Why Verra Supports REDD

Certifying REDD activities is not easy, in part because one has to quantify the risk of forest loss that would occur without the carbon project (i.e., the baseline). In other words, this requires counterfactual analysis, which is a fancy term for looking at a situation and asking what would happen if things were different. This approach isn’t unique to REDD and is a cornerstone of the impact analyses that government agencies, academics and others around the world use to determine what works, what doesn’t, and how to allocate resources. Counterfactual analysis is, by its nature, impossible to confirm with 100 percent certainty, but is critical if we are to channel more resources to protecting forests as a critical means of fighting climate change.

Awarding carbon credits to REDD projects requires extreme diligence, and we take that challenge seriously. For example, we ensure wide consultation on the most up-to-date science and best practices, as well as a thorough understanding of the available tools to measure forest loss and gain. This has been Verra’s guiding approach since we embarked on this journey, and continues to this day.

Unfortunately, in the last week The Guardian and Die Zeit, working in tandem with the privately-funded “investigative non-profit” SourceMaterial, published sensationalist articles using outlandish claims about the value of the REDD credits we have issued based on simplistic extrapolations of research that uses old, outlier statistical models. These are academically interesting exercises, but they would never pass muster as bona fide carbon crediting methodologies.

The approach underpinning these studies is problematic on several fronts. For one, the studies apply an overly simplistic tool to create their own counterfactuals, essentially ignoring the unique circumstances affecting each one of the projects – and which are critical to understanding the various drivers of deforestation and how they vary across landscapes. Another major limitation is that the data sets used are not appropriate for the task at hand. The studies rely on Global Forest Watch (GFW) data, which is a fantastic tool to identify the occurrence of deforestation across the world and identify hotspots, but has multiple limitations that have been recognized by GFW itself and others. For this reason, several studies have concluded and explicitly stated that this data should not be used off-the-shelf to estimate deforestation or for REDD purposes, although they may be used if suitable adjustments are made first. We are preparing our own analysis of the studies and will post that shortly.

Not all scientists agree, of course, but we do strongly believe that one-sided reporting, with an exclusive focus on a few cherry-picked studies, does not do justice to the realities on the ground and the wide range of opinions on this topic – including those of scientists who recognize that these projects are collectively protecting forests under threat and therefore keeping massive amounts of carbon emissions out of the atmosphere. Experts from many other organizations, including Everland and Sylvera have also chimed in to point out inadequacies in the scientific research supposedly supporting the journalist’s claims.

Verra pioneered the crediting of REDD projects, but we didn’t develop our program alone. We built it by relying on decades of research and experimentation by hundreds of scientists, economists, policy makers, and conservationists, and then convening multiple rounds of focused review and public consultation to develop program requirements and accounting methodologies for calculating the emissions that were avoided or reduced by keeping forests standing. We are very proud of that work and stand behind the emission reductions that have been achieved to date – each and every one of them followed the best-available science of the day and met the requirements we set out.

At the same time, we recognize that science advances, practices improve, and systems change, which is why all of our program requirements and methodologies are periodically reviewed to ensure they remain valid in the face of change. It’s also why we require all projects using older versions of the standard and methodologies to transition to the new and updated requirements. This mandatory aspect of our program requirements is essential as it embeds the underlying concept of continuous improvement.

While we have continuously updated our program requirements (e.g., we are currently on version 4.4 of the VCS Standard), we began the effort to update our REDD+ methodologies several years ago. We are in the final stages of that work, and there are four major components to it.

