REDD+ Carbon Credits: Controversy and Verra's Role in Global Climate Action"

Recently The Guardian published an investigative journalism piece, voicing hefty criticism that ~90% of rainforest carbon credits called “REDD+”, certified by “ Verra Standard” called VCS, do not represent real emission reductions.

The Guardian article: https://lnkd.in/ewSKKkeY

Verra, the world's leading carbon standard for the voluntary offsets market, contested and strongly disputed the findings of studies on its rainforest projects and said the methods used by scientists cannot measure the true impact on the ground.

Read Verra's response here: https://lnkd.in/ex4ANp3d

Also Everland’s response here: https://everland.earth/news/the-science-behind-the-the-guardian-piece-is-fatally-flawed/

Who is Everland? Everland markets and sells Verified Emissions Reductions from the world's most impactful REDD+ projects, generating critical resources to support the communities who undertake them.

It has become the topic of conversations in environmental markets and some activists went further and expressed the system as useless and concluded that companies would pollute more than what actually avoided. This was a reason to explain the issue further and hear both sides:

Verra Standards is the biggest verifier in the Voluntary Carbon Market (VCM), with ~70% market share. Since 2002, they’ve issued 460M carbon credits from Nature Based Solutions (NBS), ~30% of all issued credits. If these forest credits are worthless, it is a big deal.

First: What is a carbon offset?

A carbon offset is a reduction in emissions of carbon dioxide ( by default 1 ton) or other greenhouse gases made in order to compensate for emissions made elsewhere. Carbon offsets are typically used by companies and individuals to offset their own emissions, such as from air travel or energy use, by investing in projects that reduce emissions elsewhere, such as renewable energy or reforestation projects. Offsets are meant to balance out emissions so that total emissions remain constant. There are more than 170 carbon credits. Carbon offsets are a way for people and businesses to take action on climate change by reducing their own carbon footprint (*GHG Scope 1, 2,and 3), even if they cannot reduce their emissions to zero.

You can read further here:

The carbon offset process involves several steps:

1. Project developers initiate a climate mitigation project, including design, land permitting, and socialization.
2. The developers measure and report emissions and calculate the amount of carbon avoided or captured, issuing carbon credits.
3. Companies assess their own emissions, set net-zero targets, and buy carbon offsets while working on reducing emissions.
4. Companies purchase carbon credits either directly from new projects or from mature projects approved by Verra and Gold Standard through credit marketplaces.
5. With the purchased carbon credits, companies can make climate claims such as carbon neutrality for their products or operations.

What is REDD+?

REDD+ stands for Reducing Emissions from Deforestation and Forest Degradation. It is a global initiative aimed at mitigating climate change by reducing the release of greenhouse gases from deforestation and forest degradation. REDD+ also seeks to enhance carbon stocks in forests and promote sustainable forest management. The initiative provides financial incentives for countries and communities to conserve and sustainably manage their forests and is a key component of international efforts to address climate change.

It all started here: After 9 months of investigative journalism, the Guardian published their article. In contribution to German weekly Die Zeit, and non-profit investigative journalism organization SourceMaterial, used satellite imagery to double-check REDD+ forest conservation projects verified by Verra.

The stats: only 6-30% of REDD+ credits are valid. Scientific sources in the guardian article claim that 6% of Verra’s REDD+ credits are high-quality. The VCM market report from Sylvera Carbon (Nov. 2022), claims 30% is high-quality credit (143M credits).

Finding that the $2bn voluntary offsets market, Verra, has largely worthless forest carbon offsets. The analysis, based on scientific studies of Verra's rainforest schemes, has shown that more than 90% of the rainforest offset credits are likely to be “ghost credits" and do not represent genuine carbon reductions. The findings could raise serious questions for companies relying on offsets as part of their net zero strategies, as companies like Disney, Gucci, Shell, and others have labeled their products "carbon neutral." Verra, which is based in Washington DC, operates a number of leading environmental standards for climate action and sustainable development and approved 75% of all voluntary offsets. Verra disputes the findings and argues that their work has allowed billions of dollars to be channeled toward preserving forests.

The voluntary carbon market, which includes the REDD+ mechanism, is a crucial part of the fight against deforestation and climate change. However, the market is still in its infancy and experiencing growing pains. Verra uses the best-available science and technology, consulting with academics and experts, to develop methodologies that ensure project baselines and carbon credits calculations are robust and credible.

If only 6-30% of the issued REDD+ credits are high quality and 25-90% are junk, the entire VCM is questionable. Verifiability/quality control of credits is important, otherwise, this market just enables greenwashing. Human verification is part of the problem.

The analysis by the journalists found that Verra’s claims about the impact of the projects appeared to be overstated by about 400%. Verra has disputed the studies’ conclusions and said the methods used by the scientists cannot capture the true impact of the projects on the ground. Verra said its projects face unique local threats and it is working with leading experts to update its methodologies.

Robin Rix, Chief Legal, Policy, and Markets Officer at Verra, said it was “absolutely incorrect” to say that 90% of Verra-certified credits are worthless.

“a big gap between the amount of deforestation his team estimated the projects were avoiding and what the carbon standard was approving.”

Verra argues that the studies used in the investigation fail to account for project-specific factors causing deforestation, leading to miscalculation of REDD project impacts. The studies rely on "synthetic controls" that do not accurately represent the pre-project conditions and do not consider site-specific drivers of deforestation. Verra welcomes scrutiny and contributions from experts and encourages expert review and public consultations. The organization supports global climate action by certifying projects that avoid, reduce, or remove emissions and issuing carbon credits. Verra is working to transition all REDD projects to a single methodology that uses jurisdiction-allocated data to ensure consistency in emission reductions within a region.

?Remote + digital verification of forest conservation efforts are better, and VerraStandards is testing this.

In summary: Despite these criticisms, the carbon credit market is still seen as a way to fund the conservation of natural carbon sinks and other climate solutions. Most corporations using carbon credits are also actively decarbonizing their own value chains and using credits to make a difference in the short term. Carbon credits are part of a wider climate strategy, but also act as an additional incentive for companies to reduce their emissions. The challenge with carbon credits is ensuring their quality and credibility, and this is where the role of carbon credit rating providers and other third-party measurement and tracking organizations becomes important. Technological advances have made it possible to assess credit quality accurately, and the market is recognizing this, leading to a demand for high-quality credits. The benefits of carbon credits cannot be ignored as they provide funding for nature-based solutions and help to prevent the eradication of carbon-sequestering ecosystems.

Efforts to improve the integrity, transparency, and accountability of carbon credits are ongoing.