- Criticisms of the voluntary carbon trade and forest conservation strategies like REDD+ have centered largely on the carbon accounting methods used to calculate credits.
- Each credit traded on voluntary markets is supposed to represent the reduction, avoidance or removal of 1 metric ton of carbon dioxide from the atmosphere.
- But recent science has raised questions about how REDD+ and other types of project figure out the number of tons of emissions saved.
- The process relies on establishing a baseline rate of deforestation against which a project’s emissions-reducing or -removing success is measured. But critics say the process can be faulty and that the conflicts of interest of the parties involved in setting the baseline have not been addressed until recently.
This is the fourth article in our five-part series on forest carbon credits and the voluntary market. Read Part One, Part Two, Part Three and Part Five.
SEN MONOROM, Cambodia — In eastern Cambodia, the Wildlife Conservation Society office is quiet on a Friday morning in early April. Normally a hive of activity, the office has wound down in preparation for Khmer New Year.
Olly Griffin, WCS Cambodia’s forest carbon lead at the time, has stuck around in Sen Monorom to talk to me about the REDD+ project connected to the nearby Keo Seima Wildlife Sanctuary, which WCS facilitates and where I spent a week visiting nearby communities supported by the project.
REDD+ is short for reducing emissions from deforestation and forest degradation. REDD+ project developers can then sell those “additional” carbon savings to individuals and companies interested in mitigating their own impacts on the climate. The proceeds from these carbon credit sales — at least some of them — are then supposed to fund forest conservation tied to community development.
Crucial to the calculation is figuring out how much deforestation would have occurred without the project in place. Answering that question typically means creating what scientists call a “counterfactual” to establish that baseline. Rates of actual forest loss are then compared to that hypothetical scenario, and then the difference in emissions between those two cases yields the amount of emissions reduced. It’s admittedly a difficult figure to nail down.
“The fundamental issue with all of these things is that there is no reality you can measure to confirm that alternative baseline,” Griffin said. “That’s a different timeline in the universe.”
As elusive as establishing a solid baseline might be, it’s also essential for sorting out whether REDD+ projects like Keo Seima actually provide climate benefits. The process has spurred a reckoning within the trade of carbon credits centered around another key question: How much do REDD+ projects really benefit the climate and address threats that cause deforestation and degradation?
The effort to find concrete answers has seen nearly every corner of the carbon trade clouded in controversy of late. Everyone has been affected, from the buyers, which are often multinational, billion-dollar corporations, to the projects on the ground like those in Cambodia’s Mondulkiri province, where the ostensible goal is to keep the forest standing.
At the center of much of the debate is the U.S.-based nonprofit organization Verra, which certifies about two-thirds of the credits traded on voluntary carbon markets, including those that come from REDD+, as well as renewable energy and other types of projects meant to cut emissions. Many of the questions about how much additional carbon savings projects can claim, as well as the permanence of their activities and the impacts on surrounding communities and forests, lead back to Verra and its requirements through its Verified Carbon Standard, or VCS.
Keo Seima at a crossroads
The nearly 300,000 hectares (741,000 acres) of Keo Seima Wildlife Sanctuary host more than 1,000 species. More documented plants, animals and other life forms live in these tropical forests than in any other protected area in Cambodia. Some 75 species threatened with extinction live here, including the Asian elephant (Elephas maximus), the black-shanked douc langur (Pygathrix nigripes) and the southern yellow-cheeked gibbon (Nomascus gabriellae). It’s also one of the best-studied reserves in the country, in part supported by the REDD+ project that covers 167,000 hectares (nearly 413,000 acres) of Keo Seima’s forests.
WCS’s involvement in REDD+ can make the office in Sen Monorom feel as much like a development organization as one founded more than a century ago for the conservation of species. But making that distinction in mission is illogical, I’m told by nearly everyone involved: Communities are very much the key to protecting species and their forest habitat, especially in a place like this. And that makes the time and money spent on education, vocational training for alternative livelihoods, and projects like improved sanitation good investments for safeguarding biodiversity, staff members say.
The communities themselves are also at something of a literal and figurative crossroads. The 20 communities that are part of the project in and around Keo Seima are mostly Bunong, an Indigenous people with a generations-long relationship with the forest. They also face high levels of debt. Emiel de Lange, a conservation impact technical adviser with WCS Cambodia, said more than half of households in the project owe money.
“We think there’s over a million dollars of loans that are collateralized with land,” he said.
In nearby Sen Monorom, the provincial capital, many microlenders have set up shop.
