- The newly released Tropical Forest Credit Integrity (TFCI) guide aims to assist businesses in making more informed purchases of tropical forest credits, which is one strategy for reducing greenhouse gas emissions.
- Carbon credits for tropical forests allow businesses to offset their carbon emissions by paying for forest conservation.
- According to the guide, businesses should ensure that they are purchasing high-quality credits that contribute to real-world reductions in deforestation in tropical forests.
- It also encourages them to be open about their carbon credit purchases and to build trusting relationships with local and Indigenous communities.
A new guide published in May is helping companies make smarter decisions about purchasing tropical forest credits, a strategy for offsetting greenhouse gas emissions, slowing deforestation and mitigating climate change.
The Tropical Forest Credit Integrity (TFCI) guide provides support for companies seeking to purchase high-quality carbon credits, which will bring them closer to decarbonizing their operations and ultimately to limiting global warming to 1.5° Celsius (2.7° Fahrenheit).
“Living ecosystems are critical carbon stocks and if we lose them, they cannot be recovered in the timeframe needed to tackle climate change,” said Angela Churie Kallhauge, head of impact at the Environmental Defense Fund, the organization that co-authored the report. “We know companies want to invest in tropical forest protection and have the resources to do it — but it can be hard for them to navigate the large, complex carbon credit marketplace.”
The other report authors include some of the world’s largest conservation organizations, including Conservation International, The Nature Conservancy, the Wildlife Conservation Society, World Resources Institute, WWF, IPAM Amazônia, and Coordinator of Indigenous Organizations of the Amazon Basin (COICA).
The Bezos Earth Fund, Amazon.com founder Jeff Bezos’ $10 billion initiative to support climate change researchers, activists, and non-governmental organizations, funded the project.
Carbon credits enable companies, typically in developed countries, to offset their carbon emissions by paying for forest conservation in developing countries. In general, one credit equals one metric ton of greenhouse gas emissions.
The voluntary carbon credit market has grown rapidly in recent years, reaching $1 billion in value in 2021, with a future market value of around $30 billion predicted.
However, some conservationists have criticized the market for allowing companies to continue emitting greenhouse gases, and it has even been referred to as a “license” to pollute. However, the credits also buy time for businesses looking for long-term alternatives to excess carbon emissions.
According to the new guide, as long as credits are created, purchased, and traded, there should be a strong set of recommendations available for companies seeking best practices.
“We agree that guidance for companies choosing to make such purchases is urgently needed in light of the urgency to conserve tropical forests and the rapidly increasing demand for tropical forest carbon emissions reductions and removals credits,” it says.
Major recommendations
The guide encourages businesses to purchase tropical forest carbon credits to supplement, rather than replace, other emissions-reduction strategies. This means that, in addition to purchasing carbon credits, businesses should take other bold steps to decarbonize their operations, according to the guide.
According to the report, the creation of carbon credits should also prioritize the rights of Indigenous and local communities, as well as women and other underserved groups, particularly when it comes to access to land, water, and traditional knowledge practices. According to the guide, the best way to accomplish this is to treat these groups as partners or shareholders, rather than just beneficiaries.
According to the guide, businesses should take “a genuinely collaborative and intercultural approach that values diverse cultural practices and ensures full and effective participation on equal terms throughout the process… and with special emphasis on the equitable distribution of benefits.”
Another way to ensure this is to foster a culture of transparency. Companies should publicly report their use of carbon credits and specify the country in which the credit activity occurs. They should also specify how and if the credits count toward a host country’s “nationally determined contributions,” a key component of the Paris Agreement that calculates each country’s total contribution to emissions reductions.
“It’s critical that companies are transparent about their investments and credits, how they count and claim them,” Lloyd Gamble, WWF’s senior director of forests and climate, told Mongabay.
It is possible to buy “removal credits” generated by tree-planting efforts, which have been shown to be less effective carbon sinks than preserving old-growth forests. Instead, businesses should ensure that they are purchasing high-quality credits that contribute to real-world reductions in deforestation in tropical forests, according to the guide.
The transition to “jurisdiction-scale programs,” in which credits are granted at the state, province, or even national level, rather than project by project, is perhaps the most important recommendation, according to Gamble. According to the guide, if companies can quickly transition to these types of purchases, forest protections can be established on a scale of millions of hectares rather than thousands, allowing carbon credits to contribute to conservation efforts on a much larger scale.
“It’s critical that [companies’] accounting and planning support transformational activity and transformational change, not just little green islands of national parks or localized activities that may have short-term effects,” Gamble said.
