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Tropical Forests | Arguing While the World Burns: It’s Time for Peace

A call for curiosity, conversation and collaboration to save tropical rainforests

Commentary by: Peter Boyd, Resident Fellow of Yale Center of Business and the Environment and Daniel Vicente Ortega Pacheco, co-chair ICVCM expert panel and former Minister of Environment for Ecuador


[First Published on Medium here: https://bit.ly/PBDOforests]


Bosque Nuboso de Mindo, Ecuador


It’s Time for (Serious) Funding to Flow to Rainforests. It’s Time for Peace.

What will it take for standing primary tropical rainforests to be worth more alive than dead?

After decades of multilateral negotiations, calls for ‘payments for ecosystem services’, and many more ideas that have not gained traction, we are still too far from being able to answer the key question that will halt tropical deforestation and preserve — even better, restore — the “lungs of the planet”. Carbon markets have risen over time as a key potential solution that could mobilize both private and public capital to save forests; but there are many influential constituencies who work to save the forests but are against forest carbon crediting altogether, and there are those that advocate for carbon markets but against the inclusion of forests. Within the movement to save forests through carbon markets, we note three distinct approaches that we’ll explore: project-based, jurisdictional independent standards, and sovereign initiatives under the UN system.

We believe all three approaches have inherent validity and climate benefit, but their public arguments are detrimentally affecting buy-side confidence in the market. We see a real opportunity for the curious and the civil amongst the key players to gather and really learn from each other: flipping the focus from ‘ourincredible strengths and the debilitating weaknesses of the other,’ to considering alternative worldviews, the strengths of other approaches, and exploring opportunities to improve. In the shorter term they may agree to communicate more consistently as an ‘industry’ or wider movement. Down the line they may even collaborate.


Currently, would-be buyers (think of corporations, from airlines to industrials, who view purchasing carbon credits as part of their environmental responsibility and approach) are surrounded by an unpleasant cacophony of reasons they may have bought ‘the wrong approach’. These buyers then choose to sit on the sidelines; potentially willing to pay for high-integrity, impactful actions for people and planet, but unsure how to really help and escape criticism for their choice. On the demand-side, there could be an opportunity to buy credits from a particular approach according to their preference (without fear of criticism) or enthusiastically invest in a varied portfolio that rewards efforts in many guises — in this decade, in time to make a difference.


For this article, we are focusing on how exploring common ground amongst the three existing approaches to forest carbon markets could create more consistent and positive messages to potential buyers and maximize the chance of forest carbon reaching useful scale. For those that argue that ‘useful scale’ will still not be enough to save the forests, we would agree with you, but contend that there is still huge benefit in striving for peace. Call it an arguably necessary, if insufficient condition for the forests to stop burning.


An (Overly) Simplified View of Three Approaches to the Same Problem


Saving tropical rainforests currently has (at least) three different approaches within the broader ‘we-need-to-save-the-forests’ through carbon markets movement, which we might crudely view as three different views on the best scale and application of REDD — Reducing Emissions from Deforestation and Degradation, a national-scope mechanism created and administered by the UNFCCC:

1) Project-based independent standards: those that develop, sell and advocate for individual forest projects as the best approach, targeting prioritized areas typically a specific area within a country. The projects are developed according to a third-party methodology and later verified by another third party. Speed to market can be the fastest of the three approaches to match supply-side capability with buyer demand. The quality of the vast majority of this type of credit have been very publicly questioned on the grounds of overestimation, impermanence, leakage, and negative effects to human rights, such as by John Oliver and The Guardian, then latterly defended by Verra and Sylvera. Though this is a fragmented field, we consider Verra to be a leading flag-bearer for this approach.

2) Jurisdictional Independent Standards: ART/TREES, or the Architecture for REDD+ Transactions, are leading proponents of sub-national jurisdictional REDD, aiming to provide more confidence in the environmental and social integrity of tropical forest emissions reduction by specifying minimum area sizes for credit ‘nesting’ and standardizing methodologies across geographies. This standardization is designed to lead to much wider trading combined with confidence in quality. To that end, ART/TREES also oversees validation, verification, and issuing of the serialized resulting credits. They have specified a minimum area of 2.5m hectares with an aim to be national in scale by 2030.

