How can forest-dependent communities earn revenue for fighting climate change? Demystifying the wonky wonders of the carbon market.
Conserving forests is central to the Rainforest Alliance mission because we understand the urgent need to harness the incredible CO2-sequestering power of trees: Forests suck up CO2 and other greenhouse gas emissions (GHGs) that not only pollute the air we breathe but also cause climate change. If we want to rebalance the Earth, defending forests is a no-brainer.
One of the many ways the Rainforest Alliance does this is by auditing forestry and agroforestry projects in which landowners, forest communities, or farmers plant trees on recently degraded land (reforestation), plant trees where forests are long gone (afforestation), and/or protect standing forests from being destroyed.
Projects that meet international standards and criteria become eligible to sell CO2 “credits” (also known as “offsets”). Companies can then purchase these credits to offset their GHG emissions—either to meet mandatory pollution caps or to live up to their corporate social responsibility commitments. The sale of the credits typically directly benefit the communities implementing the project, providing an economic incentive to forest and farming communities to reforest or keep forests standing.
But how can a company know that the community is reforesting or protecting its forest as it claims to be doing? How does the amount of CO2 sequestered by the trees in these community projects get measured? How are these credits accounted for?
There’s an established—and complex—procedure to determine all that. The first step for any forest project is to get validated: an accredited auditor evaluates the project’s design against an applicable standard (the Rainforest Alliance is accredited to validate against six of the world’s most rigorous international standards). This evaluation ensures that the project meets the criteria of the standard and is likely to succeed in its aim to avoid or reduce emissions compared with the existing scenario. Achieving validation is essentially an endorsement that the project has a sound design.
It takes a lot of work, time, and money to achieve validation. Projects can be funded in a variety of ways, including corporate or philanthropic support, private investment, or institutional funding, as well as revenue from the sales of CO2 offsets once the project is verified. Once the baseline has been determined, the amount of actual emissions reduced or avoided is regularly measured against the business-as-usual (baseline) scenario, and the difference between the two (the credits) are sold on one or more of the world's voluntary carbon markets. These markets are a practical means for companies and individuals to offset their emissions to meet their climate goals and corporate social responsibility commitments. (In some cases, the Rainforest Alliance does provide training and assistance to forest and farming communities to prepare for validation—but in order to avoid a conflict of interest, we never validate or verify projects for which we have conducted training.)
This measuring, or "monitoring," which is done through forest inventories or satellite images that show change in forests over a set period of reporting, leads to verification. Verification by a third-party auditor provides unbiased confidence to purchasers that the credits they’re buying really do represent emissions reduced or avoided. When a project sells credits, it is essentially giving monetary value to the ecosystem service it provides by protecting and fortifying forests. This revenue mitigates the economic pressures on farming and forest communities to clear forests for other money-making ventures, like crop expansion and animal grazing.
The Rainforest Alliance recently conducted an audit of a reforestation project in East Timor for Gold Standard initial certification audits. Supported by Australia’s Xpand foundation and WithOneSeed program, the project is the first of its kind in East Timor, which, prior to gaining independence in 2002, suffered a brutal occupation that decimated lives, livelihoods, and natural resources.
Most of the 400 subsistence farmers involved in this project, located in East Timor’s Baguia region, live on about one dollar per day, amid a drought that is projected to worsen, high groundwater vulnerability, and an unsustainable dependence on unprotected water sources. Reforestation will help reduce runoff and overflows, as well as retain subterranean water.
Our auditors met with participating farmers and community members and inspected planting sites and seedling nurseries on their visit. The audit report was finalized in the spring, and validation is imminent. Soon, the farmers in the Baguia project will be able to boost their incomes by selling carbon credits.
In Sierra Leone, the Gola Rainforest REDD Project offers an example of forest protection efforts that have resulted in payment for carbon credits. Prior to this project, there was one national park in Sierra Leone, but in the wake of the civil war that ended in 2002, the government was left without resources to defend the park’s perimeter and forest loss resulted. The Gola project led to the creation of the Gola Rainforest National Park, the second national park in the country—but the first whose borders are effectively enforced.
In addition to conserving more than 68,000 hectares (or about 1.5 times the size of Redwood National Park in California, and 3.5 times the size of Acadia National Park in Maine) of pristine sub-Saharan tropical rainforest—home to pygmy hippos, forest elephants, ungulates, and other iconic species—the project also supports the livelihoods of 122 “forest-edge communities”, approximately 24,000 people who live close to the park’s boundaries.
This project was verified to two different standards—Verified Carbon Standard, which focuses on sequestering CO2, and Climate, Community, and Biodiversity (CCB) standard, which focuses on positive social and biodiversity impacts, such as improved livelihoods (by way of, for example, crop intensification), education, and worker rights. The Rainforest Alliance both validated and verified this project and the communities of the Gola Rainforest REDD project have already received payments for their efforts to protect the forest.
All of the standards used by the Rainforest Alliance, whether we are providing technical assistance or conducting certification audit, are designed to create revenue for forest and farming communities in exchange for the vital ecosystem “services” they are providing: the defense of standing forests and the regeneration of degraded land.