Millions of carbon credits are generated by overestimating forest preservation

October 10, 2023

This means that many of the “carbon credits” bought by companies to balance out emissions are not tied to real-world forest preservation as claimed. REDD+ schemes generate carbon credits by investing in the protection of sections of the world’s most important forests – from the Congo to the Amazon basin. “Carbon credits provide major polluters with some semblance of climate credentials. “These carbon credits are essentially predicting whether someone will chop down a tree, and selling that prediction." Kontoleon points out that overestimations of forest preservation have allowed the number of carbon credits on the market to keep rising, which in turn supresses the prices.

The majority of carbon offset schemes are significantly overestimating the levels of deforestation they are preventing, according to a study published in Science.

This means that many of the “carbon credits” bought by companies to balance out emissions are not tied to real-world forest preservation as claimed.

An international team of scientists and economists led by the University of Cambridge and VU Amsterdam found that millions of carbon credits are based on crude calculations that inflate the conservation successes of voluntary REDD+ projects.

Consequently, many tonnes of greenhouse gas emissions considered “offset” by trees that would not otherwise exist have, in fact, only added to our planetary carbon debt, say researchers.

REDD+ schemes generate carbon credits by investing in the protection of sections of the world’s most important forests – from the Congo to the Amazon basin. These credits represent the carbon that will no longer be released through deforestation.

Organisations and individuals can then offset their own carbon footprint by purchasing credits equivalent to a given quantity of emissions.

Carbon credit markets have exploded in recent years. Over 150 million credits originated from voluntary REDD+ projects in 2021, with a value of US $1.3 billion. Some companies use carbon offsetting to claim progress towards “net zero” while doing little to reduce greenhouse gases, say researchers.

"These projects have already been used to offset almost three times more carbon than they have actually mitigated through forest preservation..."

Prof Andreas Kontoleon

The team behind the latest study argue that the booming trade in carbon credits may already be a type of “lemons market”: where buyers have no way of distinguishing quality, so some sellers flood the market with bad products, leading to a breakdown of trust and ultimately market collapse.

“Carbon credits provide major polluters with some semblance of climate credentials. Yet we can see that claims of saving vast swathes of forest from the chainsaw to balance emissions are overblown,” said study senior author Prof Andreas Kontoleon, from Cambridge’s Department of Land Economy.  

“These carbon credits are essentially predicting whether someone will chop down a tree, and selling that prediction."

Kontoleon points out that overestimations of forest preservation have allowed the number of carbon credits on the market to keep rising, which in turn supresses the prices.

“Potential buyers benefit from consistently low prices created by the flood of credits. It means that companies can tick their net zero box at the lowest possible cost,” he said.

REDD+ is a loose acronym for “Reducing emissions from deforestation and forest degradation in developing countries”. Currently, credits from voluntary “avoided deforestation” projects are issued based on predictions of tree loss that would have occurred without the REDD+ scheme.

Researchers say these calculations – which take historical deforestation averages or trends, sometimes from over a decade ago, across a wide region that usually includes the REDD+ site – are often far too simplistic.

The latest study looked in detail at 18 REDD+ projects in five tropical countries: Peru, Colombia, Cambodia, Tanzania and the Democratic Republic of Congo.

While a total of 26 REDD+ project sites were investigated, only 18 had sufficient “baseline” deforestation data available to allow for useful comparative analysis. 

The research team took a “counterfactual” approach. They identified existing areas of forest within a given region that closely resemble each particular REDD+ project – from matching levels of forest cover and soil fertility to similar records of mining and deforestation.

The source of this news is from University of Cambridge

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