Over the past two years, the voluntary carbon market (VCM) has shifted much of its support from projects aimed at reducing emissions from deforestation to those that seek to actively remove carbon from the atmosphere. This shift responded to negative press surrounding REDD+ (Reduced Emissions from Deforestation and Degradation) projects predominantly supported by Verra, the largest greenhouse gas (GHG) crediting program in the world. Verra responded to this criticism and has since taken steps to address legitimate issues raised by whistleblowers. Still, reduced confidence in credits associated with avoiding GHG emissions did not suppress the need and desire for the VCM to continue supporting climate solutions. Into this gap stepped afforestation, reforestation, and revegetation (ARR) projects that aim to remove, rather than avoid, emissions. This blog post outlines the shift in the VCM from preferring GHG-emissions avoidance credits to backing GHG-removal-based credits.
Negative Press Around REDD+ Projects Depresses the VCM
At the beginning of 2023, The Guardian published an article summarizing the findings of several scientific studies and their own investigation (in collaboration with other media outlets). These findings brought into question the value of carbon credits associated with reductions in deforestation. Among the primary conclusions of the article was that threats to forests (i.e., baseline deforestation) were greatly exaggerated, culminating in inflated claims of avoided GHG emissions. Verra has since begun releasing activity data to help standardize baselines for REDD+ projects under VM0048 Reducing Emissions from Deforestation and Forest Degradation. This deforestation data, reviewed and approved by Verra for specific regions, will reduce the risk that baseline deforestation is inflated by project developers to overstate the positive carbon impacts of their project.
Key Players Redirect the Market towards Removals
In 2023, the strategy of one of the leading investors in the VCM (Microsoft) shifted to invest heavily in GHG-removals, rather than GHG-emissions-reductions, projects. Although Microsoft did not explicitly link their change in strategy to negative press surrounding REDD+ projects, the timing of the shift coincided closely with it. Microsoft continues to invest heavily in removals projects in the U.S. (see their recent agreement with Chestnut Carbon to restore approximately 60,000 acres of forestland) and abroad. Led by Microsoft’s investments, the VCM registered growing demand for restoration-based credits and declining demand for REDD+-based credits in 2024.
Verra Releases VM0047
Amid the fallout from negative press surrounding multiple REDD+ projects, Verra released the VM0047 methodology in September of 2023 as a framework to assess ARR activities; VM0047 replaced the Clean Development Mechanism (CDM) methodologies AR-ACM0003: Afforestation and reforestation of lands except wetlands and AR-AMS0007: Afforestation and reforestation project activities implemented on lands other than wetlands.
VM0047 uses a dynamic performance benchmark approach and a dedicated leakage module in conjunction with the methodology (VMD0054 Module for Estimating Leakage from ARR Activities). In calculating leakage, the proponent must assess foregone production, that is, the amount of agricultural and fuelwood commodity production that would have taken place in the project area without a carbon project. If the proponent has chosen to implement leakage mitigation measures outside of the project area, some of this foregone production may be offset. New forest land can also be brought into a project to help offset leakage.
In the case of the performance benchmark, the methodology calls for the use of remote sensing data to determine vegetative regrowth in a donor pool, or control area. This control area must be matched (following specific guidelines) with the project area to ensure the two are similar. Vegetative regrowth in the control area can then be calculated and compared to regrowth in the project area as ARR activities are implemented and throughout the project lifetime to see the actual impacts of the project relative to a without-project scenario.
For both the calculation of leakage and the performance benchmark, Verra requires proponents to follow detailed, step-by-step instructions that meet specific criteria when performing calculations. In being prescriptive on how to calculate leakage and the dynamic performance benchmark in VM0047, Verra has decreased the likelihood that project proponents will:
- understate leakage by underestimating the magnitude of shifting agricultural activities and/or fuelwood collection to new areas (as an ARR project “pushes” these activities out of the project area);
- overstate GHG-removals by claiming that there would be little to no vegetative regrowth/tree regeneration in the absence of a carbon project (i.e., manipulating baseline removals to overstate the impact of the project relative to a without-project scenario).
