By Mark Moroge and Frances Seymour
Large expanses of forests experiencing very little deforestation, known as High Forest Low Deforestation (HFLD) regions, are key to stabilising the Earth’s climate. Such forests, especially high integrity tropical forests, store vast quantities of carbon and provide a host of other non-carbon climate services.
Despite international efforts to curb deforestation, the recent Forest Declaration Assessment shows that in 2024, global deforestation totalled 8.1 million hectares, leaving the world 63% off track from the world leaders’ pledge to halt forest loss by 2030. The assessment shows that the loss of humid tropical primary forests resulted in the loss of 6.7 million hectares and the release of 3.1 billion tonnes of greenhouse gases – an amount nearly 1.5 times greater than the annual emissions from the US energy sector.
Continuing high rates of global forest loss threaten HFLD regions as deforestation frontiers continue to expand. Access to carbon market finance could help countries and subnational jurisdictions protect remaining HFLD areas and reduce forest-based emissions. However, using methods for establishing crediting baselines tied to historical averages of forest loss, which are used for non-HFLD areas, do not work for HFLDs. From 2002 to 2020, HFLDs experienced 44% higher deforestation rates than their historical average, and five tropical countries lost their HFLD status between 2010 and 2019.[1]
Recognising this problem, a leading forest carbon standard-setting body, the Architecture for REDD+ Transactions (ART), has incorporated a specific approach to establishing baselines for HFLD crediting in its standard, known as “The REDD+ Environmental Excellence Standard” (TREES). ART’s TREES credits (including those using the specific approach to HFLD baselines) are eligible for Phases 1 and 2 of the International Civil Aviation Organization’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). CORSIA is a programme adopted by ICAO to support its goal of achieving carbon-neutral growth from 2020 onward by offsetting aviation emissions that cannot be reduced through technology or operations by using eligible carbon market units and sustainable fuels.
The Integrity Council for the Voluntary Carbon Market (ICVCM), an independent non-profit governance body working to establish and maintain worldwide standards for integrity in the voluntary carbon market (VCM), in November 2024 awarded the ART’s TREES Crediting Level Approach a Core Carbon Principle (CCP) label in its initial approval of forest carbon crediting methodologies. However, the ICVCM postponed a decision on the TREES crediting approach for HFLD credits, presumably to allow time for considering additional information and further deliberation. A year has now passed. During that year, new peer-reviewed literature has been published highlighting the conservativeness of ART’s and other HFLD crediting methods.
The ICVCM’s delay in decision-making has created uncertainty among current and prospective suppliers of ART’s TREES HFLD credits, including sovereigns that are interested in using such credits in the context of the Paris Agreement’s Article 6.2 Internationally Transferred Mitigation Outcomes. The ICVCM’s stated objectives are to achieve scale, integrity, and a just transition through the VCM. With the tropical forest-oriented United Nations Framework Convention on Climate Change (UNFCCC) COP30 in Brazil underway, the expeditious approval of ART’s TREES HFLD crediting approach is more timely than ever.
HFLD crediting baselines are conservative
The debate about methodologies for crediting emissions reductions from HFLD areas is largely focused on the issue of additionality. Some participants in the debate believe that because HFLD areas have not yet experienced high rates of deforestation, they are not under threat. The debate should be informed by peer-reviewed and recently published science, which suggests that baselines tied to historical averages are inappropriate for HFLDs in general, because they underestimate pressures that are increasing over time, and are particularly inadequate for a subset of countries facing greater risks of high deforestation. According to these analyses, HFLDs globally are expected to undergo higher rates of deforestation from 2020 to 2038 than their historical averages, with 72 HFLDs likely (>66% probability) to undergo high rates of deforestation. The warning given to investors in the stock market applies to HFLDs: past performance is not indicative of future results.
Risk of continued delay
Further delay in ICVCM decision-making risks paralysing a part of the carbon market that is currently working. Over 40 million tCO2e of ART’s TREES HFLD credits issued by Guyana with vintages from 2016-2022 have attracted interest in both voluntary and compliance markets. Of those, 15.8 million have been made available for CORSIA with approximately 1 million credits sold at an average price of US$22.25 per tCO2. Guyana has also transacted over 20 million credits through the VCM, with sales to both the Hess Corporation and Apple. The ICVCM’s approval of the CCP label for ART’s TREES HFLD credits would likely strengthen market demand.
Such strengthened demand is needed to incentivise and meet prospective supply. Several more government suppliers of ART’s TREES HFLD credits are in the crediting pipeline, as is an Indigenous Peoples’-led initiative from Peru. According to the President of ANECAP and Coordinator of the Peru Group of Indigenous Peoples, Fermin Chimatani, “Indigenous Peoples’ organisations in the Peruvian Amazon see the HFLD approach as a recognition that our forests are threatened and that Indigenous Peoples are on the front line to their defense, risking our lives to protect them. Carbon market financing can be a crucial support for us to defend these forests and curb deforestation, and for this reason, we urge the ICVCM to recognise the high integrity of TREES HFLD credits.”
Further delaying a decision on the ICVCM CCP label for ART’s TREES HFLD credits risks leaving prospective government and Indigenous Peoples and local community suppliers in the lurch after they have invested in meeting high standards for environmental and social integrity and are counting on carbon finance. Without the prospect of such finance, alternative, less climate-friendly approaches to generating revenue from forests would become more attractive.
The debate on whether and how to credit emissions reductions from HFLD jurisdictions is legitimate and healthy, but it needs to come to at least a temporary conclusion. Science tells us that the ART’s TREES HFLD crediting baseline is a conservative one, and that the forests in HFLD jurisdictions – among the most carbon dense and biologically diverse ecosystems on Earth – are at risk now.
The scientific understanding of HFLD crediting baselines provided by peer-reviewed, published analyses will improve over time and should continue to inform the debate and development of improved crediting methodologies. Such analysis can feed into public consultation processes as standards are periodically updated. Such consultations have recently been conducted to inform decisions on ART-TREES 3.0.
Strengthening market confidence in the integrity of HFLD credits would be good for the climate, help to protect some of the world’s last remaining intact forests, and support Indigenous Peoples, who are the world’s best forest stewards.
Further delay in decision-making serves none of those objectives.
[1] Source: Teo et al. 2024: https://www.pnas.org/doi/10.1073/pnas.2306496121 + additional analysis by EDF
Mark Moroge is Vice President Forests at the Environmental Defense Fund (EDF). Frances Seymour is Senior Policy Advisor at the Woodwell Climate Research Center and former Chair of the ART Advisory Board.
Any opinions expressed in this commentary reflect the views of the authors and not of Carbon Pulse.