However You Look at It, Our Future is Forests

• Tropical forests are a key tool for near-term emissions reductions as part of a larger strategy to meet Paris climate targets.
• A portfolio of market-based mechanisms including REDD+ and carbon markets can channel finance to cost-effective emissions reductions right away, and help ensure companies follow through on their long-term net-zero commitments.  
• These mechanisms have matured over the past two decades – now it is time to scale them quickly, while maintaining the highest level of environmental and social integrity.  
• REDD+ can’t work in the absence of inclusive and just partnerships with indigenous peoples and local communities, the planet’s best guardians of forests. 

The world is not on track to meet the Paris target of stabilizing warming in the 21st century at 1.5°C or lower, and there is very little time to change our trajectory. The IPCC estimates that global CO2 emissions in 2030 must be 40-50% lower than they were in 2010 in order to avoid the worst effects of climate change. This is still possible. 

Carbon markets allow us to lower the cost of cutting greenhouse gas emissions. When buyers can use markets to seek out the most cost-effective offsets, their savings can – and should – be used to “buy” even greater emissions cuts. This mechanism enables countries and companies to increase ambition, moving the world as close as possible to the 1.5°C target. 

Carbon markets also allow hard-to-abate sectors to play their part in achieving net zero emissions quickly. Where emissions are directly controlled by the emitter (“Scope 1” emissions) or can be cut by sourcing electrical generation, heating, or steam (“Scope 2”), this should be done. But where emissions come from elsewhere in the value chain (“Scope 3,” including for example: upstream or downstream transportation, agricultural supply chains, waste disposal), offsets may be the best option for quick action. In some cases, cutting emissions requires substantial operational, technological, and/or financial transitions that will take many years. Offsetting projects often provide immediate or short-term carbon storage. Carbon markets therefore offer companies an opportunity to immediately become carbon neutral while also pursuing a longer-term net-zero goal.  

When it comes to nature-based solutions, avoided deforestation needs to be the priority.  

REDD+ credits, generated through efforts to reduce emissions from deforestation and forest degradation, allow us to drive finance to tropical forests and their stewards. Preventing tropical forest loss is critical not only for climate stability but also for maintaining global biodiversity values, sustainable development goals, and indigenous and traditional cultures. 

Protecting existing carbon sinks from damage or conversion delivers twice as much greenhouse gas mitigation as any other nature-based strategy, including reforestation. New research also indicates that there is an asymmetry in changes to atmospheric CO2 concentrations between emissions and removals. In other words, compensating for an emission requires a greater amount of CO2 removal than avoiding that emission in the first place.  

It is especially hard to imagine how companies in hard-to-abate sectors can meet their net-zero commitments without REDD+. Tropical forests remain one of the largest – and still mostly untapped – potential sources of offset supply, and probably the only one that could be ramped up quickly enough to meet offset demand in the next decade without driving a major spike in the price of carbon. Avoided tropical forest conversion holds the potential to provide at least three gigatons per year of cost-effective emission reductions – which would cover one-fifth of the gap we need to close by 2030 to keep warming under 2°C. 

The decline of tropical forests, our planet’s great carbon sinks, thus represents an enormous stumbling block to delivering on the Paris Agreement. The longer tropical deforestation goes on, the worse the problem gets. In Amazonia, for example, mature forests more than mitigated the fossil fuel emissions of every single national economy in the region, with the exception of Venezuela, between 1980 and 2010. For most nations (Bolivia, Colombia, Ecuador, French Guiana, Guyana, Peru, Suriname) the sink probably additionally mitigated all anthropogenic carbon emissions from Amazon deforestation and other land-use change. But today that sink is in decline. Deforestation pressures from forces including land grabbing, logging, cattle ranching, agribusiness, and fires are being aggravated by climate change. This combination of forces is flipping the Amazon to a net carbon source instead of a sink, although scientists say recovery is still possible. 

There is also a moral argument for focusing climate finance on REDD+. Tropical forests cover 10% of the earth’s land area, but hold two-thirds of global biodiversity, much of which western science has yet to measure or understand. These forests are the source of livelihoods for millions of people. Many of who – particularly indigenous peoples – have always defended forests, and thereby the world’s climate future, with no recognition and in the face of violence and extreme pressure. Climate justice demands that we acknowledge the debt we owe these communities, and recognize all the values of living forests, not only the ones that can be measured by our economic system.  

We must guarantee REDD+ integrity through transparency and inclusion. 

REDD+ cannot work without a meaningful commitment to – and accountability for – participation by indigenous peoples and local communities (IPLC), given their role as the main stewards of the world’s carbon sinks and biodiversity. This commitment must include supporting IPLC in securing land tenure and carbon rights, and guaranteeing Free, Prior, and Informed Consent (FPIC). It also means that climate finance mechanisms need to do more work to incorporate indigenous perspectives and economic development strategies (as laid out through Life Plans or other tools). 