3) Sovereign carbon or national-only credits: The Coalition for Rainforest Nations (CfRN) has been a leading proponent of national-level-only, sovereign-issued carbon credits (or ‘RRUs’ — REDD+ Results Units), made available on a platform they have created called REDD.plus. Countries that choose to, can not only issue their REDD+ results openly on the UN REDD Info Hub, but also make the credits available directly to buyers, as envisioned by the UN Warsaw Framework, with “results-based finance coming from a variety of sources” and relying on the independent review set forth by the COP. While the speed to market may be slower, this approach is more reflective of different countries’ unique circumstances and choices. There is correspondingly less standardization between credits from different nations.



Amazon Rainforest Lake Reflection, Ecuador


Save the Forests: A New Circular Firing Squad


For 1.5 degrees of warming to be a limit, and not just an aspirational target, we must treat the halving of emissions by 2030 and the halting and reversing of deforestation as complementary and essential goals. Bold pronouncements on the imperative to save the rainforests have only increased in frequency and magnitude at the global climate talks, from countries and companies alike. At the global level, all modeled pathways that fulfil the net-zero-by-mid-century goal of the Paris Agreement require a minimum 70% reduction — or a complete halt and reversal — of tropical deforestation by 2030, as a crucial enabler for long term action. Forests must turn from a net source of emissions to a net sink. And there is a real sense of urgency from the science: reports from IPCC and work from the Global Carbon Budget show less than a decade to turn the situation around.

The environmental movement has unfortunately sometimes functioned as a ‘circular firing squad.’ Each stakeholder with a strongly held opinion may whole-heartedly be aiming at the same important target but can harm — intentionally or not — another stakeholder also trying to save the environment. This is partly because the target is complex, and each actor has the tendency to think they have the ‘right’ approach in a competitive game with limited available funding. In a related post, Tom Carnac of the Outrage & Optimism podcast, talks about the potential (false) dichotomy of chasing ‘perfection’ and ‘momentum.’ Over the years, the environmental movement has not only witnessed clashes between those pursuing ‘perfection’ or ‘momentum,’ but also, passionate clashes of what both ‘perfection’ and ‘momentum’ even mean in the situation being discussed.

And so it appears with tropical forest preservation. As Nero famously ‘fiddled while Rome burnt,’ we who purport to stand for tropical forest preservation are ‘arguing while the world burns.’


When asked by potential buyers, from consumer brands to institutional investors, about the alternative approaches, impassioned reasons why one couldn’t possibly buy the other options, is currently putting off many a discerning buyer. And these buyers end up sitting on the sidelines, all while those that decide the fate of the forests — from Indigenous communities to rainforest nations — receive little to no funding to keep trees standing. The world not only loses the carbon benefits (or prior, the reduction in harm), but we also squander the additional global cooling effects of forests, their stabilizing hydrological effects, ecosystem services, and of course all the biodiversity and livelihoods contained within them.

While there are of course experts and organizations that have been working tirelessly to bridge differences of opinion (we need only look at the two-plus year process of the Tropical Forest Credit Integrity (TFCI) Guide and the Integrity Council for Voluntary Carbon Markets and its hundreds of stakeholders consulted), we see the net effect on the buyer as warring factions that confuse their purchase decision.

A Starting Sketch of the Differences

Each of the approaches have important differences that we attempt to briefly summarize here at the double-risk of omitting significant details and displeasing those close to this field, as they may passionately agree with some points but disagree with others. These differences include strengths and weaknesses of one approach or another. As this is a call for ‘Peace Talks’, we would hope that this inadequate and crude summary is soon superseded by the result of future robust discussion between key parties:

Standardization: Project-based and ART/TREES approaches emphasize the benefit of standardization, arguing that RRUs at national scale, issued under the UN REDD+ mechanism have too much national variability and flexibility and lack independent third-party verification. Project managers follow a third-party methodology (eg Verra), while ART TREES is arguably the most precise and comprehensive. Sovereign Carbon proponents such as CfRN point to the Paris Agreement as the highest standard available, recognizing the rainforest nation’s ability to design a system and forest preservation strategy appropriate to their unique circumstance. This lack of uniformity and absence of third parties lead to criticism that RRUs are not even a ‘Standard’. This one difference alone has led to advocates of one of the three approaches to declare the others as not worthy of consideration.

