During Climate Week, YSE Lecturer Peter Boyd is teaming up with colleagues in academia and the United Nations to co-host a discussion on ways to encourage more buyers to purchase high-integrity forest carbon credits.
What will it take to make the world’s rainforests more valuable alive than dead? Peter Boyd, lecturer at the Yale School of the Environment and resident fellow at the Yale Center for Business and the Environment, and Daniel Ortega-Pacheco, former Ecuadorian minister of the environment and director of the Forest Carbon and Climate Program at Michigan State University, are hoping, if not to answer the question, then at least to kickstart the conservation into high gear. Specifically, they are looking at the potential of the voluntary carbon market to be an effective tool in mobilizing private capital — and philanthropy — save tropical forests.
Currently, there are three supply-side predominant approaches to using the voluntary carbon market to help advance tropical forest conservation and restoration: the project-based approach, which describes those that develop, sell, and advocate for standardizing methodologies supporting specific, defined forest projects; the jurisdictional approach, advocating for private, third-party standardization of methodologies across geographies and minimum area sizes; and the sovereign carbon or national-scale-only approach, which maintains that there is no need for additional standardization beyond the agreements under the United Nations Framework Convention on Climate Change (UNFCCC).
Boyd and Ortega-Pacheco both participated in a Yale Forest Forum speaker series, “How Can the Voluntary Carbon Market Make a Meaningful Contribution to Protecting Tropical Forests?” last year, and subsequently co-authored an article on the topic. Now, the pair, along with Gabriel Labbate, head of the climate mitigation unit at the UN Environment Programme, are co-hosting a discussion titled “Saving the World’s Forests,” in which they hope to bring advocates and representatives of the three major approaches together to discuss ways to improve communication and, ultimately, encourage more demand-side buyers to purchase high-integrity forest carbon credits. The discussion is part of the four-day series on scalable and transformative climate solutions hosted by Yale Planetary Solutions during Climate Week NYC.
“The goal of our discussion is to improve understanding and communication across stakeholder views, and subsequently, to encourage buyers of forest carbon credits to purchase without fear of backlash for buying the ‘wrong’ credit,’” Boyd said. “Ultimately, the goal really is to help make the world’s rainforests more valuable alive than dead.”
The world’s forests, particularly tropical forests, act as a sink, draining heat-trapping carbon dioxide from the atmosphere. However, unsustainable agriculture, logging, mining, urban expansion and the effects of climate change are turning tropical forests from sinks to carbon sources, and while the world's largest tropical forest, the Amazon, remains a net carbon sink, it is teetering on the edge of becoming a net source due to human-induced emissions and rising temperatures. In 2023, the world lost the equivalent of almost 10 football (soccer) fields of tropical forest per minute. This loss, while it represents a 9% decrease from 2022, produced 2.4 gigatonnes (Gt) of carbon dioxide emissions, equivalent to almost half the annual fossil fuel emissions of the U.S.
While Boyd and Ortega-Pacheco are quick to acknowledge that the voluntary carbon market alone is certainly not enough to save the world’s tropical forests, they also note that “all modeled pathways that fulfill the net-zero emissions by 2050 goal of the Paris Agreement require a minimum 70% reduction, or complete halt and reversal, and tropical deforestation by 2030.”
“Any of the three approaches have their pluses and their minuses,” said Brad Gentry, F. K. Weyerhaeuser Professor in the Practice of Forest Resources Management and Policy at YSE who helped facilitate the speaker series on voluntary carbon market and protecting tropical forests. “Given that there are alternatives to forest carbon, the uncertainty around the markets would certainly cause people who are investing in credits to think about going elsewhere. And that's the sad part, because particularly if you're trying to keep forests as forests, we need to be investing in them now.”
Universities can be involved and arbitrate some of the science, some of the information, and provide transparent evidence-based opinions, which can provide external validity that is really needed in the market.”
While there is no doubt there’s uncertainty in the market that’s been leaving potential buyers from consumer brands to institutional investors on the sidelines, Boyd and Ortega-Pacheco contend there’s much that advocates and representatives of the three approaches can do to help coax buyers off the sidelines and into the market. Namely, to stop criticizing each other or to go from, as they put it, “flipping the focus from (their own) incredible strengths and the debilitating weaknesses of the others” to communicating more consistently as an industry or wider movement in the short term and maybe even collaborating in a more organized way further down the line.
So, how to start?
“I think if we focus on the integrity component of it, we may be able to find common ground,” Ortega-Pacheco said. “I like the analogy that it takes a community to raise a child. To deliver the integrity the public deserves, I think we need everybody on board to share that responsibility, to build that integrity ecosystem, so that the finance can be scaled up.”
The issue of integrity, Labbate agrees, is one of a couple of challenges confronting the voluntary carbon market today — at least when it comes to nature-based solutions such as tropical forest protection and restoration.
“The other part of the equation involves what companies can reasonably do with carbon credits. Can they state, for example, that they bought credits and are now carbon neutral or that they are compensating their emissions on the pathway to net zero?” he said “That conversation has been quite difficult, but I would say it’s coming to a consensus. At least with Scope 3 emissions, I believe we’ll come to some sort of conclusion by the end of 2025.”
Ortega-Pacheco added that he likes to describe the progression of the voluntary carbon market for forest carbon credits as “voluntary carbon market 1.0,” which was about offsetting, and now we are entering the “voluntary carbon market 2.0, which is about climate action beyond value change and offsetting.
“I think there is a myth about the offsetting and greenwashing, and I think that the public is right,” he said. “Voluntary carbon market 2.0 is no longer about co-benefits, but about core benefits. Essentially, it is linked to the notion of impact investment. You measure the tons of carbon dioxide that are either sequestered or emissions that are reduced, and, at the same time, you need to measure your impacts on the community, whether that is employment or increasing economic well-being or an increased level of protection of different species. And, if for some reason you happen to have a negative contribution, you need to disclose that, too, because otherwise transparency is being affected.”
Academic researchers, NGOs, and public interest groups that provide independent data and verification can play a much bigger role in collaborating on quality ratings, measurements, and helping to ensure that market transparency, Boyd and Ortega-Pacheco argue, noting that it could help address the concerns of those seeking to advance tropical forest conservation, climate action, as well as those advocating for the rights and interests of Indigenous peoples.
Sara Kuebbing, YSE research scientist and director of the Yale Applied Science Synthesis Program (YASSP), who also facilitated the speaker series on the voluntary carbon market and protecting tropical forests, said the rapidly changing nature of the landscape requires an almost unprecedented scope of expertise and data validation.
“I think this is a key role that Yale researchers, faculty, and staff can play in increasing transparency and integrity to markets,” Kuebbing said. “Universities can be involved and arbitrate some of the science, some of the information, and provide transparent evidence-based opinions, which can provide external validity that is really needed in the market.”
