By Kevin Conrad, co-founder of CfRN and executive director; and Federica Bietta, co-founder of CfRN and managing director

Why corporate buyers can trust REDD+ Sovereign Carbon Credits

Concerns over the quality of carbon credits from Verra’s forestry projects are making headlines again, calling into question the validity of REDD+. This is a shame since ending deforestation is key to achieving a 1.5C world. But there is a solution, the UNFCCC REDD+ mechanism.

A recent article in The Guardian exposed (again) the atmospheric integrity of the voluntary carbon market (VCM) and deemed 90% of Verra’s avoidance based forestry carbon credits as atmospherically worthless. Despite a recent promise to do better, that’s very unlikely as they continue to sidestep the many legitimate methodological flaws highlighted. They are right.

With carbon avoidance, a project is NOT required to reduce emissions themselves. Rather, they get to use an existing emissions source elsewhere for reference, with no obligation to reduce those emissions. Instead, they apply that counterfactual emissions rate to their project. No surprise, the project claims success. So, they sell “credits” to offset another emissions source. The two actual emission sources continue (and may increase.) And emissions in the project can increase too if lower than the reference area. Huh?

To clarify, the difference between emissions avoidance and reduction can be illustrated by looking at how baselines are calculated.

Time for a reality check. We cannot allow avoidance for offsetting. Period. To succeed, we must sequentially reduce emissions from historical emissions levels (not avoid them) … and fast.

Back to rainforests. Thankfully, Verra’s avoidance-based forest projects are not REDD+.

THE REAL REDD+

REDD+ under the UNFCCC was started by PNG and Costa Rica in 2005. Enshrined in Article 5 of the Paris Agreement, it’s the only globally agreed carbon standard that will help us slow, stop, and reverse global deforestation. From the beginning, REDD+ was national in scale and based on data driven reference levels and emissions reductions that are additional. No avoidance permitted, ever!

There are two generally accepted methods to produce a national reference level under the UNFCCC, calculate a) a historical average or b) a regression of historical data. Reference levels must be updated, using the lower numbers achieved in the last reference level, every 5 -10 years – best practice being 5 years.

For this reason, all 192 nations of the world recommitted to the REDD+ framework of Article 5 of the Paris Agreement at COP27 in Egypt under both the COP and the CMA. The COP27 Sharm El-Sheikh Implementation Plan reaffirms that private finance is welcome to support 5.2 credits, under the decisions 1/CP.27 paragraphs 79 & 80 and 1/CMA.4 section XVI art 47.

Rainforests are an important part of a climate solution as they remove and store carbon from the atmosphere. But they release it back when burned or otherwise destroyed. For these reasons, the UNFCCC and the Paris Agreement have included them within a global framework.

While Article 5 of the Paris Agreement refers to a framework of around 25 COP decisions, these decisions function as a mechanism including a bevy of requirements to qualify, a robust set of standards, and stringent independent verification.

Let’s be clear. After 10 years to finalise all the methodologies, the UNFCCC REDD+ mechanism is now delivering with the necessary speed and scale to keep 1.5C possible – over 10Gt of emission reductions and counting.

MRV SYSTEM

No other carbon standard offers a more comprehensive and robust review system than UNFCCC REDD+. UNFCCC reviews are fully transparent and available on their website. For a full overview, please go to UNFCCC REDD+ MRV.  (Find simple graphics here and here).

The strength and rigour of the UNFCCC REDD+ is due to 10 years of decisions agreed by over 192 countries at COPs. Only when all the UNFCCC requirements are met does UNFCCC approve a country’s carbon reductions, called REDD+ Results – which takes several years to complete. Then, a country may receive results-based payments from public, multi-lateral, or private finance.

UNFCCC reference levels must be transparent, considering historical data, allowing flexibility to accommodate national circumstances and capabilities, while pursuing environmental integrity and avoiding perverse incentives. Information should be transparent, complete, consistent with guidance agreed by the COP. Emission reductions and removals must demonstrate additionality.

Countries are encouraged to go through a rigorous Quality Assessment and Quality Control process (Q/A Q/C). Over 80% have. Further, quality is increasing as satellite data are becoming available with higher frequency and higher resolution.

The UNFCCC Secretariat may request a country to make necessary improvements and resubmit, effectively rejecting a submission. In instances where a countries’ data, such as the Forest Reference Emissions Level (FREL), are rejected, the entire process must begin again.

In theory, sovereign nations have the right to ignore the UNFCCC review, but none have. It makes no sense for a country to ignore a review or not respond to UNFCCC expert comments. The UNFCCC REDD+ MRV process is publicly available online and ignoring negative assessments will compromise financial market values.

Since inception, very few countries have successfully gone through the UNFCCC’s MRV process on first attempt. In fact, 85% of the countries that have submitted FRELs under REDD+ have been knocked back because the submission wasn’t approved by the UNFCCC. Similarly, about 48% of the countries that have submitted for REDD+ Results have also been knocked back and resubmitted.