That debt can be a surreptitious driver of deforestation, de Lange said. For a family, owing money can increase pressure to clear more land for farming to keep up with the payments. Some may even sell their land when they need cash for something unexpected, like a medical emergency, especially as more outsiders have moved in, thanks to relatively affordable land prices and a paved road that now connects Mondulkiri with Phnom Penh, Cambodia’s capital. These outside forces can disrupt the balance that exists between people and forests.
Given this complicated set of factors, the question the Keo Seima REDD+ project must answer is: How much deforestation would result if the project weren’t there to intervene?
From Griffin’s perspective, the potential pressure on Keo Seima is about as severe as it can get. For the forests in and around the wildlife sanctuary, “It’s difficult to overstate the risk of deforestation.”
A question of methods
Early in 2023, reporting by U.K. newspaper The Guardian, German news weekly Die Zeit and nonprofit journalism outfit SourceMaterial suggested that the calculations of the baselines for a number of what were considered successful REDD+ projects, Keo Seima among them, were faulty. As a result, more than 90% of the credits produced didn’t have the claimed climate impact.
Criticisms that REDD+ project developers may inflate baselines aren’t new. But in this case, the journalists based their analysis on recent studies that tried to put numbers to the problem. Most prominent among the studies was one led by Thales West, an assistant professor of environmental geography at Vrije Universiteit Amsterdam in the Netherlands. (In January 2023, West’s paper hadn’t yet been vetted by other experts. It eventually did go through peer review and was published in Science, one of the world’s leading journals, in August, though some scientists have taken issue with the West-led team’s methods.)
The research by West and his colleagues looked at 26 REDD+ projects on three continents. Instead of using the counterfactual method that projects like Keo Seima used to establish their baselines, West and his colleagues calculated baseline deforestation for the projects with “synthetic” controls — basically amalgams of different places that shared similar characteristics with the project site.
Producing a “reliable baseline” is critical to estimating an accurate number of carbon credits, which is also a key measure of a project’s benefits to the climate, West told Mongabay. But it’s also an inherently uncertain process. “The thing is, there’s no perfect alternative,” he added.
Still, West said the methodologies that have been allowed by Verra’s VCS, the certification program that so many REDD+ projects aim to comply with, are “inherently flawed.”
“That’s really at the core of the problem,” he said.
When West’s team used the synthetic control approach, they found that projects tended heavily toward overestimating the hypothetical deforestation captured by the baseline, thus allowing them to show that their project had a greater impact. In turn, that would lead to the generation of more carbon credits. The team concluded that more than two-thirds of the credits generated by the projects they looked at weren’t tied to significant reductions in deforestation.
Part of the issue, West said, is that projects vying for VCS certification used to be able to choose from a number of different methodologies to calculate baselines. It’s clear to West, himself a former project developer and auditor, that the incentive is to make the project look as effective as possible.
“These are people with a clear conflict of interest,” West said.
One potential remedy West advocates is the periodic reevaluation of a project’s baselines, including before it begins issuing credits.
“That’s not something that projects are willing to do because they don’t have to do it,” West said. “I would say no method is perfect. The data is not perfect, right? We need to work with what we have. That’s why it’s so important to have the robustness checks.”
Verra has since updated its REDD+ methodology for projects aimed at avoiding “unplanned” deforestation, like Keo Seima’s, which it says will reduce conflicts of interest and increase objectivity. As part of the changes, the organization will now take the lead in setting baselines, which will be reevaluated every six years.
In the VCS certification process, three different groups are involved in the calculations: the project developers themselves, who formerly came up with the initial figures; auditors, who are hired by the project developers; and Verra’s experts, who run their own checks and now are in charge of setting the baselines. Verra sees this check-and-balance process as ensuring thorough consideration of how many carbon credits are issued.
However, critics contend that each of the groups has a stake in boosting the number of credits a project claims to produce. And they say the relationship between developers and auditors can be too cozy. In September, the Berkeley Carbon Trading Project, a California-based research and outreach program, released an assessment of REDD+ projects, to which Thales West was a contributor.
“Project auditors, who are hired by the project developers and so have incentives to be lenient in order to be hired again, did not adequately enforce compliance with Verra’s standards, including conservativeness in emissions reduction estimates,” the team wrote.
“Our analysis shows that verifiers see their role as ensuring that the emissions calculations used are allowed, and not that they are accurate or conservative,” the authors wrote. “One verifier approved a zero fire risk rating for a project in which that verifier had directly observed a fire during the site visit.”
