The Problem with Carbon Certification: A Look at REDD+
Carbon certification is an important tool for establishing the value and credibility of offset products to reduce the climate impact of businesses and individuals. However, not all certifications are created equal, and a recent article in The Guardian has shed light on the problems with one certification in particular: REDD+.
The Guardian claims that the world's largest supplier of rainforest-based carbon offsetting, Verra, has been misselling its services, with 94% of carbon credits the company has sold capturing zero carbon. Verra operates as a third-party auditor, assessing the amount of carbon captured by protected rainforests and issuing credits that companies can buy to offset their emissions. The Guardian conducted a joint investigation with two other organizations and found that the threat to forests was overstated by 400% and only a few Verra projects showed evidence of deforestation reductions. However, the findings of the investigation have been criticized for not taking into account the difficulty in accurately predicting deforestation rates. The two studies used to estimate the deforestation rates came up with different figures, which raises questions about the accuracy of either study. One study used a reference area, which is similar to the protected area of rainforest, but can never be an accurate analogue. The other study estimated deforestation rates through synthetic controls, but did not account for local situations that can impact deforestation rates.
REDD+ is a forestry standard that is designed to generate carbon offsets and certify that reforestation projects are having the desired impact. The Guardian article points to a larger issue with carbon certifications: they rely heavily on trust. If the underlying carbon accounting and certification process is not trustworthy, then the products produced through it will be subpar and will not have the intended impact.
The solution to this problem is increased transparency and ensuring that the products being created are of high quality and that the certifications being used are working as intended. Assessment methodologies must be appropriate to the project and baselines established correctly. REDD+ is not inherently flawed, but it is important to ensure that the products produced under this standard are actually produced to that standard.
At Nomica, we are working to address this problem by tokenizing the actual actions happening on the ground and incorporating auditable metadata for full transparency. This allows us to verify that the products produced, whether under the REDD+ standard or any other standard, are of high quality and that the standards are being upheld. We are also working with a partner to double check our certifications and ensure that the products in our marketplace are of the highest quality and are actually helping the cause, rather than just acting as window dressing.
We invite you to engage with us to discuss how we can make the carbon certification space better together. Nomica is committed to creating high-quality, trustworthy carbon certifications to ensure that the impact of reforestation projects is truly positive.