Scale: All parties agree on the huge increase in scale that is required but realize that only 240 million credits have been retired on the voluntary carbon markets to date, with a need of at least 500 million per year. The LEAF coalition — the demand-side group supporting ART/TREES — has amassed $1.5bn in commitments over 5 years at $10 per ton. Though impressive, this commitment has not translated into purchases made, and even if fully invested does not really make a dent in the problem — neither the volume nor the price per ton might be considered enough to change the opportunity cost calculation in forest nations. While Sovereign Carbon has potentially the largest scale of tons available, there has yet to be a large purchase of RRU credits. Purchases with associated retirements (i.e. not held for re-trading) are massively sub-scale when contrasted with the need, across all approaches.

Baselines: Project-based approaches create counter-factual baselines (what would have happened without the project), and these are reviewed every six years. The ART/TREES standard and UNFCCC stipulate historical baselines and are recalculated (not just reviewed) every five years.

Leakage and Buffers: The inherent risk of a Project credit is that it merely displaces the deforestation outside the boundary of the project — the logging moves round the river bend. Project developers argue that they are created in specific areas for a reason — e.g., protecting hectares at the ‘frontline’ of deforestation threat. They also have a ‘buffer’ requirement. Jurisdictional schemes aim to ‘nest’ areas to reduce the risk of ‘cherry-picking’ project areas but cannot prevent leakage as the minimum size is not expressed as a percentage of forests but currently fixed at 2.5m hectares, which potentially a very small proportion for a large country, for example, Brazil’s primary rainforest is over 450m hectares. Sovereign Carbon proponents argue that only at the national scale can the world ensure there is no leakage, as all areas in each country are ‘netted out.’ This argument relies on the UN process keeping all rainforest nations on board and accountable, otherwise the ‘leakage’ could cross borders. Sovereign carbon have not yet created buffer requirements.

Validation and Verification: Sovereign Carbon RRUs, as part of the UNFCCC REDD+ process, are subject to a UN independent review, conducted by experts drawn from a roster — one from a developing country and one from a developed country. Carbon crediting programs argue that such assessment falls short of the robustness of third party verification as implemented according to global assurance models. Sovereign Carbon proponents counter that reference levels have more frequently been adjusted under the UN roster ‘assessment’ than third party verification.

Safeguards and SDGs: Safeguards are designed to ensure no harm results from the forest preservation initiative: social and environmental risks have been mitigated and Sustainable Development Goal impacts quantified. Market participants across the three approaches often claim that their credits ensure no harm to people and planet and they contribute to Sustainable Development Goals. SDG impact reporting has been patchy however and the quality of information low. Buyers have called for increased transparency, as little to no evidence of impact is generated. Stringent requirements are needed for carbon crediting programs and projects to consistently deliver high-quality credits in line with SDGs, including the adoption of SDG impact measurement and management. This is particularly critical when we consider the major role that Indigenous peoples and local communities play in forest conservation. Independent grievance mechanisms and strengthened representation in relevant governance bodies for affected communities — including Indigenous peoples and local communities — is key to highlight social impacts such as local employment, gender equity, and community land use. Methodologies, engagement models, safeguards, and overall positive sustainable development impact measurement tools must also be updated accordingly. Nations under UN REDD+ need to show evidence of a safeguard information system, while ART/TREES goes further, requiring some impact reporting. Carbon Market Watch commissioned an analysis on grievance mechanisms in voluntary carbon markets and found failings in structure as well as practice.

Adjustments to ensure an exclusive claim: to avoid double counting a credit for a ton of CO2, it should not be ‘claimed’ by more than one entity. ART/TREES, while consulting on the formation of its JREDD rules, decided not to require the host seller country to make an adjustment of its GHG accounts if there is an international purchase of their credits. Project-level credits also do not require nations to adjust their GHG accounts. For Sovereign Carbon, our understanding is that only when a host country adjusts their NDC can a private sector buyer from outside the country ‘claim’ the ton purchased as ‘theirs.’