The Berkeley team “found evidence of widespread over-crediting” due to several factors.
The response
To Griffin, the reactions to the reporting painting all REDD+ projects with the same brush of suspicion have stymied what could be a vigorous discussion aimed at improving the integrity of carbon credits and, ultimately, the benefits they can bring to the climate, communities and biodiversity.
“It’s not so much that people like West have discovered the truth and found out that we are wrong,” Griffin said. “It’s that they think their approach is a different and more robust way of doing what we have done with the methodologies.
“There’s a healthy debate to be had there about what is the right way,” he added. “It’s frustrating that the conversation has not been that healthy.”
Part of the issue has to do with the uncertainty around how much a REDD+ project like Keo Seima actually reduces deforestation and, as a result, carbon emissions. Researchers generally agree the precise figure is unknowable since it stems from comparisons with an alternate reality that never existed. But that uncertainty leads to “the implicit assumption that anything away from perfection is a failure,” Griffin said.
He said he disagrees with some of the ways in which West and his colleagues came to that conclusion — for example, the way they approached the creation of the “synthetic” controls that led them to those conclusions. Synthetic controls pull together data from a variety of different “donor” locations. The accuracy of conclusions drawn from the deforestation comparisons depends on accurately replicating a situation that likely would have played out had the project not been present. In the case of Keo Seima, some of the “donor” areas West and his colleagues used weren’t all that representative of the project area, Griffin said.
Verra released a similar critique of the West-led team in response to the accusations in The Guardian’s reporting.
“Specifically, they reach incorrect conclusions because they rely on synthetic controls that do not accurately represent the pre-project conditions in the project area, as the studies’ authors themselves acknowledge,” the organization wrote in a defense posted on its website in January 2023. “[T]his approach is not suitable for REDD projects because of the difficulty in finding points that match inside and outside the project area at the start of the project.”
Ed Mitchard is a co-founder and chief scientist at Space Intelligence, a U.K.-based company that provides monitoring data to nature-based solution projects and mapping services to Verra. In his view, the West-led study has “some serious methodological flaws.” He and his colleagues recently published a rebuttal laying out their case.
For one, it uses the global forest change data set from Matt Hansen and his colleagues at the University of Maryland. While it’s widely used for monitoring forests at the global level, “It has quite large errors regionally,” making it unfit for the comparisons that West and his team used in their study, Mitchard said. The data set wasn’t designed to be used in this way, he added.
‘Continuous improvement’
Throughout 2023, Verra rolled out several updates aimed at making it more difficult to issue too many credits, among other developments. It said it embarked on these reforms, including the release of a new REDD methodology in November, before The Guardian’s investigation.
Such releases are part of a larger process, said Toby Janson-Smith, chief program development and innovation officer with Verra.
“This is absolutely a work in progress, as it always will be,” Janson-Smith told Mongabay. “It’s about continuous improvement. It’s about creating the best possible standards and methodologies at the time, using the best science and practices and thinking.”
Those changes include removing the ability of project developers to choose which methodology they apply and applying new labels for carbon credits. Verra has also taken a stance on the issue of permanence, Janson-Smith said.
The Integrity Council for the Voluntary Carbon Market, or ICVCM, a governance body, released updates to its framework that increased the length of time considered permanent from 30 years to 40 years to qualify for the group’s Core Carbon Principles label. That would mean that projects in which reductions in deforestation did not last at least four decades would have to compensate for any credits associated with that missed target. Verra recently applied to have its VCS program assessed for its compliance with the Core Carbon Principles, which the group says should instill more confidence in consumers looking to purchase high-quality credits.
Amid all the turmoil surrounding the issuance of carbon credits, supporters of REDD+ and the voluntary market say they’re a path for private financing into forest conservation, especially absent more significant government-required or international action addressing both climate change and deforestation.
“It’s a great way of getting rich consumers and Western companies that have emissions they can’t get rid of to pay something and putting that money to deal with a nature crisis we have going on,” Mitchard said.
Mitchard added that neither voluntary carbon markets nor REDD+ would solve the problem of deforestation. That will require eliminating the policies in place that continue to incentivize the destruction of forests for profit — activities such as agriculture, ranching and logging. But if someone has $100 they can also put toward offsetting their emissions, he added, it could make a difference.
“If you give that to people who currently have little choice but to cut down forests and [the chance] do something different with their lives to protect that forest, that’s a very valuable use of that $100, both in terms of the atmospheric carbon dioxide levels, but also people and biodiversity,” Mitchard said.
