Hopetoun Falls, Australia 

What are carbon credits?

 

Forests are our greatest natural ally in the fight against climate change, yet in many places they are more valuable dead than alive.

Conservation International is working to flip the script by valuing the carbon that trees remove from the atmosphere and store in their trunks and soils. Through carbon projects, we help to protect the climate by protecting forests — and the people who depend on them. As one solution to the climate crisis, forest-carbon projects are helping humanity bend the climate curve.

 

What is a carbon credit?

A carbon credit represents a reduction of 1 metric ton in greenhouse gas emissions to compensate for 1 metric ton of emissions made somewhere else. A credit can be bought, sold or traded before it is “retired,” meaning it cannot be traded again, assuring that only the buyer can claim emissions cuts associated with that credit.

What carbon credits are not

  • A license to pollute: Carbon credits are a “bridge” for emitters working to reduce their emissions, not a pass for business as usual. In fact, companies that invest in nature-based credits are leaders, not laggards: Three recent studies found that companies that bought voluntary carbon credits did more across the board to cut emissions than companies that did not.
  • A silver bullet: Carbon projects alone will not solve climate change — they are a vital way to flatten the carbon curve while the world transitions away from fossil fuels.
  • Doomed by technical challenges: Carbon projects have been implemented in various forms for more than two decades, passing from the experimental to the commonplace thanks to testing and scientific advancements. Over the past several years, science and technology have advanced to ensure that carbon projects are having their intended benefits.
  • A ‘land grab’: High-quality carbon projects are necessarily built on the free, prior and informed consent of local communities in the project area. These projects do not separate people from their lands, but rather are predicated upon strengthening and upholding their rights to their lands. 

 

What is a ‘carbon project’?

The idea behind a forest carbon project: pay people to not cut down their forests and restore ecosystems through the sale of “carbon credits.” Governments, companies and individuals can buy and trade credits to supplement the cuts made to their emissions, with revenue going to local communities as an incentive to keep forests standing or restore them. The result: Credit buyers compensate for a portion of their carbon footprint, and forests survive to absorb climate-warming carbon from the atmosphere while supporting local communities. Our carbon projects » 

 

What are the benefits of carbon projects?

© Pete Oxford/iLCP

Wildlife

Forests are home to countless species that exist nowhere else — including many plant species that are critical to medicine, and pollinators crucial for agriculture.

 

© Trond Larsen

Water

Forests are powerhouses of the water cycle, contributing to rainfall, holding and filtering water — and providing flood control — for adjacent communities.

 

© Adrián Portugal

Food and jobs

Millions depend directly on the goods and services that forests provide, including those related to clean water, food security and jobs.

 

© Georgina Goodwin

Sustainable development

Revenue from carbon projects funds social, educational and health programs in forest communities, and support sustainable and economically resilient jobs for millions.

 

Requirements for carbon projects

To be considered high-quality and successful, carbon projects must meet stringent criteria, including: 

  • Additionality: Emissions cuts would not have occurred without the carbon project investment. 
  • Permanence: Emissions reductions or removals represented by a carbon credit must endure for the long term. 
  • Leakage: Deforestation is not simply displaced from one area to another. 
  • Benefit-sharing: Beneficiary communities of carbon projects are equitably compensated.

 

How these requirements are being met

All forest carbon credits traded internationally are guided by United Nations requirements, including:

  • Baseline: A baseline against which deforestation, degradation, conservation and restoration are measured to ensure that emissions are being reduced or removed.
  • Monitoring: A monitoring system to measure forest-cover changes against the baseline to ensure additionality.
  • Safeguards: Adherence to social safeguards to ensure respect for Indigenous rights and the participation of local stakeholders, as well as environmental safeguards to mitigate the risk of forest loss.

 

What is ‘REDD+?’

Some carbon projects are designed under a framework called REDD+ — Reducing Emissions from Deforestation and forest Degradation — a UN-backed policy and incentives framework that enables countries to protect forests to achieve the emissions cuts required by the UN and the Paris Agreement. Read more about REDD+ »

 

Principles for Investments in Natural Climate Solutions

Nature is one of the most effective ways to stop climate breakdown, yet natural climate solutions receive less than 3 percent of all global climate funding. Conservation International’s Principles for Investments in Natural Climate Solutions guide our engagement with companies that are helping to protect ecosystems that store climate-warming carbon and keep it from the atmosphere. Read our six principles »

 

From our blog

What drives deforestation — and how can we stop it?

© Flavio Forner

This summer, dangerous heatwaves have shattered records around the world. The extreme temperatures would be “virtually impossible” without human-caused climate change, according to an ever-growing body of research.

As countries struggle to respond to the sweltering weather, a new study provides the largest and most comprehensive review yet of how to stop deforestation — a major cause of climate-warming greenhouse gases, second only to fossil fuel emissions. Led by Conservation International climate economics expert Jonah Busch, the research distills findings from 320 peer-reviewed studies that focus on what’s accelerating deforestation and how to prevent it.

With international efforts to conserve nature and fight climate change gaining ground, Busch said he hopes the study’s findings serve as a roadmap for protecting forests, “one of our best allies in reducing emissions and cooling a rapidly warming planet.”

