Indigenous, conservation groups pen guide on tropical forest carbon credits

An updated guide written by eight conservation and Indigenous organisations offers a detailed path forward for companies that want to compensate for their carbon emissions in addition to decarbonising their supply chains.

The updated Tropical Forest Credit Integrity guide calls for due diligence on the part of companies to ensure the credits they purchase will result in climate gains. Image: Dennis Jarvis, CC BY-SA 3.0, via Flickr.

Eight conservation and Indigenous organisations have released a detailed guide for companies looking to invest in tropical forest carbon credits.

The groups first published the Tropical Forest Credit Integrity (TCFI) Guide in May 2022. After months of consultation, an update lays out step-by-step guidance that they say provides companies with a tool to offset their carbon emissions in conjunction with the “decarbonisation” of their operations.

It was made public at a Feb. 9 meeting in Mexico of the Governors’ Climate and Forests Task Force, an international group of leaders formed in response to deforestation, climate change and other environmental issues.

“For years, companies have been raising their ambitions for a net zero, nature-positive future, but now is the time to turn those commitments into action. This updated TFCI Guide provides the direction companies need to do just that,” Emily Nyrop, vice president for climate change at Conservation International, said in a statement. “It points companies toward high-integrity carbon credits and helps ensure that corporate use of those carbon credits aligns with real, measurable progress and impact for both the climate and communities.”

Indigenous Organisations of the Amazon River Basin (COICA), the Environmental Defense Fund, the Amazon Environmental Research Institute (IPAM), the Nature Conservancy, the Wildlife Conservation Society, the World Resources Institute and WWF.

Interest in the voluntary carbon credit market, which, in principle, provides individuals and companies with the opportunity to offset their emissions by investing in climate change mitigation projects, has surged in recent years, driving the value to more than US$2 billion in 2021. Scientists and conservationists often consider credits aimed at halting tropical deforestation among the most valuable.

That’s due not only to the enormous amount of climate-warming carbon that avoiding deforestation can lock away and out of the atmosphere, but also to the wildlife habitat, community livelihoods and ecosystem services such as water regulation that tropical forests provide.

But critics contend that allowing companies to buy credits — instead of forcing them immediately to reduce the amount of carbon they emit — will not help address climate change. Still other criticism centers on a practice that appears to be outsourcing climate change mitigation, mostly from industrialised countries that pollute the most, to less-industrialised nations that bear less responsibility for the current climate situation.

Leadership starts at home, focusing first on a company’s footprint and deep decarbonisation in line with a science-based target, augmented by high-integrity, high-impact investments in nature-based solutions.

Fran Raymond Price, lead for global forest practice, World Wide Fund

What’s more, questions have arisen about how effectively credits are at actually preventing trees from being cut down, keeping carbon out of the atmosphere, and maintaining a viable path to capping global temperatures at below 1.5° Celsius (2.7° Fahrenheit) over the pre-industrial average, a principle many countries agreed to in the 2015 Paris climate accordsA recent investigation by The Guardian newspaper in the UK and Die Zeit in Germany concluded that more than 90 per cent of the carbon credits they examined were essentially “worthless” when it came to their impact on the climate.

Indeed, such concerns may discourage a fuller corporate embrace of carbon markets. In a 2022 survey conducted by Conservation International and a partnership of climate-focused NGOs called the We Mean Business Coalition, sustainability managers at many companies with a strong interest in voluntary carbon markets said they were hesitant to engage in these markets. They cited concerns about the quality of credits available. And some said they worried that purchasing credits might open their companies up to the criticism that they were trying to “greenwash” their image.

The authors say this updated TFCI guide helps corporations surmount those hurdles.

“Our new roadmap now provides detailed, practical guidance for companies to implement these principles, so buyers know their purchases are sound,” Mark Moroge, vice president of natural climate solutions at Environmental Defense Fund, said in the statement. “With our guidance, companies can have high confidence that their financing contributions will help mitigate climate change by halting tropical deforestation.”

The TCFI guide advocates a process for companies’ carbon credit purchases that begins with a plan for a portfolio including “high-quality” credits that go beyond individual projects and reflect a “jurisdiction-scale” strategy, which experts say is vital to meaningfully tackling rising temperatures. That means seeking out credits sold at state, provincial or federal levels.

The guide also says that companies must carry out further due diligence on credits to be purchased as an additional verification for quality.

Still, proponents of the carbon credit market as a means to address climate change say it is only “a tool” that must be wielded correctly to make a difference.

“No particular policy instrument stands out as a ‘silver bullet,’ but improving the coherence and complementarity of the policy mix across government levels can enhance the effectiveness of policies — both individually and in combination,” wrote researchers Robert Nasi and Pham Thu Thuy of the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF) in a Feb. 7 commentary for Mongabay.

Nasi is CIFOR-ICRAF’s CEO, and Pham Thu Thuy is a senior scientist with the Indonesia- and Kenya-based research organisation.

They note that effective carbon offset projects must accurately account for the emissions reductions it claims and that those reductions offer some improvement over what would have happened had the project’s work not taken place — what scientists call “additionality.”

The TCFI guide also stresses that such projects must be carried out in consultation with Indigenous peoples and local communities.

“The full and effective participation and the recognition of rights of Indigenous Peoples and Local Communities (IPLCs) during all processes is vital for the conservation of forests and the mitigation of climate change,” Harol Rincón Ipuchima, COICA’s coordinator of climate change and biodiversity, said in the statement. “The TFCI Guide recognises IPLCs as partners and rightsholders, not only beneficiaries throughout the process mainly seeking a fair and equitable distribution of benefits.”

Companies that invest in carbon credits must also work in tandem to reduce their emissions, the guide’s authors say.

“Leadership starts at home, focusing first on a company’s footprint and deep decarbonisation in line with a science-based target, augmented by high-integrity, high-impact investments in nature-based solutions,” Fran Raymond Price, lead for global forest practice with WWF, said in the statement.

“The carbon market must continue to improve and develop. And although it is not a stand-alone solution, if used appropriately, the market can increase support for transformative interventions at scale — as the TFCI Guide suggests — to deliver tangible benefits for people, nature and climate.”

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