Understanding REDD+ Credits

Climate change is a global issue that requires a variety of solutions, both nature-based and engineered. One nature-based initiative that aims to address this challenge is known as Reducing Emissions from Deforestation and Forest Degradation (REDD+). In this article, we will explore what REDD+ is, how it works, its benefits and challenges, and its potential impact on climate change mitigation.

Understanding REDD+

REDD+ is a framework endorsed by the United Nations that aims to combat climate change by preventing the destruction of forests. Forests play a crucial role in mitigating climate change as they absorb and store carbon dioxide, a primary greenhouse gas. When forests are cut down or degraded, they release significant amounts of carbon into the atmosphere, contributing to global warming.

REDD+ advocates often cite a range of benefits beyond climate change mitigation. By preventing deforestation and forest degradation, supporters argue that these projects conserve water resources, reduce the risk of flooding, control soil erosion, protect biodiversity, and preserve cultural heritage. The environmental and social impacts of these projects beyond their carbon impact make REDD+ a compelling category for certain carbon credit buyers.

The Market for REDD+

REDD+ operates by helping project developers monetize the value of their forests through carbon sequestration and ecosystem services. The sale of REDD+ credits serves as a financial incentive to discourage deforestation, degradation, and unsustainable forest management practices. Countries and project developers operating REDD+ projects receive direct payments by selling carbon credits to companies looking to offset their carbon footprint and achieve net zero status. For example, the International Civil Aviation Organization (ICAO), responsible for governing airlines, is exploring the use of REDD+ as a means to reduce the emissions profile of their sector.

Challenges and the Way Forward

While REDD+ projects make up a significant portion of the voluntary credit market, there are still challenges to overcome. Last year, investigative reporting by The Guardian alleged that “more than 90% of rainforest carbon offsets by [Verra] are worthless,” due to improper selection of baselines used for evaluating project impact. Even beyond the improper selection of baselines, measuring the actual carbon removal amounts of REDD+ projects relies heavily on assumptions and averages rather than direct measurement of emissions impact. Concerns about the permanence of REDD+ projects are further common, as the projects usually operate in regions with poor rules of law and may be subject to future government intervention or uncooperative local partners.

Clear Rating: A Leading Provider of Carbon Credit Ratings

At Clear Rating, we account for the drawbacks of REDD+ credits when assessing these projects. Although there may be co-benefits such as preserving biodiversity and avoiding soil erosion, there are also significant concerns around measurement, permanence, and other risks. Currently, the market has a glut of nature-based projects, which combined with lower demand in the wake of REDD+ scandals has led to lower prices. The sector has broad limitations in measuring impact and lacks promising new technology solutions to address this.

When evaluating REDD+ projects, it is essential to have access to reliable information about carbon credits. Clear Rating, a reputable carbon credit rating agency, offers comprehensive and up-to-date information on carbon credit projects. Their educational article library provides valuable insights, including the informative article on Nature vs Engineered solutions, which is particularly relevant to REDD+ projects.