New 1bn USD Initiative Raises The Bar For Forest Carbon Credits, But Risk Of Abuse Remains
A joint reaction by Carbon Market Watch and the Rainforest Foundation Norway to the announcement of a new coalition to finance forestry climate projects
BRUSSELS/OSLO 22 April 2021 In the context of the US President Biden’s “Leaders’ Summit”, today the US, UK and Norway, together with Amazon, announced a 1 billion USD initiative to purchase carbon credits from countries that reduce deforestation and forest degradation. As detailed in a statement by a group of international NGOs, financing forest protection at the national level is welcome, and urgent, but this should not be used to compensate - or “offset” - fossil fuel emissions.
The announcement comes as more and more companies are buying carbon credits from forestry projects. Many companies continue to claim that this cancels their own climate impact, which is not accurate. The credits purchased by the new coalition should hence not be used to meet emission reduction targets. While the buyer countries in this coalition say that they will not count the reductions towards their own targets, this is less clear for companies. The risk of double counting the reductions, once by the country where they take place and once by the company buying the credits, remains.
Gilles Dufrasne, policy officer at Carbon Market Watch, said:
“We need to channel finance to forest conservation on a large scale, and we cannot use this as an excuse to continue polluting. Today’s announcement goes in that direction but doesn’t rule out that companies will abuse the system to claim that they have no “net” impact on the climate. An emission reduction should only be counted once, and the new coalition should more clearly explain how they will ensure this. Today, too many companies are planning to offset their emissions with reductions that are already being counted by other countries.“
Many private companies have purchased carbon credits from individual forestry projects, which often do not represent real emission reductions. When such small-scale projects issue credits, they often create more credits than they should. Instead of buying credits from small-scale projects, the announced coalition will pay for emissions reductions at a national or regional scale, based on reduced deforestation compared to recent historical deforestation levels. While not a perfect solution, this is an improvement on current practices for creating carbon credits.
Anders Haug Larsen, head of policy at Rainforest Foundation Norway, said:
“We welcome this initiative as increased support to rainforest protection is urgently needed. It is important that funding for rainforest protection gives governments financial incentives to improve land-use policies, as this is the best way to achieve forest protection at the scale we need. We also urge rainforest countries to use these new funds to support indigenous peoples and local communities, as they often are the best stewards of the forests.”