Likewise, carbon markets on the whole cannot deliver on their promises without transparency and a strong commitment to integrity. Our Ecosystem Marketplace initiative was founded with this mission: as an objective, not-for-profit information platform providing the kind of trustworthy and timely information that carbon markets and other climate finance mechanisms need to function effectively. 

We see a role for multiple REDD+ mechanisms to attract different types of funding and fit different contexts. 

One issue that seems to be dividing this space is whether resources and attention should be focused on jurisdictional or project-based REDD+. Our position is that we need more of both.  

Jurisdictional REDD+ can deliver the large-scale supply and demand signals that are needed. It can also guarantee higher floor prices for REDD+ credits at a large scale. Jurisdictional approaches are uniquely equipped to incentivize governments to address many underlying drivers of illegal deforestation: weak enforcement of environmental protections, perverse economic incentives, such as taxes and subsidies that drive conversion for agriculture, and so on. 

Meanwhile project-based approaches have a long history of innovation in the voluntary carbon markets, with knock-on benefits for the entire carbon finance sector. Scaling up demand for REDD+ via the voluntary carbon markets should be an additional source of finance on the road to achieving jurisdictional outcomes, especially if nesting can provide a bridge between the innovation and targeted finance that projects can deliver, and the scale needed from jurisdictional REDD+. 

Moreover, territorially based REDD+ projects developed in partnership with IPLC are often well positioned to deliver benefits directly to IPLC. These benefits are not necessarily small-scale in nature, either; project-based REDD+ can reach significant scale considering the large territories owned by IPLCs. In the Amazon alone indigenous peoples control over 210 million hectares.  

Innovations are still needed both in jurisdictional and project-based nested REDD+ to channel finance to areas with high forest cover and historically low deforestation (HFCLD), given that many of those places are increasingly at risk. REDD+ mechanisms need to better engage and benefit IPLCs with a track record of successfully protecting their forests. One path forward is for HFCLD to be seriously considered as a category for jurisdictional and project-based REDD+, although we recognize this requires resolving a number of technical limitations, particularly around how to treat additionality. 

REDD+ can’t work in the absence of inclusive and just partnerships with indigenous peoples and local communities, the planet’s best guardians of forests. 

First and foremost, jurisdictional REDD+ programs must take seriously the history of mistrust and conflict between IPLC and governments, and lingering concerns about whether governments will be good partners to IPLC. The mission to protect tropical forests, including REDD+, depends very much on IPLC: One-third of tropical forest carbon stored aboveground in the Amazon Basin lies within indigenous territories. In MesoAmerica, that share rises to nearly one-half, 31.4% in the Democratic Republic of Congo, and 36% in Indonesia. Not taking the time to build reciprocal relationships would be a substantial missed opportunity for both IPLC and jurisdictional programs, and a blow to global efforts to protect tropical forests.  

What does good partnership look like? It depends on the community, but some general principles can be established. Jurisdictional systems must clearly define, respect, and directly compensate the carbon ownership rights of IPLCs through benefit sharing mechanisms that are co-designed with IPLCs, including strong safeguards and FPIC. Jurisdictional mechanisms’ funding and policies cannot criminalize IPLC by forced removal from their lands, and must recognize and respect (via safeguards) traditional knowledge and cultures of indigenous peoples. REDD+ performance metrics also need to be culturally appropriate and co-designed with IPLCs. In addition, jurisdictional systems must provide for independent grievance mechanisms for IPLCs and other stakeholders. 

There are other ways in which jurisdictional REDD+ can better encourage IPLC participation. For example, clarifying whether indigenous territories can themselves be jurisdictions under many existing standards. Jurisdictional systems can also find ways to decrease the complexity and cost of validation and verification standards so that more IPLC territories can participate, so long as these efforts are delivering high integrity emissions reductions and fulfilling the Cancun safeguards. Doing so would  reduce the high barrier to program entry and increase the area of forest eligible for credible offsets.  

Finally, although jurisdictional REDD+ is shifting toward performance-based payments, donor governments must keep investing in governance and readiness in IPLC. Significant support is still needed to increase the capacity of IPLCs to adequately respond to REDD+ opportunities. The cost of this capacity building cannot be expected to come solely from philanthropic cooperation, but rather be a central cost in architecture and design of jurisdictional programs. 

Project-based REDD+ should of course abide by similar principles of FPIC, recognition of IPLC carbon rights and cultures, appropriate compensation, and including IPLC in design and implementation of benefits-sharing when their projects involve IPLC territory.  

More to the point, if IPLC believe their best opportunities lie in designing, implementing, and benefitting from their own REDD+ projects nested within or independent of jurisdictional programs (with questions of carbon accounting being appropriately addressed), they have every right to do so.  

Looking forward, our team will remain active partners and participants in the REDD+ space – providing data, thought leadership, opportunities for consultation and coalition-building between diverse stakeholders, demonstration where appropriate, and sustained and creative advocacy with key decision-makers in climate finance. We welcome new collaborators in this work, always. REDD+ is too important a piece of the climate solution portfolio; we need to get it right. 

(This blog first appeared on Forest Trends’ blog: Viewpoints on 25 August 2021)