REDD: Why We Need It and How We Make It Work

Keeping forests standing is one of the most readily accessible and cost-effective ways to fight climate change. However, there are numerous economic incentives to cut down forests, e.g., mining and large-scale commercial agriculture, that are often more profitable endeavors than protecting standing forests.

The key then is to flip the equation and assign an economic value to the standing forests.

The REDD approach does just that. Under the umbrella of REDD, which stands for Reducing Emissions from Deforestation and Forest Degradation, projects or programs implement activities that protect forests from being cut down or degraded. For example, REDD projects may support farmers in transitioning to forest-friendly agricultural practices or establish forest patrols to fight both encroachment and wildfires.

The finance supporting these activities is enabled by the carbon market. Using robust accounting methodologies, REDD projects can quantify the emission reductions they achieve by keeping forests standing, earn carbon credits that represent these emission reductions, and sell the credits on the carbon market. With the finance generated from the sale of carbon credits, projects can sustain and scale their operations—and even deliver essential funding for community priorities such as building schools and health clinics.

Verra’s Verified Carbon Standard (VCS) Program is one of the leading greenhouse gas crediting programs that has credible and rigorous REDD methodologies and registers REDD projects. Currently, 120 REDD projects are registered in the VCS Program, and a further 207 projects are under development. Together, these projects have to date reduced 458 tonnes of emissions in the atmosphere. That is the equivalent of over 106 million gas-powered vehicles driven for a year.

REDD projects depend on the finance they receive from the sale of carbon credits, which represent the emission reductions these projects achieve. Therefore, a robust and credible methodology is essential for calculating these emission reductions.

In late 2023, Verra launched a new consolidated REDD methodology, VM0048 Reducing Emissions from Deforestation and Forest Degradation, and the associated module VMD0055 Estimation of Emission Reductions from Avoiding Unplanned Deforestation. Both VM0048 and VMD0055 are based on decades of experience and were developed through a rigorous process that included extensive expert input and stakeholder consultation.

A distinct feature of this transformative methodology is its radically new approach to baseline setting. Baseline setting is an essential step in the certification of REDD projects as it forms the basis for calculating the emission reductions that a project achieves. The baseline represents the level of deforestation expected in the project area if no project is implemented. After project activities have been implemented, the deforestation rate that actually occurred in the project area is compared to the expected deforestation rate. This is how we can determine the deforestation the project was able to avoid and how many emissions the project prevented—and, therefore, how many credits the project should receive.

Previously, project proponents set the baseline for their projects by observing the historical deforestation in a region that shared key characteristics with the project area. Under Verra’s new REDD methodology, Verra leads the baseline setting process to ensure consistency and transparency. The new approach is based on a careful assessment of historical jurisdictional deforestation and projected deforestation risk in the project area. It utilizes data sourced from expert service providers, following a detailed process using remotely sensed data, ground observation, image interpretation, and risk modeling.

Let’s take a closer look at how the calculation of carbon credits under Verra’s new REDD methodology works. It’s a bit complicated, but it is important to get it right. And to get it right, we have to be thorough and diligent.

In a nutshell, to enable baseline setting in REDD projects using VM0048, Verra will spatially allocate unplanned deforestation activity data to projects throughout a jurisdiction based on a project’s deforestation risk.

Too much jargon? Let’s break it down a bit.

1. 1. As a first step, a data service provider collects data about the historical deforestation in a jurisdiction over the previous 10 years and generates forest cover benchmark maps (FCBMs) for three points in the previous 10 years, the beginning, mid-point, and end to ascertain forest cover change.
   2. Next, jurisdictional deforestation risk maps are developed. They are derived from the FCBMs and spatial predictors that forecast deforestation risk for forested areas of a jurisdiction for the following six years (baseline validity period).
   3. Then, the total amount of deforestation predicted by the risk map is spatially allocated throughout the jurisdiction based on the relative risk of deforestation in each pixel, resulting in a jurisdictional map of allocated risk.

To calculate baseline emissions, proponents acquire from Verra the portion of the jurisdictional risk map that defines the projected deforestation for their project area; they will also obtain information about applicable leakage areas and apply project-specific emission factors.

Because this is a complex process and involves the acquisition of data, Verra publishes provisional lower-resolution (1 ha) versions of the allocated deforestation risk maps (open-access data) for entire jurisdictions. The provisional maps are pending a final review by independent third parties to ensure they meet Verra’s stringent requirements as outlined in VMD0055, but project proponents can use them to conduct due diligence and estimate how many carbon credits they are able to receive if they develop a REDD project.

To complete project registration, proponents must acquire VMD0055-compliant allocated deforestation risk maps and the risk-allocated project baseline activity data (VMD0055-compliant data) for their project area. These data are derived from a higher-resolution version of the allocated deforestation risk map for that jurisdiction. Final lower resolution open-access data will be available when the final VMD0055-compliant data is published.

More information about when open-access and VMD0055-compliant data is available can be found on the Allocated Deforestation Risk Maps: Timetable page.