1. Shorter baseline periods. As part of an update to the VCS Standard last year, we shortened the time frame for when baselines need to be recalibrated, from 10 to six years so that, in the case of REDD, estimates of future deforestation are more closely linked to the more recent past. While initially the science indicated that a 10-year period provided sufficient data for estimating deforestation, recent evidence indicates that 10 years is too long. All projects must now meet this new requirement.
2. Allocating robust jurisdictional baselines. We are transitioning from a system of baselines proposed by the project proponents and vetted by third-party auditors and Verra, to a centralized system of robust jurisdictional baselines and allocating these to individual projects based on their local risk profiles. This will ensure that all the emission reductions achieved by projects “add up” properly to the jurisdictional whole. It will also enable REDD projects to contribute to jurisdictional REDD programs led by governments. While a system based on jurisdictional baselines has always been the long-term goal, until recently data gaps and methodological challenges prevented such an approach from being widely adopted. Fortunately, in many regions suitable data now exists, which combined with new methodologies (often relying on artificial intelligence and large-scale computing power) is enabling Verra to switch to this new approach.
3. Consolidating methodologies. In the early days of REDD, we made a strategic decision to enable a lot of pioneering work on methodologies, as REDD had never been used before to issue carbon credits. That approach resulted in various methodologies that sometimes used different accounting methods, which were appropriate at the time. Now that the space has matured, we are confident we can apply the learnings from these various experiences and create a unified best-practice methodology that enhances consistency. That methodology has already undergone a public consultation (5 October – 6 November 2022), and we are now working to finalize and release it for use in the second quarter of this year.
4. Digitalilizing Monitoring Reporting and Verification (DMRV). We are undertaking a major commitment to deploying the latest technology to support monitoring and verification across all VCS projects, including REDD projects. This will automate and standardize how data is collected, analyzed, and validated, enhancing both transparency and integrity. Last October we announced the creation of a Digitalizing Monitoring, Reporting, and Verification (DMRV) Working Group to inform how we can best incorporate new technologies, and in November we announced a pilot effort that will harness remote-sensing data to measure forest carbon.

REDD projects are not some abstract concept on a piece of paper; they represent real projects on the ground that deliver life-affirming benefits to communities and individuals in the form of agricultural training, education, and health care – while at the same time protecting forest carbon stocks and preserving critical biodiversity and water resources, to name a few additional benefits. In addition, REDD projects are, for the most part, located in the global south, which means that these benefits accrue to communities who tend to have few real development options. For them, REDD is a lifeline.

The stark reality is that huge swaths of the world’s forests are at risk, primarily because there are no real ways of assigning an economic value to them. If we are going to protect the world’s forests, we need an alternative to “business as usual”, where they get chopped down or burned for short-term economic gain. An effective and appropriately funded REDD+ mechanism means that day-to-day decisions about forests have another dimension to them – and it means they stand a far better chance of being conserved.

Furthermore, let’s not forget about the positive leakage that most REDD projects generate. For example, many projects work with governments to reduce illegal logging and mining across the landscape, secure land tenure for local communities to foster sustainable land use, introduce new agricultural production practices that reduce the need for slash-and-burn farming, and/or develop new markets for non-timber forest products. All these activities and many others result in positive spillover effects beyond the project boundary and generate meaningful, often very significant, additional carbon benefits, none of which is ever credited.

The voluntary carbon market is at an inflection point, and it can be a crucial element in the fight against climate change provided it can help companies meet aggressive Net Zero targets while also enabling investment in both emission reduction and removal projects. Specifically, it needs to make sure companies follow the mitigation hierarchy on their way to Net Zero, and that claims around the use of carbon credits are accurate (e.g., Voluntary Carbon Market Integrity Initiative, VCMI). In addition, it needs to make sure that the carbon credits sold in the market are achieving real emission reductions (or removals), which represents the important work of the Integrity Council for Voluntary Carbon Markets (ICVCM).

Today, we at Verra have issued over one billion carbon credits, which have channeled billions of dollars into climate action and helped forest communities thrive. For some, awarding credits based on a counterfactual scenario is too imprecise. However, there is simply no other approach if we are going to channel much-needed finance to protect forests under threat. Instead of waiting for imagined states of perfection, we have chosen to move forward with supporting forest protection projects around the world using these methods, which are constantly under review and continuous improvement. The urgency of the climate and biodiversity crises is too great to ignore this vital tool.