at the big picture, the world will need both of those things. You will need this deep understanding of the fact that everything is interconnected.

For us, [the Pacific Forest is] this great economic experimental laboratory to test these ideas out and see results and then be able to adjust it and do it again. If we have success here, then I think it bodes well for a lot of other places, because this is such a tough place to do it.

Mongabay: Why is it such a good “laboratory” to understand how FCL might work more broadly?

Jerry Toth: I think it’s because of the historical deforestation rates and how quickly [the forest is] going. The regional estimates academically have been that 98% of original forest cover has been lost. You see it. It’s so visceral. You hear chainsaws all the time. You drive by, and you see a smoldering hectare. It’s happening so quickly.

It isn’t so much large corporations. There are wealthy landowners that will buy a big area of land and clear it and plant teak or something. But it’s a lot of small-scale farmers, and their decisions are entirely incentive-based. Everyone’s making economic decisions. [We thought,] what’s the system that we can devise that switches the [incentives]? Historically, the incentive has always been [that] you’ll make more money if you cut forests down. I think that the carbon market, for better or for worse, is a very promising example of that.

Mongabay: Are there other ways to support communities and help decrease deforestation at that same time?

Jerry Toth: Everyone loves to talk about nontimber forest products, [such as] cacao. But … agriculture is such a tough way to make money. If you’re a small-scale farmer [or] even if you’re a large-scale farmer, the margins are so tight. So if we have this outside source of funding, if people want to do it based on carbon, fine. If you want to do it based on water, great. If you can figure out how to do it based on biodiversity, awesome, [although] that seems like that’s going to be a very tricky thing. In our region, we have the ability to test these things and be able to see really quick results because you’re tracking deforestation, you see it happening, you institute a policy, and then you watch what happens. Does it stop? Does the forest continue to grow?

Harvesting cacao fruit in Ecuador. Image courtesy of Third Millennium Alliance.

Mongabay: How do you envision convincing people to look at a new approach that’s different from REDD+?

Jerry Toth: [REDD+ is] definitely the status quo. There’s a lot of vested interests. If you look at the big certifiers like Verra, they [have] their approved approaches. You’ve got national governments as well. They’ve gotten used to this methodology. So definitely there will be resistance.

But there are a lot of people who do work in the field that know it’s flawed. But so far, no one’s really come up with a better alternative. I think it’ll take a better system to be trialed in a few places and for that to have success.

Mongabay: What are your next steps on that front?

Jerry Toth: What we’re doing now is talking about it with more people. I would like more people to be asking questions to help find what the weak points are.

This is worth trying at least, and our project is ready to go. There’s so much potential. What happens with any economic levers, and [payments for ecosystem services] specifically, is that some things can sound really good on paper. Then when you put them into practice, you start to see a bunch of issues that come up. We all know that REDD+ is not terrible, but it’s really not optimal. Here’s FCL. Let’s give it a try. We just need to get more things out there [and then] go with the one that has the best strategies for success.

Banner image: The Pacific Forest is habitat for several endangered wildlife species including the mantled howler monkeys (Alouatta palliata). Image by Brian Gratwicke via Flickr (CC BY 2.0).

John Cannon is a staff features writer with Mongabay. Find him on 𝕏: @johnccannon


West, T. A. P., Wunder, S., Sills, E. O., Börner, J., Rifai, S. W., Neidermeier, A. N., … Kontoleon, A. (2023). Action needed to make carbon offsets from forest conservation work for climate change mitigation. Science, 381(6660), 873-877. doi:10.1126/science.ade3535

REDD+ projects falling far short of claimed carbon cuts, study finds

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