Verra welcomes the critical work of the Carbon Credit Quality Initiative (CCQI), and we are gratified this effort recognizes the huge step forward represented by our transformative new REDD methodology, VM0048 Reducing Emissions from Deforestation and Forest Degradation. It is indeed a “marked improvement” over earlier approaches which represented the best science of their time – but their time has passed.

Keeping forests standing, in the face of overwhelming global pressure to cut them down, is one of the great challenges of our time. We are pleased to take this opportunity to engage in a vigorous science and policy discussion about why our new approach was crafted the way it was. We stand behind some of the choices that CCQI flags as needing further refinement, and hope this assessment sparks the kind of vigorous discussion necessary on our collective journey toward impact.

It comes down to different visions for what this critical climate solution really is – and what it can be. Verra’s new REDD methodology is built to be a high-integrity path to keeping forests standing – in an imperfect world. It is a world without a mandatory global climate regulation, where national commitments are critical but will take hard work to achieve, where countries and the international community have moved forward with specific approaches for accounting and inventories, where deforestation rates can fluctuate dramatically based on political realignments – any meaningful approach to keeping forests standing must take all of this into account.

Notably, CCQI calls for changes to two key elements of Verra’s new REDD methodology that are its key features, not bugs:

  • Verra’s methodology was explicitly designed to ensure projects align and are consistent with the global accounting approaches. It uses a top-down, risk-based allocation approach that is consistent with the latest methods for national accounting and inventories recommended by the Intergovernmental Panel on Climate Change (IPCC), the UN-REDD Programme, the World Bank’s Forest Carbon Partnership Facility (FCPF), and others. Any path to protecting forests at scale must be able to align with host country reporting to the UNFCCC.
  • Verra’s methodology assumes it will take hard work, and investment, to reduce deforestation rates worldwide. The CCQI report claims that the approach used by the new methodology will lead to overestimation of emission reductions by asserting that countries are on a trajectory to reduce deforestation to zero, apparently without investment. Verra believes that this assumption is misguided and that there is no declining trend in deforestation without investment to deliver it. More, where there are (most welcome!) declining deforestation trends, the baseline will also become more conservative through the regular updates included in the methodology – as is consistent with national approaches.

Verra has also prepared a more detailed technical response below. We look forward to continuing this discussion with stakeholders across the voluntary carbon market. As Verra’s new methodology comes fully online and baselines are set for key jurisdictions this summer, we believe we have charted a critical path to unlocking impact at scale.

Technical Response

Verra welcomes the discussion and critique of all its methodologies. We have reviewed and commented on CCQI’s work over the past few months, and based on its findings we are now including additional improvements in the minor updates that we will soon implement to VMD055 Estimation of Emission Reductions from Avoiding Unplanned Deforestation, v1.0. VMD0055 is the module to be used along with VM0048 to account for greenhouse gas (GHG) emissions reductions from projects aiming to avoid unplanned deforestation.

However, we are concerned that CCQI has overlooked several fundamental concepts that underpin our methodologies. Two key claims by the authors deserve additional scrutiny:

Verra Response: As CCQI’s analysis shows, deforestation rates have increased or gone unabated in many developing countries. Moreover, as some recent authoritative reports (by the UN-REDD Programme and the Forest Declaration Assessment) have shown, the Nationally Determined Contributions (NDCs) from countries with the highest tropical deforestation rates are insufficient to halt deforestation by 2050. Only a few countries’ NDCs include explicit quantified targets to reduce deforestation, and all fall short of our global ambition to halt deforestation by 2050.

The CCQI report seems to assume that countries are on a trajectory to reduce deforestation to zero without investment. However, it is well documented that current finance for forest protection is less than 1% of what is needed to halt deforestation by 2050. There is no declining trend in deforestation without investment to deliver it. REDD projects provide one avenue for this needed finance and, critically, capacity building among governments and forest stakeholders.