Finding the ‘sweet spot’
The reduction and eventual elimination of the use of fossil fuels for energy is the single biggest step necessary to cap emissions and stall climate change. In fact, the Corporate Net-Zero Standard of the Science-Based Targets Initiative (SBTi) requires that “most” companies reduce their emissions by at least 90% before they can offset, or “counterbalance,” their remaining emissions with permanent carbon storage or removal credits. The SBTi aims to give companies a route to zeroing out their emissions by 2050 that lines up with the 2015 Paris Agreement goal of halting the global temperature rise at 1.5° Celsius (2.7° Fahrenheit) above pre-industrial levels.
Likewise, there are hard-to-eliminate emissions that are part of supply chains. Getting rid of those emissions is currently not practical, because viable alternatives are either too expensive or simply do not exist at the scale required.
That’s where proponents of carbon credits and the process of offsetting emissions say the use of carbon credits can make a difference — by targeting those residual emissions. A common charge against these companies is that they’re using these credits as a way to avoid addressing their own carbon footprint. In essence, this critique holds that they buy credits, which might be of questionable value to the climate, rather than taking the often-challenging steps of overhauling their operations toward reducing their carbon emissions.
Mitchard said his experience with companies is that those interested in purchasing carbon credits are typically more engaged in reducing their carbon footprint. A recent report from Ecosystem Marketplace, an information service on environmental finance and markets run by the nonprofit Forest Trends, found that companies that invest in carbon credits are nearly twice as likely to have worked on eliminating their own carbon emissions as well.
Finding a balance between stringent requirements and terms that actors can comply with is important, said Frances Seymour, who was a distinguished senior fellow with the World Resources Institute at the time she spoke with Mongabay, adding that these projects are difficult to implement.
“There’s always going to be some risk,” she said. “The only way to drive risk to zero is to not have the market at all.”
Demanding perfection carries the risk of ending a stream of financial support for forest conservation that has channeled $3 billion to forest conservation over the past two decades.
“The concern is that if you set those standards so high that nobody can meet them, then you don’t have a market,” said Seymour, who is currently with the Office of the Special Presidential Envoy for Climate in the United States, though her views do not necessarily reflect the views of the U.S. government or the Special Presidential Envoy. On the other hand, “You want them to be high enough to ensure that this is additional climate action and that the most vulnerable people on our planet [are] not made worse off, but, no, better off.
“The concern is that all of these initiatives get it right in that sweet spot,” she added.
It’s that optimal balance that Olly Griffin said he hopes WCS and its partners in the Keo Seima REDD+ project have zeroed in on. The people of the 20 communities involved are engaged in the process of protecting forests and developing local economies, WCS says, and many community members who spoke with Mongabay in April say the project has made a positive difference in their lives.
What’s more, Griffin said, more forest is standing today than there would have been otherwise. He offered an example of what might have happened to Keo Seima had REDD+ not been a part of its trajectory.
Snoul Wildlife Sanctuary (sometimes spelled Snuol) once sat southwest of Keo Seima. Created in 1993, nearly a decade before Keo Seima, it was also home to hundreds of documented species. But a road built through it brought a rapid rise in the number of people living nearby. Soon, pieces of the sanctuary were carved out for agricultural plantations, and deforestation surged. By 2018, so little viable forest remained that the government removed Snoul’s protected area status.
“The whole thing is gone,” Griffin said. “You wouldn’t even know it used to be a protected area when you drive through. It’s just cassava, cashew [and] rubber plantations.”
Compare that to Keo Seima, he said, and the importance of their work becomes clearer, even in this relatively small patch of forest in eastern Cambodia.
“There has been deforestation,” Griffin said, “but it’s been reduced compared to what would have happened.”
Banner image: A long-tailed macaque (Macaca fascicularis) in Borneo. Image by John Cannon/Mongabay.
John Cannon is a staff features writer with Mongabay. Find him on Bluesky.
Read Part Five:
https://news.mongabay.com/2024/01/the-future-of-forest-carbon-credits-and-voluntary-markets
Citations:
Mitchard, E. T., Carstairs, H., Cosenza, R., Saatchi, S. S., Funk, J.,Quintano, P. N., … Nowak, E. (2023). Serious errors impair an assessmentof forest carbon projects: A rebuttal of West et al.(2023). arXiv Preprint.doi:10.2139/ssrn.4661873
West, T. A. P., Wunder, S., Sills, E. O., Börner, J., Rifai, S. W., Neidermeier, A. N., Frey, G. P., & 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
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