Integrity Council for the Voluntary Carbon Market approves three REDD methodologies. Risk of millions of credits that are “non-additional, significantly over-credited, and of low permanence”

The Oeko-Institute has withdrawn from the ICVCM. Two members of the Expert Panel have resigned.

On 15 November 2024, the Integrity Council for the Voluntary Carbon Market (ICVCM) announced that it had approved three REDD methodologies. Two of them are from Verra, the US-based carbon certifying company. The other is from the Architecture for REDD+ Transactions (ART), also based in the US.

The three methodologies are:

• (ART) The REDD+ Environmental Excellence Standard (TREES) v2.0, TREES Crediting Level;

• (VCS) VM0048 Reducing Emissions from Deforestation and Forest Degradation v1.0; and

• (VCS) Jurisdictional and Nested REDD+ (JNR) Framework v4.1.

The ICVCM states that, “No credits have yet been issued under the approved methodologies.” In other words, there is absolutely no track record of whether these projects will issue vast numbers of junk REDD credits. Neither is there any independent analysis of the impact of these projects on Indigenous Peoples and local communities.

In a blog post about VM0048, carbon credit rating firm Calyx Global acknowledges that, “until a sample of actual projects has been assessed, it is impossible to know whether the new methodology will deliver high-quality REDD credits”.

Nevertheless, as soon as projects using these methods start issuing carbon credits, they can be labelled with the ICVCM’s Core Carbon Principles, which are supposed to ensure high-quality carbon credits.

The ICVCM notes that there are nine jurisdictions in the ART TREES pipeline, which could issue as many as 123 million credits. A further eight jurisdictions are developing TREES documents for registration on the ART Registry.

According to the ICVCM, there are 21 projects currently being developed under Verra’s VM0048. Verra’s registry lists just 14 projects, one of which has been rejected. The ICVCM estimates that the VM0048 pipeline projects could generate 300 million credits.

Meanwhile five projects are in Verra’s JNR Framework pipeline.

Despite the lack of evidence of how these methodologies will work in practice, Gabriel Labbate, co-chair of the ICVCM’s Expert Panel and the Global Team Leader of the UN-REDD Programme at the UN Environment Programme, announced that,

“These approved methodologies have demonstrated that they have significantly improved the integrity of REDD+ methodologies. Throughout the assessment process we found that they have rigorous approaches in place to ensure additionality, permanence, robust quantification and social safeguards, among other criteria.”

Two days before the ICVCM’s announcement, Labbate wrote an article for Reuters that promoted a series of fallacies about carbon markets:

Two resignations from the Expert Panel

Following the approval of the three REDD methodologies, two members of the ICVCM’s Expert Panel resigned.

Lambert Schneider, Research Coordinator for International Climate Policy at the Germany think tank Oeko-Institut, was co-chair of the Expert Panel from 2021 to 2023. Following that, he was a member of the panel.

In a statement about leaving the Expert Panel, Schneider says,

“In my view, these three methods do not meet the requirements of ICVCM's Assessment Framework. The ICVCM could play a crucial role in addressing the integrity issues in the voluntary carbon market. However, the decision that has now been taken calls this into question.”

The Oeko-Institut was a founding member of the ICVCM. In September 2024, the organisation withdrew from the ICVCM. Oeko-Institut states that, “The decision was prompted by concerns that the ICVCM will categorise carbon credits as high quality that do not meet ICVCM's criteria and requirements.”

Jürg Füssler, a Managing Partner at the Swiss sustainability consulting firm Infras, also resigned from the Expert Panel. In a statement explaining his decision, Füssler writes that,

“In my assessment, these methodologies, in their current form, do not meet the Core Carbon Principles (CCP), as operationalized in the requirements of the Assessment Framework with regards to additionality, robust quantification and permanence. . . .

“REDD activities are comparatively large activities in the voluntary carbon market. With its decision, ICVCM risks that the market is supplied with millions of CCP-labelled credits from activities that are non-additional, significantly over-credited, and of low permanence.”

Schneider and Füssler, together with Quirin Oberpriller of Infras and Randall Salding Fecher of Carbon Limits, have written a detailed analysis of how the three REDD methodologies do not meet several of the requirements of the ICVCM.

Baselines, leakage, additionality, and permanence

Schneider, Füssler, Oberpriller, and Salding Fecher write that,

“The methodologies do not appropriately address the inherent uncertainty in establishing deforestation baselines which can lead to large overestimation for individual mitigation activities.”

The three methodologies assume that average deforestation levels in a jurisdiction over the past five or ten years will continue. But using historical deforestation data for 54 countries with tropical moist forests reveals that this is rarely an accurate assumption. Taking a historical reference period of 2007 to 2016 and a crediting period of 2017 to 2022 shows that “the potential for overestimation or underestimation of baseline deforestation rates is very large”.

This graph, from an assessment of VM0048 by the Carbon Credit Quality initiative illustrates the problem clearly:

In Uganda, the deforestation between 2017 and 2022 was only 23% of the deforestation level assumed in the baseline. In Cameroon, deforestation was 213% of the level assumed in the baseline.

“This could lead to large overestimation or underestimation of baseline deforestation rates,” Schneider, Füssler, Oberpriller, and Salding Fecher write.

None of the methodologies account for all relevant forms of leakage. And leakage across international borders is not considered at all.

“Demonstrating additionality is difficult as it requires assessing the counterfactual scenario of what will happen without the carbon credits,” Schneider, Füssler, Oberpriller, and Salding Fecher note. They argue that several of the ICVCM’s requirements for demonstrating additionality “are not fulfilled by the approved methodologies”.

Carbon stored in forests is released back into the atmosphere if the forest burns, or if it is logged. Schneider, Füssler, Oberpriller, and Salding Fecher refer to the Zambézia Integrated Landscape Management Programme a jurisdictional project launched in 2019 under the World Bank’s Forest Carbon Partnership Facility. The project failed to reduce deforestation.

Self-regulation: The foxes guarding the hen house

The underlying problem is that the Integrity Council for the Voluntary Carbon Market is an attempt at self-regulation by corporations and organisations that are involved in carbon markets. As Follow the Money points out, most of the 22 members of the ICVCM’s board “have a commercial background in the CO₂ market or in the financing of nature projects”.

The World Business Council for Sustainable Development, the Environmental Defense Fund, the Bezos Earth Fund, the World Resources Institute, Winrock International, and Conservation International all have representatives on the ICVCM’s board. These organisations are all promoters of carbon markets.

Three representatives of Indigenous organisations are the only ones without a commercial background (and one of them, Francisco Souza, works for Conservation International).

A spokesperson from the ICVCM tells Follow the Money that, “The CO₂ market must attract a lot of financing from the private sector.” And, the “expertise of commercial board members” must help with that.

Rutger Claassen, professor of political philosophy and economic ethics at Utrecht University, tells Follow the Money that governments are increasingly transferring the responsibility to regulate to corporations. This is partly because governments lack the capacity which is itself at least in part the result of decades of neoliberalism and privatisation. It is also “at the initiative of the business community,” Claassen tells Follow the Money, “which hopes to ward off government regulation this way.”

Claassen highlights a fundamental issue with carbon markets:

“The problem is that buyers – for example an energy company like Greenchoice – and project providers have no interest in taking action when a project turns out to be misleading. Citizens do have an interest – a good living environment – ​​but they do not have a strong voice in this market.”