Discussion, Listening, Increased Understanding, and A Better Answer Ahead?

There is the old story of blind people holding onto an elephant and agreeing on what they will call it. In their minds however, they are imagining very different pictures — whether it is a rope (tail), a tree trunk (leg), spear (tusk), or snake (trunk). The full picture of the elephant would only emerge once they talk and understand each other.

When trying to save our tropical rainforests through carbon markets, we see potential for the current different approaches to learn from each other and furthermore, to co-exist and collaborate. This would improve the quality of every offering for the buyer and contribute to build trust across relevant actors of the climate arena.

A note on the Buy Side

Buyers do not need to be exclusively convinced that one approach is the only option to buy. If they were not discouraged to buy the other approaches, they may choose to amass a portfolio, matching different credits to different initiatives within their organization, a regular practice already employed to manage risk with investments.

Increasingly buyers are becoming less likely to buy credits to ‘offset’ their current emissions, even if the ‘portfolio approach’ takes off. Latest guidance from Science Based Targets Initiative, the UN Race To Zero criteria, and others, are clear that society wants companies and cities to reduce their ownemissions to zero, not pay someone outside their value chain to help them.

While this has already depressed demand for voluntary carbon credits, we believe there is still opportunity for a robust private sector market, especially when companies take responsibility for their historic emissions. For those cumulative emissions, credit purchases would be essential. This responsibility is noted as a Leadership Practice by UN Race To Zero and expanded upon in a separate paper on a call for a robust definition of Net-Zero that includes past emissions.

Paisaje urbano de Banos, Ecuador

It’s More than Carbon — It’s All About Impact

The buyer of a carbon credit is also interested in the story. It is often about much more than carbon for them — as it is for the planet.

We mentioned the old story of the elephant: Gabon had a clever pitch at COP27, calling for “More Trunk Space” and promoting their “Elephant-Positive” credits, a wordplay on the net-positive and nature-positive movements.

As we are calling on companies everywhere to invest in ‘Beyond Value-Chain Mitigation’ — that is, saving forests above and beyond what the world expects them to do in their own value chain — the stories behind what else they are saving are critical, whether it is helping secure the future of the wildlife, the surrounding communities, and more.

All three approaches would gain from developing guidance that reconfigures forest-based credits as contributing to both climate mitigation and sustainable development. They should then engage with policymakers to reinforce this through supportive laws and regulations. For instance, the text of Article 6 emphasizes the same objective and most recently, the Article 6.4 Supervisory Body has decided that the SDG Tool mandated in the Glasgow decisions shall be mandatory and part of the activity cycle. The Voluntary Carbon Market is an instrument of a global financing strategy for sustainable development (Songwe et al., 2022). In this context, emerging self-regulating efforts such as the Integrity Council for the Voluntary Carbon Market and the Voluntary Carbon Market Integrity Initiative have great responsibility to fill the void.

Civil society organizations, academic researchers, and firms providing data and verification can and should collaborate on market transparency and could go further to collaborate on quality ratings. Public interest groups and market stakeholders should produce assessments of climate and SDG impacts that are robust and credible, benefiting from improved disclosure triggered by the new guidance. This is of critical importance both to ensure system-as-whole fungibility but also to address genuine concerns about environmental and/or social integrity thriving not only promoters of tropical forests conservation and climate action but also those advocating for Indigenous rights. It is important to note that some of these groups are strongly against forest carbon crediting altogether. Resolving these concerns is central to ensuring that forest carbon credits continue to build credibility and increase public support.

Institutional investors, international donors, and development financial institutions (DFIs) should directly support Indigenous peoples and local communities. These groups need support to design and implement impact-oriented crediting programs and to advocate for fair benefit-sharing arrangements. Processes and requirements for receiving finance and technical assistance must be accessible to groups with limited capacity.

