Climate Talks > COMMENT: Paris Agreement forest carbon transactions should follow tropical forest credit integrity guidance

COMMENT: Paris Agreement forest carbon transactions should follow tropical forest credit integrity guidance

Published 20:16 on December 8, 2023  /  Last updated at 10:49 on December 19, 2023  /  Climate Talks, Contributed Content, International, Nature-based, Other Content, Paris Article 6, Voluntary

In the context of increasing reports of forest carbon-related cooperative approaches under Article 6 of the Paris Agreement, Parties should apply strive to ensure that all credits transacted are of the highest quality by applying guidance developed by leading environmental and Indigenous organisations, writes the Wildlife Conservation Society and other groups.

By the Amazon Environmental Research Institute (IPAM), Conservation International, Environmental Defense Fund, Fauna & Flora, National Wildlife Federation, Nature4Climate, We Mean Business Coalition, Wildlife Conservation Society.

In the context of increasing reports of forest carbon-related cooperative approaches under Article 6 of the Paris Agreement, we encourage Parties to apply the Tropical Forest Credit Integrity Guide (TFCI) to strive to ensure that all credits transacted are of the highest quality. The TFCI Guide was developed by eight leading environmental and Indigenous organizations, to help companies engaging in the voluntary carbon market to identify and source tropical forest carbon credits that meet recommended criteria for environmental and social integrity.

The principles of the guidance are equally applicable to forest carbon transactions within the UNFCCC. We acknowledge that meeting high quality thresholds such as those specified in the TFCI can increase costs for tropical forest countries. However, high quality thresholds also underpin the resilience of these transactions and maximise the environmental and social benefits they can create for host countries. As part of the shared responsibility and commitments of all countries to halt climate change, we encourage funding countries to increase their climate finance contributions to tropical forest countries to accelerate their path to meeting the high quality thresholds set out in the TFCI guide.

Article 6 of the Paris Agreement endorses the use of voluntary “cooperative approaches” between Parties in implementing their Nationally Determined Contributions (or NDCs) “to allow for higher ambition in their mitigation and adaptation actions, and to promote sustainable development and environmental integrity.[1]” Article 6.2 provides an accounting framework and a foundational “rulebook” for the transfer of mitigation outcomes to “count” toward the NDC of the country receiving the “internationally transferred mitigation outcome” or ITMO. The Glasgow Conference of the Parties clarified that such ITMOs would be denominated in units of metric tonnes of carbon dioxide equivalent (tCO2e) or from the application of methods for converting the non-greenhouse gas metric into tonnes of carbon dioxide equivalent in accordance with decision 2/CMA.3.

ITMOs under Article 6.2 can comprise any number of mitigation approaches and do not require approval by any body of the Paris Agreement. However, despite their intentionally decentralised design, ITMOs are nevertheless subject to important guardrails: Parties implementing cooperative approaches must “promote sustainable development and ensure environmental integrity and transparency, including in governance;” ensure that robust accounting is in place so that no double counting occurs and that there is consistency with the guidance on Article 6.2 adopted by the Parties. Furthermore, a “corresponding adjustment” must be made by the transferring Party that authorises each ITMO transfer; Parties must track and record ITMOs in registries; and ITMOs must be “real, verified and additional[2].” Despite these high-level criteria, it is essentially the responsibility of the Parties involved in cooperative agreements to assess the quality of these transferred units in order to fulfil their Article 6.2 responsibilities.

The TFCI guidance, which spells out threshold criteria that tropical forest carbon credits should meet in order to be considered high quality, can serve as a helpful resource for Parties to comply with their responsibilities under Article 6.2. For example, according to the TFCI Guide, independent third-party verification and validation— a requirement of internationally recognised global carbon standards for carbon credits across all sectors— is required to ensure that mitigation outcomes are generated from programmes that:

  • (a) are in compliance with applicable laws and regulations as well as safeguards requirements;
  • (b) have established carbon rights and implemented Free Prior and Informed Consent (FPIC);
  • (c) have accounted for uncertainties; and
  • (d) are monitored against a credible baseline.

Environmental integrity is essential for market-based approaches to mitigate global emissions[3] under Article 6.2, and participating Parties of a transaction have a responsibility to ensure mitigation results comply with applicable legal, regulatory and safeguard requirements, including FPIC. By applying the principles provided in the TFCI Guide, Parties will be following best practice for high environmental and social integrity is achieved, enabling ITMOs to contribute to countries’ ability to meet their climate commitments, alongside generating important benefits for people and nature.

  • [1] Article 6.1, Paris Agreement, Decision 1/CP.21, FCCC/CP/2015/10/Add.1 https://unfccc.int/sites/default/files/english_paris_agreement.pdf
  • [2] Article 6.2, Paris Agreement, Decision 1/CP.21, FCCC/CP/2015/10/Add.1 https://unfccc.int/sites/default/files/english_paris_agreement.pdf.  FCCC/PA/CMA/2021/10/Add.1
  • [3] See San Jose Principles, https://cambioclimatico.go.cr/sanjoseprinciples/about-the-san-jose-principles/

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