An in-depth study of the main methodologies used by REDD+ forest conservation projects has exposed a series of shortcomings that allow project owners to stretch reality and create a vast quantity of carbon credits for projects that have questionable climate impacts.

In a briefing paper titled ‘Error Log: Exposing the methodological failures of REDD+ forestry projects’, environmental watchdog Carbon Market Watch (CMW) released the findings of new research from UC Berkeley Carbon Trading Project on 15 September 2023. The study focuses on five key factors influencing carbon credit quality: baselines, leakage, carbon accounting, permanence and safeguards. 

For each of these elements, the results show that the methodologies systematically fail to guarantee environmental integrity and that their excessive degree of flexibility enables gaming by project owners. CMW has sent a formal complaint to Verra, the world’s leading standard body which is currently reviewing its REDD+ framework, highlighting some of the projects that, in stretching reality, have been permitted to issue junk carbon credits.

Lost in the forest

“We welcome Verra’s willingness to engage with our research and hope that it will take on board our findings and implement all of our recommendations. The research shows that the current rules governing REDD+ projects seriously lack credibility and cannot be trusted to generate high quality carbon credits. Businesses are offsetting their emissions on the cheap by buying low-quality carbon credits connected to forest protection projects in the Global South,” explained Inigo Wyburd, policy expert on global carbon markets at Carbon Market Watch. 

“When only one in every 13 carbon credits represents a real emissions reduction, their action is lost in the forest.”

This huge discrepancy is caused in part by the large flexibility that methodologies allow. Project owners not only can choose which methodology to use, but also the parameters within those methodologies. For example, UC Berkeley’s research has shown that methodologies used to estimate the baseline level of forest protection projects, i.e. the level of deforestation that is expected to occur in the absence of a conservation project, can lead to results that vary by more than 1400% between the highest and lowest baseline estimates. Such a margin gives huge potential for project owners to exploit flexibility and game the system.

“We need to protect the world’s forests and that requires finance. However, REDD+ carbon credits used as an offsetting tool are fundamentally inadequate,” continued Inigo Wyburd. “There is huge inconsistency in setting carbon credit prices. The market creates a race to the bottom by incentivising low prices and low integrity, and when used as offsets they don’t come close to covering the climate impact of a company’s emissions.”

The science

Renowned authority in the efficacy of carbon offsetting programmes Barbara Haya led the research at the Berkeley Carbon Trading Project. 

“We found significant over-crediting from all of the factors we reviewed, the core causes of which are a combination of incentives and uncertainty. Everyone involved in the voluntary carbon market, from the buyers and sellers of credits, to the registries who write the rules and the auditors who enforce them, all benefit from more credits,” Haya said. “Large uncertainty in climate benefit calculations creates many opportunities for market participants to choose assumptions that inflate credits issued. Drawing on all evidence, we conclude that REDD+ is ill-suited for carbon offsetting.”

Moreover, attempting to offset carbon emitted from stable fossil pools that are millions of years old by investing in the protection of natural sinks is to move it to a more volatile storage setting. It is unrealistic to claim that CO2 storage in a natural carbon sink can compensate for the emissions attributed to the combustion of fossil fuels, as this would require carbon storage over several centuries, to millennia, which unstable forests cannot guarantee due to high reversal risk.

Furthermore, the research raises concerns about insufficient safeguards that project developers can easily bypass to the detriment of local and indigenous communities, and the environment.

Axing offsets

The message from CMW’s policy lead on global carbon markets Gilles Dufrasne is loud and clear. “It is evident from the research that creative accounting and profiteering are endemic to the current REDD+ projects and enabled by methodologies that are not fit for purpose,” he declared. “Biodiversity, the climate and indigenous people or local communities are losing out on what should have been a system to drive meaningful financial flows to the forest conservation projects that so desperately need it.”

“Offsetting should be axed. It cannot work in its current form, and carbon markets must evolve into something different. The focus should be on getting money to the right place, rather than getting as many credits as possible,” he concluded.