The authors’ conclusion that historical average-based baselines lead to overestimating emission reductions is thus misguided. In fact, using historical averages to project deforestation is a conservative (in the long term) and practical approach. This method averages out short-term fluctuations and factors in declining deforestation through periodic baseline updates. Where deforestation rates are indeed declining, it will largely be a result of efforts undertaken by government action and REDD project interventions. Baselines will become more and more conservative as they are updated based on the decreasing averages that were delivered by these interventions (in other words, the declining trends are not “business as usual” or “without project scenarios” — rather they conservatively include the reductions delivered by government and project efforts).

Using historical average deforestation data is also standard practice for jurisdictional accounting and consistent with national approaches in this field; this approach is, therefore, a critical and intentional feature of the methodology.

Verra Response: VM0048 takes this uncertainty into account. First, it includes discount factors in the calculation of jurisdictional baselines, which by itself makes them conservative. Second, after the six-year baseline validity period (per the Verified Carbon Standard [VCS] Program requirements) is completed, the jurisdictional baseline is reassessed, taking changes in deforestation drivers into account.

The CCQI report emphasizes instances where the projects’ baselines are overestimated but dismisses the other — also likely — possibility that baselines are underestimated.

Verra is also exploring whether alternative approaches to accounting may be useful as a comparative impact assessment and encourages the sector to undertake research on this to ensure continued improvement while taking into account real-world constraints and the need for finance to flow to see progress to a zero-deforestation world.

Several additional claims also deserve scrutiny:

Verra Response: In Verra’s approach, the deforestation model and map are initially used to identify probable areas of deforestation in a given jurisdiction. Following this, the actual allocation of deforestation risk is based on the conservative estimate of jurisdictional deforestation (that is already discounted for uncertainty). Thus, the actual project allocations do take uncertainty into account and are conservative.

Verra Response: The report’s assumptions about the prevalence and degree of degradation that might occur in the project area (i.e., forests under protection) are not supported by any data. It is worth noting that the methodology requires emission factor estimates to be conservatively discounted for uncertainty.

Verra Response: The allegation that projects are primarily developed in areas with an expected low baseline deforestation rate is unfounded. In most cases, the baseline is not known before project development. Even where activity data maps are already available and baselines can reasonably be predicted, it does not mean that projects will be developed where deforestation risk is highest – significant elements such as stakeholder engagement and regulatory context must also be considered. Finally, baselines are reassessed on a regular basis, making what may be preferential site selection in one period a long-term risk.

It is highly unlikely that individuals with insider knowledge about potential planned conservation or other activities that would reduce deforestation risk would affect the accuracy of project baselines at a large scale.

Verra Response: VMD055 and other relevant methodological modules (e.g., VMD001) involve specific guidelines for selecting allometric equations, root-to-shoot, and carbon expansion factors. Those guidelines emphasize that selection must be justified and based on the availability (or lack) of data. Updates to VMD001 and other modules are underway that will help to strengthen these aspects. The study (Haya et al. 2023) cited by the authors to support much of their views has already been addressed by Verra; some of the issues it raises do not apply to VM0048.

The report’s issues with historical records and other key data ignore real-life conditions and limitations. As the report itself points out, and several academic studies have shown, estimating emissions from leakage is extremely challenging. VMD055 adopted various procedures and methodological approaches to try to estimate, in a practical manner, the likely major sources/components of leakage to incorporate them into the accounting of the net emission reductions achieved by each project. Nevertheless, the tools and procedures to estimate leakage in REDD projects are being reviewed and updated to improve these aspects.

Verra Response: Not accounting for international leakage is consistent with the approach taken by the CDM and most other GHG programs. Monitoring or implementing mitigation strategies in another country is not politically feasible; as agreed under the Paris Agreement, it is each country’s responsibility to address these issues.

Contact for media inquiries:

Joel Finkelstein, Senior Director, Media and Advocacy | 1-202-285-0113

# # #

Verra is a global leader helping to tackle the world’s most intractable environmental and social challenges. As a mission-driven nonprofit organization, Verra is committed to helping reduce greenhouse gas emissions, improve livelihoods and protect natural resources by working with the private and public sectors. We support climate action and sustainable development with standards, tools and programs that credibly, transparently and robustly assess environmental and social impacts and enable funding for sustaining and scaling up projects that verifiably deliver these benefits.