A Call for A Neutral Convener

Indigenous ways of knowing describe ‘the sacred space in the middle’; the recognition that in any situation there are always multiple truths with different parties, and the wisdom lies in seeking the truth between. While we have mentioned that some have worked hard to build bridges, we have not seen enough evidence of key players from the three approaches willingly seeking out the other to understand the other and explore the middle ground — at least, not on their own initiative. Would an invested benefactor like the country of Norway, a prominent climate-focused foundation or academic institution, be willing to step up to help unblock and accelerate one of the climate projects in the remaining years of this decisive decade?

As a wider environmental movement, we have surpassed these obstacles and come together before. We Mean Business Coalition was an initiative funded by visionary third parties to proactively encourage the environmental non-profit business coalitions of the time, to start truly coordinating on messaging and putting aside differences in the lead-up to COP21 in Paris. Arguably this coalition was one of many seeds intentionally planted and nurtured that year, that resulted in the Paris Agreement succeeding.

What could we hope for?

At best, we are looking forward to a series of discussions where key players from the three approaches genuinely ‘seek first to understand, then be understood.’ Over-time, we may even see a convergence of the models: flourishing projects nested at national scale (well before 2030), with real and verifiable climate and sustainable development impact; independently assessed and verified by the best combination of the private sector and the UN roster; with a degree of standardization that creates global consistency and buy-side confidence, while allowing for national determination of approach given their unique circumstances and recognizing years of hard work completed without reward.

At minimum, we hope for agreement and coordination on how to communicate externally on matters of commonality and difference, allowing and even encouraging demand-side organizations to be non-exclusive buyers of different credits to suit their narratives and business needs. At this base level of progress, we hope to free the buyer of the paralyzing fear of backlash for buying the ‘wrong’ type of credit.

Whichever direction we take, we hope for clear transparency on where the funds are going and how much of the total purchase price for every credit goes to each recipient. Ultimately it should be known by all parties how much gets to the Indigenous communities, the 5% of the global population who are local stewards of 80% of the world’s tropical forests.

It is only when that money reaching the local community is enough, will our standing rainforests be worth more alive than dead.

This is a draft version of a paper submitted to appear in Yale Forest Forum’s Overstory newsletter. The authors welcome constructive ideas on how to improve the article and more importantly the situation in the real world!

Peter Boyd is a Lecturer at Yale School of the Environment, Resident Fellow at the Yale Center for Business and the Environment. He is one of five faculty currently hosting a Yale Forest Forum series “How Can the Voluntary Carbon Markets Make a Meaningful Contribution to Protecting Tropical Forests?” (The last webinar in the series on April 27th 2023 aims to gather experts on the different approaches on one webinar with the title “Seeing the Forest for the Trees: Building Buy-Side Confidence by Finding Common Ground”). He has advised and argued with the CfRN team, while only engaged in robust discussions with representatives from ART/TREES, Verra and project developers. He was on the advisory board for the TSVCM (Taskforce for Scaling Voluntary Carbon Markets) and now serves on the Distinguished Advisory Group for the ICVCM (Integrity Council for Voluntary Carbon Markets). In the lead-up to the Paris Agreement, he was the ‘Net-Zero’ representative of The B Team in We Mean Business. He is Founder of his own leadership and coaching company Time4Good. Views expressed here are his own personal views and not of any affiliation mentioned.

Daniel Vicente Ortega Pacheco is the current Co-Chair of the Expert Panel at The Integrity Council for The Voluntary Carbon Market. He has served as member of the Advisory Council of the Green Bond Principles and the Executive Board of the UN Clean Development Mechanism. He is former Minister of Environment of Ecuador and has over 15 years of experience in climate change diplomacy. He has contributed to the international climate regime including the outcome of ministerial negotiation for REDD+ within the Paris Agreement. Currently, Daniel is responsible for leading panels across both governance of carbon credit programs, as well as social and environmental safeguards and sustainable development impact of carbon projects. Currently, he is the Director of the Public Policy Development Center at ESPOL, where he leads the Sustainable Finance Initiative and Carbon Platform as multi-stakeholder efforts to promote Ecuador’s access to finance for sustainability transition. He is the Director at BIOCARBON, a leading consultancy company on sustainability and decarbonization strategies. Views expressed here are his own personal views and not of any affiliation mentioned.

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