Developing and Investing in High-Integrity Projects is Still Paramount
Despite the quality and rigor with which VM0047 was developed, some proponents still look to inflate crediting estimates. Verra has placed multiple ARR projects on hold in response to such concerns. Regardless of the project type, not all proponents strive to develop high-quality, high-integrity projects. Although much of the onus for excluding these proponents and their projects from the VCM falls on crediting programs such as Verra, ensuring project’s result in no-net-harm to stakeholders and the environment and that projects report actual climate benefits and calculate them accurately is not the responsibility of just one entity. From potential credit buyers to project developers and all the different organizations and agencies in between, every actor involved in the VCM bears responsibility for ensuring the quality and integrity of emissions reductions and removals projects.
EP Carbon’s Role in Supporting Removals Projects
Years of Experience with Removals Projects
EP Carbon has over 15 years of experience helping to develop high-integrity carbon projects within the VCM framework. This experience, as it relates to ARR projects, predates the release of VM0047 by over a decade. EP Carbon has served as a technical consultant for more than 40 projects to date, which have accounted for approximately 90 million tons of verified reductions or removals on more than 9 million acres (3.6 million hectares) of land. Although many of these projects have resulted in emissions reductions, several have been focused on carbon removals. EP Carbon has seen a significant increase over the past two years in the number of proponents contracting our services to assess compliance with or assist in developing projects under VM0047. With this increased demand for consulting services on ARR projects, EP Carbon’s experience with and knowledge of VM0047 has grown as we apply our years of experience to this relatively new methodology.
Rigorous Standards and Site Visits
Before committing to providing consulting or project development services to a proponent, EP Carbon provides comprehensive project screenings. During this screening phase, EP Carbon assesses and discusses project documentation to determine if the project is viable. Throughout this process, EP Carbon identifies potential shortcomings and challenges of a project and considers a project proponent’s resume and qualifications. We carefully select partners who have track records of integrity in project development and discard projects where ethical or moral questions may arise.
If project quality, eligibility, or viability doubts cannot be resolved from this initial screening of a project, we require a site visit by EP Carbon staff to ensure potential issues identified in the screening phase will not impact project integrity later. These site visits not only give EP Carbon staff the opportunity to assess potential project shortcomings but also allow staff to provide input on how to improve project design at an early stage of development. This early input helps improve project design, increasing the likelihood of developing a high-integrity carbon project.
Conclusion
Although demand for GHG-removal credits has grown substantially since early 2023, high-integrity REDD+ projects can and should continue to play a significant role in climate solutions. Still, with the decline in demand for REDD+ credits, ARR projects have become much more prominent in the VCM. Credit buyers may feel more confident that these removal credits represent actual net-climate benefits when compared to emissions-reductions-based credits. Although removals- and reductions-focused projects differ significantly in many ways, ensuring high-integrity is essential to both project types. Every actor in the chain that results in the verification of a carbon credit is responsible for ensuring this integrity, for guaranteeing that project benefits are real, that they are reported correctly, and that projects produce no net harm. EP Carbon carefully selects the projects we partner with, and we provide detailed and thorough support to ensure that our partners develop the highest-integrity projects possible.
Matt Ruggirello, Carbon Analyst
Matt is a Carbon Analyst at EP Carbon, contributing to AFOLU carbon project development with expertise in land cover analyses and the collection and modeling of forest inventory data. He previously worked as a Graduate Researcher at the Austral Center for Scientific Research in southern Argentina, quantifying tree regeneration and refining restoration strategies in degraded Patagonian forests. Matt holds a master’s degree in forestry from Northern Arizona University (U.S.A) and is nearing completion of a PhD in forestry and agronomy from La Universidad Nacional de la Plata (Argentina). He is the lead author of several peer-reviewed articles published in high-impact ecological journals. Matt also has several years of field experience as a Forester in the western United States. As a Forester for the Bureau of Indian Affairs, he assisted with forest inventories and sustainable harvest planning. He has experience in ecological restoration from his role with the Washington State Department of Fish and Wildlife and spent time over the course of a decade helping to design and implement eco-tourism and agroforestry projects in the Ecuadorian Amazon.