REDD.plus – A green idea, but too many red flags

REDD.plus – A green idea, but too many red flags

The potential for “REDD.plus” to dump huge quantities of carbon credits into the voluntary carbon market has caused consternation in some parts of the market. It was definitely a hot topic at the many carbon events in London last week. This article by Trove’s forestry team assesses the intentions and short-comings of REDD.plus and its implications for the market.

In 2021 the Coalition for Rainforest Nations (CfRN) launched REDD.plus, a new platform for country-level carbon credits from forests. Papua New Guinea was the first country to join and now offers over 9 million ‘REDD+ Result Units’ (RRUs) at USD 16/tonne. Gabon, Ghana, and Honduras have registered their interest. Gabon alone plans to issue 90 million RRUs before the end of this year. 

The CfRN defines RRUs as sovereign carbon ‘credits’ issued by countries themselves. It claims that this sovereignty makes them superior to jurisdictional and project-based REDD+ credits for having higher integrity, and being more transparent and more effective at protecting tropical forests. 

Unlike jurisdictional-scale standards, such as ART-TREES or Verra’s JNR, REDD.plus did not develop a methodology. Instead, it uses emission reductions reported to the UNFCCC according to the Warsaw Framework for REDD+, part of the Paris Agreement. REDD.plus and participating countries convert these reported reductions one-to-one into RRUs. This has led to concerns that REDD.plus will ‘flood’ the market; 90 million prospective RRUs from Gabon would be close to the total number of REDD+ credits issued in 2021 (117 million). 

From our analysis, we find that the methodological risks and general red flags of REDD.plus severely compromise any credits issued. 

Methodological risks:  General red flags: 
  • Baseline inflation 
  • Poor quantification 
  • Insufficient validation and verification 
  • Lack of permanence safeguards 
  • The UNFCCC secretariat does not recognise their definition of a ‘UNFCCC REDD+ mechanism’ 
  • Did not receive CORSIA eligibility – twice 
  • Low levels of interest in the market 
  • Uncertainty on free, prior and informed consent 
  • Lack of transparency on distribution of funds 

Low methodological rigour 

Through the Warsaw Framework, countries can track and receive support for REDD+ activities by submitting forest reference levels (FRLs) or forest reference emission levels (FRELs) and reporting emission reductions against these baselines. They may receive result-based payments, as Brazil and other tropical forest countries have done with Norway.  

The CfRN refers to these activities as the ‘UNFCCC REDD+ mechanism’, a characterisation that the UNFCCC secretariat has refuted. Simply put, the Warsaw Framework is not a UNFCCC REDD+ credit mechanism, and it was not designed to generate individual credits. As a results-based payments scheme, the payer must decide if the reductions are robust and how many ‘results’ they will pay for, often performing additional oversight themselves. The process does not always provide the methodological rigour to issue credits that each represent one tonne of emissions reduced, which may cause significant misestimations. 

For example, there are fewer restrictions on setting a historical reference period. Brazil and Indonesia used reference periods of up to 20 years in their submissions, creating higher baseline emissions from deforestation than shorter periods would have produced. In comparison, ART-TREES requires a reference period of 5 years. The use of low-resolution and low-volume datasets, high variability in how forest area is defined, and whether natural and planted forests are classed separately add to the concerns about how many credits could be issued. 

Some of these methodological problems may also occur in low-quality project-based REDD+, but the scale of inaccurate values across a whole country is more significant. 

Independent verification & validation is insufficient 

In the Warsaw Framework’s process, experts nominated by countries review national submissions before results are publicly posted to the UNFCCC REDD+ Infohub. Reviewers may suggest changes to the initial submissions of FRLs and FRELs, leading to revised submissions, but no baselines are ever rejected. While the experts assess submissions for methodological consistency, the actual emission baselines or reductions reported are not verified. The Warsaw Framework also does not define ‘credits’, thus offering no process for how this ‘mechanism’ could be used to issue them. 

To decrease the risk of low-quality credits being issued, ART and Verra use independent verification and validation bodies (VVBs) to check and reject projects. Participants in result-based payment schemes listed by the UNFCCC’s hub, like Norway and the Green Climate Fund (GCF), use third-party VVBs to double-check a country’s reported emission reductions before choosing to issue payments. REDD.plus employs no such independent verification or validation. It accepts results reported to the UNFCCC at face value, no matter the potential inaccuracies. 

No permanence safeguards 

The REDD.plus approach lacks a range of safeguards for issuing and trading offset credits.  

The most significant risk is the lack of a buffer pool. Both Verra and ART require REDD+ projects (local and jurisdictional) to contribute a percentage of their credits to a registry-wide buffer pool. If an area of forest is lost, the pool can cover the loss by retiring an appropriate number of credits. For example, if Papua New Guinea had issued 9 million emission reductions with ART TREES instead of REDD.plus, up to 2.2 million credits would not have been issued to protect the integrity of the rest. 

REDD.plus has no clear methodology to safeguard permanence. There is no buffer pool, no uncertainty deduction, and no monitoring for reversals. Every emission reduction reported to the UNFCCC is converted to an RRU. This compromises the link between purchased carbon credit and actual emission reduction. In fact, REDD.plus was rejected by CORSIA twice on the grounds that ICAO decided that it could not assess if it had the basic features of a crediting programme. 

The future of REDD.plus 

There is no intrinsic problem with developing markets investigating new ways to raise funds for their natural habitats, high forest cover countries included. What we cover here are our concerns with REDD.plus itself in claiming to be selling carbon ‘credits’.  

While jurisdictional REDD+ is still seen as ‘high-quality’, the market does not seem to trust REDD.plus. After being available for a year, only 20,000 RRUs have been sold. This compares to 57 million retirements of verified REDD+ credits in the same period. The ‘flooding’ of the market has not materialised, and we think that further RRU issuances are unlikely to change that. 

Additionally, with a price of USD 16, Papua New Guinea’s 2014 and 2015 vintage RRUs are double the price of verified REDD+ credits from similar vintages, which averaged USD 8.80 in Sept 2022. No details are provided on how a share of revenue will reach local communities, nor was any engagement carried out in Papua New Guinea to ensure free, prior, and informed consent. 

Ultimately, purchasing credits from REDD.plus is like engaging in a miniature result-based payment scheme. Its ‘credits’ are not rigorous enough to offset or compensate for emissions, whether ‘sovereign’ or not. We cannot recommend that they are considered equivalent, let alone ‘superior’, to high-quality project-based REDD+ or jurisdictional REDD+ credits when available. 

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