“World leaders have committed to fight climate change by halting and reversing deforestation by 2030,” he added. “This new study can help guide policies and investment toward actions that support those goals — and away from those that don’t.”

What slows deforestation

Of all the methods proven to prevent deforestation, protected areas — such as national parks, wilderness preserves and other places set aside to conserve nature — are most effective at reducing deforestation, the study found.

“Protected areas are a tried-and-true way of conserving nature and curbing the climate crisis,” Busch said. "However, not all protected areas are created equal — their location is key. To really help mitigate climate change, protected areas must be in the right places.”

Currently, about 17 percent of the planet’s lands are conserved, but many of those protected areas are in remote locations, where the threat of deforestation is relatively low. As countries ramp up efforts to protect 30 percent of lands — something scientists and conservationists say is needed to stem biodiversity loss and climate change — new protected areas should be created in places where deforestation is more likely to occur in the first place.

That means areas with higher populations and greater proximity to cities and roads, according to the study. Understanding these drivers of deforestation can help guide where new protected areas are established — and ensure they have a greater impact on protecting nature and the climate, Busch said.


Further reading: Protected forests are a climate powerhouse


Additionally, the study found that deforestation rates in Indigenous territories or lands managed by Indigenous peoples are consistently low, either due to traditional land-management practices that favor forests, or because Indigenous lands tend to be in remote areas and less likely to be converted to agriculture, Busch said.

In 2017, Busch and his colleagues published an analysis of deforestation using studies available at the time. In the six years since, the amount of research demonstrating that Indigenous managed lands prevent deforestation has more than doubled — providing the strongest evidence yet that upholding Indigenous land rights and officially recognizing Indigenous territories is key to reducing deforestation.

“The trickle of evidence has become a flood,” he said. “Indigenous management undoubtedly slows deforestation.”

The trickle of evidence has become a flood. Indigenous management undoubtedly slows deforestation.

Jonah Busch, Conservation International Climate Economics Expert

Protecting land rights enables Indigenous communities to practice their own systems of resource management, which in turn helps to protect lands and water — and support global conservation goals. Notably, late last year the Kunming-Montreal Global Biodiversity Framework, an agreement signed by nearly 200 countries to protect nature, formally recognized the rights and contributions of Indigenous peoples.


Further reading: To achieve global conservation goals, secure Indigenous rights


Other successful approaches to preventing deforestation are based on creating financial incentives for communities to keep forests intact — for example, by valuing the carbon that trees remove from the atmosphere and store in their trunks and soils. The study found that providing benefits to communities that keep their trees standing lowers deforestation rates.

For example, revenues from the sale of carbon credits can generate much-needed investments in local communities — such as improving health services, funding scholarships or supporting new job opportunities. In Kenya’s Chyulu Hills region — where forests have been decimated by slash-and-burn agriculture and charcoal burning for fuelwood — Conservation International and partners launched a carbon project that is helping to conserve and restore 404,000 hectares (1 million acres) of land, secure new livelihoods for the local community and prevent the release of around 30 million metric tons of carbon emissions.

Additionally, the study found that commodity certification programs, which allow farmers to sell coffee, palm oil or other products at a higher price in return for protecting trees, are also connected to lower rates of deforestation — as are companies’ commitments to ending deforestation in their supply chains.

What accelerates deforestation

What’s the main driver of deforestation in the tropics? In a word: Agriculture. It’s responsible for 90 percent of all tropical deforestation, which roughly amounts to 9 million hectares (22 million acres) of forest destroyed annually — the equivalent of more than 8 million soccer fields.

Why is agriculture so damaging to forests? It comes down to economic incentives, Busch said.

“Land is valuable and scarce,” he said. “The economic value of cutting down forests for growing crops is consistently well-reflected in global markets — in short, it’s a moneymaker. But despite the huge benefits trees provide in terms of clean water, the ability to store climate-warming carbon and so much more, global markets don’t value standing forests in the same way.”

Finally, there were other drivers of deforestation that surprised Busch, either because they’d never before been identified in a peer-reviewed paper, or because they went against conventional wisdom.

For example, Busch pointed to a persistent myth that poverty drives people to deforest their lands to grow crops and meet basic needs. However, again and again evidence shows that poverty doesn’t cause deforestation — wealth does, he said.

“The more resources people or companies have, the more access they have to the equipment and labor needed to clear forests — and the easier they can secure credit to clear large tracts of land,” Busch said.

The study is also the first to identify a connection between higher temperatures and more deforestation. That’s perhaps because warmer and drier conditions make forests more susceptible to fire, which is responsible for most deforestation in many parts of the world, Busch said. This finding suggests that increased deforestation may be yet another unwelcome consequence of global warming.

Ultimately, climate change is making forests both more vital and more vulnerable. It’s a vicious circle: deforestation is driving climate change — and it’s also fueled by it.

“This summer’s record-breaking heat is a stark reminder that climate change is happening now,” Busch said. “Forests are one of our best defenses against climate change — but only if they’re left standing.”


Further reading:


Mary Kate McCoy is a staff writer at Conservation International. Want to read more stories like this? Sign up for email updates. Also, please consider supporting our critical work.