TABLE 1: Proportion of Modified FREL/FRLs and REDD+ Results under UNFCCC Modified FREL/FRL submitted to UNFCCC after Technical assessment week

TABLE 2: Modified REDD+ TA submitted to UNFCCC after technical analysis week

Source: https://redd.unfccc.int/submissions.html

INDEPENDENT VERIFICATION

Independent assessments, part of the verification process, are required of both reference levels and results. Both are led by independent UNFCCC experts selected from a roster of accredited experts. Final Technical Assessments are posted for public review.

The UNFCCC independently selects each expert; one from a developing and one from a developed country. The reviewers are not compensated, and they must be independent. They cannot be nationals from the country that is under review. Before a reviewer qualifies as an expert, the individual is required to pass a UNFCCC course of study, based on a 1000-page reading list. Rarely do experts pass the first time.

REDUCTIONS. REMOVALS. NETTED

The Paris Agreement only credits real reductions and removals which are only approved after the emission reductions can be proven based on an independent review of past emissions levels. The UNFCCC REDD+ does not allow cherry picking areas. Rather, all areas of gain and loss must be netted out across the entire country and be reported in subsequent reporting cycles – thereby netting out leakage and addressing permanence.

SCALE

Many miss the important differences around national, jurisdictional and project scales. The Paris Agreement requires national-scale action for REDD+. While countries were permitted to ‘demonstrate’ REDD+ with smaller areas, submissions are now almost exclusively national. National-scale accounting avoids leakage and the Paris Agreement requires reporting in subsequent NDC cycles to address permanence and negate the need for buffers.

Both the World Bank and ART-Trees allow jurisdictional or subnational scale action. This encourages gaming and exposes credits to leakage and permanence risks. Countries have picked small areas for crediting and are permitted to largely ignore deforestation in other parts of the country. Further, they also allow gaming for countries with low deforestation by allowing creative baselines. Sadly, our atmosphere can’t ignore those additional emissions.

Let’s not waste any more time discussing the VCM project approach – while projects may be great for voluntary standards, project developers, and rating start-ups, they are a disaster for our climate and for most local communities. 

SOVEREIGN REDD+ CARBON STANDARD

The UNFCCC REDD+ sovereign carbon standard is fully integrated within the Paris Agreement and may complete the Article 6.2 review to become an Internationally Transferred Mitigation Outcome (ITMO) for post-2021 vintages and beyond. For the prospective buyer, they:

• support sovereign action to slow, stop and reverse deforestation and reduce emissions.
• guarantee full compliance with the Paris Agreement.
• purchase real emission reductions and removals, thereby eliminating avoidance.
• secure sovereign authorisation and National adjustments.
• ensure that over 95% of the carbon revenues back to rainforest countries.
• safeguard purchases via best-in-class UNFCCC MRV.
• assure inclusion within the global carbon accounting system.
• avert double counting by purchasing emissions reductions included in NDCs
• stop leakage via national-scale emissions reduction systems.
• secure permanence through the sequential NDC processes.
• engage best in class carbon registries, trading, custodial and settlement platforms.

Sovereign carbon credits, called REDD+ Results Units (RRUs) must be authorised, issued, and tracked throughout their lifecycle via the issuing country’s national registry, as part of the global carbon accounting system established by the Paris Agreement.

For clarity, the Paris Agreement does not use the terms “carbon offsets” in its text, nor did the Kyoto Protocol, but establishes a global standard to measure, report, and verify emission reductions and removals.

The REDD.plus platform offers the commercial infrastructure required for rainforest nations that fully comply with the Paris Agreement to sell sovereign REDD+ carbon credits globally. It exclusively uses the globally agreed Paris Agreement decisions as the standard and UNFCCC REDD+ MRV process for verification.

CONCLUSION

VCM has sought to discredit verified emissions coming from the Paris Agreement. They worry the speed and volume of those emission reductions will destroy voluntary markets. The facts are that we need emissions with that speed and scale to succeed. Thus, we should be applauding those developing countries for their success. So far, they have been left holding the bag. The UNFCCC REDD+ mechanism is the future. And our future on earth is more secure thanks to developing country leadership!

Sources:

• UNFCCC REDD+ Hub
• UNFCCC – Document 4046
• UNFCCC Decision CP/27 Sharm El Sheikh Implementation Plan 
• UNFCCC Decision CMA 4 Sharm El Sheikh Plan 

Kevin Conrad is the executive director and Federica Bietta is the managing director of the non-profit Coalition for Rainforest Nations (CfRN), of which over 50 countries are members. Both are also co-founders. 

Any opinions published in this commentary reflect the views of the author(s) and not of Carbon Pulse.