By Charles Bedford is Chief Impact Officer at Carbon Growth Partners
Two big carbon market announcements were made in the past few weeks. First, the Coalition for Rainforest Nations indicated that it will be accelerating the REDD.plus platform with an issuance from Gabon this fall, putting developed nations on notice that their long-promised funds for forest conservation outcomes in the developing world are being called. And the Integrity Council for the Voluntary Carbon Markets (ICVCM) (or more accurately perhaps – the “Verified Carbon Markets”) issued its draft Core Carbon Principles, outlining its view of what high quality means for the international carbon market.
Both of these efforts are among the thousands of actions that the world needs to do fast and well to combat catastrophic climate change. The job ahead is huge: reducing GHG emissions from 50 gigatonnes of carbon a year to zero and removing another many hundreds of gigatonnes of carbon from the atmosphere by 2050 is necessary to ensure our planet can host our species – and millions of others – for centuries to come. For context the carbon market is currently generating a few hundred million tonnes of abatement a year.
The two announcements – released just days apart – portend positive progress and each is meritorious in its own right. But that’s where the similarities end. There are significant inconsistencies between a robust, private-sector financed market and country-to-country ‘markets’ that risk confusing and conflating what is already a complex arena. Reduced deforestation in countries like Gabon must happen at two distinct levels, with a corresponding and appropriate source of funding at each level. Countries like Switzerland or Norway or the US, should be negotiating to purchase carbon sequestration outcomes from countries like Gabon, providing funding for the sort of economic development that has traditionally been provided by the extractive industries. And global companies like Amazon, Microsoft or Shell should be financing high-quality, independently audited, project-level abatement that removes or avoids emitting carbon into the atmosphere. Both emitting countries and emitting companies need to step up, but the mechanism for financing these carbon outcomes are different, and appropriately so.
What has been missing, and what will likely remain a conundrum for some years to come, is a fit-for-purpose system that manages carbon finance and compensation from the very local (driving personal behavioural change) to the global and political (how will countries hold each other accountable for their climate pledges and how will they help each other through finance to achieve them). These challenges are beginning to be met through the REDD+ discussions around how to embed, or “nest”, the work of indigenous peoples to gain title and protect their forests within a national forest conservation plan and a country’s UN registered climate goals.
Meanwhile, there are other, better, mechanisms, in development to scale REDD+ in a more accountable fashion. Verra’s Jurisdictional and Nested REDD is a standard focused on ensuring that projects fit within and roll up to larger country goals. The LEAF coalition is a group of companies that is pushing for clearer accounting around country goals and outcomes using ART’s TREES methodology. Finally, many countries are already incorporating REDD projects into their NDCs, which is a fast track to higher certainty around accountability and tracking results.
In the midst of this confusing jurisdictional mess, corporations will need to keep their focus on quality projects, from jurisdictions that are friendly to a project-based approach that is incorporated in the national laws, and from standards that have third party, arms-length distance from the project owners, whether those owners are countries or private parties.
What we need now is for governments to follow the lead of Peru and Switzerland by closing deals with Gabon, Belize, Honduras and others to put in place forest conservation frameworks at the national scale, and for corporations to finance high-quality REDD+ projects that are sanctioned by the IC-VCM.
Climate change is the proverbial knotty problem, and, following the UN’s endorsement of market mechanisms in Glasgow and REDD+ in Warsaw and Paris, a number of excellent solutions are rising up to help solve this problem. Improving the projects, methodologies and standards is happening every day through increased scrutiny by buyers, rating agencies and NGOs as well as by groups like the IC-VCM. And bilateral collaboration between developed and less developed countries is beginning to work—providing needed finance for human development and mitigation of climate risk. That’s the way to scale the carbon markets—fast and well.
Charles Bedford is Chief Impact Officer at Carbon Growth Partners and an adjunct professor at Hong Kong University of Science and Technology.