Carbon project market leads with REDD methodology

The landmark approval of a carbon accounting methodology to underpin REDD projects in Asia shows the project-based voluntary carbon market leading the way in the development of mechanisms to halt the destruction of climate-critical tropical forests.

Last week, project proponents announced they had won the first approval for a project methodology under the Voluntary Carbon Standard for REDD activities, or reduced emissions from deforestation and degradation. The methodology for calculating carbon emissions savings from forest preservation will be applied to a project attacking deforestation on its frontline – conserving 100,000 hectares of peatland forest in the Rimba Raya Biodiversity Reserve in Indonesia’s Kalimantan province on the island of Borneo. Borneo along with neighbouring Sumatra, is also home to the threatened orang-utan, while the region has some of highest rates of deforestation worldwide.

The destruction of rainforest and the draining of forest peat swamps in the tropics is estimated responsible for 15 per cent of the world’s total human-induced greenhouse emissions – billions of tonnes of carbon dioxide (CO2) per year. The Rimba Raya project aims to prevent up to 75 million tonnes of CO2 emissions over 30 years by preventing rainforest being cleared for plantations.

While the approval of the methodology is a milestone, the first such carbon accounting plan for implementing REDD to achieve VCS double approval, the project upon which the methodology is based must itself yet be validated by third-party certifiers. Rimba Raya is also applying for certification under the Climate, Community and Biodiversity (CCB) Standard for the recognition of the environmental and social benefits beyond carbon savings that would flow from the project - namely protecting valuable orang-utan habitat and the livelihoods of local communities.

Project developers InfiniteEarth and Gazprom Marketing and Trading, the chief proponents of the Rimba Raya project, had plenty of support for the development of the methodology from a large number of stakeholders, private and public. These include the Clinton Foundation, Shell, Winrock International and Orangutan Foundation International. Under the VCS rules, new carbon offset project methodologies must undergo a dual approval process by two separate third-party certifiers, in this case Rainforest Alliance and Bureau Veritas.

The widespread buy-in for the methodology makes it and the project its designed for torchbearers for project-based REDD and REDD+. The resulting VCS methodology approval is an indication of the project-based carbon offset sector moving out in front in the development of worldwide REDD mechanisms targeting tropical deforestation. The methodology now approved is applicable to other conservation projects that avoid planned land-use conversion in tropical peat swamp forests in South-East Asia.

The UN, World Bank, EU, national governments and others are trying to develop a global REDD+ system based on large national and regional programmes with credits issued at the government level. But getting international agreement and working through the inherent bureaucracy attached to this high-level approach is proving a challenge. Norway and Indonesia have sought to cut through the multilateral impediments, announcing a bilateral agreement in May aimed at placing a moratorium on deforestation across Indonesia in return for a $1 billion funding grant from Oslo.

One of the big challenges facing the establishment of a global REDD mechanism is ensuring a credible system of monitoring, reporting and verification of emissions reductions, MRV in shorthand, across the national programmes of many developing countries.

This is just what approved methodologies such as the VCS example address, providing robust carbon accounting, albeit on a smaller scale. Other standards are developing REDD methodologies and project designs too. The American Carbon Registry is currently taking public comments on a methodology for avoiding planned deforestation that would underpin one type of international REDD project.

The CCB Standard has already validated the design of two REDD projects in a similar vein to Rimba Raya; the Ulu Masen forest preservation and orang-utan project in Sumatra’s Aceh province and the Juma sustainable development project in Brazil’s Amozonas state. However, these two projects and a string of other REDD projects in Indonesia and around the world still require a methodology such as the VCS’s to properly account for their carbon emissions savings in order to generate credits.

While the VCS certification for Rimba Raya would produce VER carbon credits for sale into the voluntary carbon market, there is also the possibility that such VCS credits could receive official recognition, and hence be tradable, under a future UN REDD scheme.