Title : Impact of voluntary carbon markets on REDD+ projects globally
Abstract:
Although voluntary carbon markets have given REDD+ projects—which are essential for forest conservation—a sizable new source of money, they have also sparked questions about their integrity and quality. Although over-crediting, dubious results, and a "race to the bottom" are problems, the markets have fueled an increase in the number of REDD+ projects, providing cash that can support climate goals and forest protection. As market standards and integrity initiatives change to address these issues, recent trends indicate an increase in buyer desire for better, more reliable credits.
Positive impacts:
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Increased support for forest conservation: REDD+ programs receive funding from voluntary markets, which gives governments and communities that live near forests financial incentives to preserve forests.
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Market-driven growth: Projects that prevent unexpected deforestation and initiatives that address planned deforestation have grown significantly in the voluntary carbon market.
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Institutional development: In order to help projects fulfill higher standards and possibly open the door for these credits to enter compliance markets, revenue can be utilized in the short term to establish institutions for monitoring and reporting.
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Increasing private investment in REDD+: Market-based tools can be used to leverage public money.
Negative impacts and challenges:
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Quality issues: Research has shown that a large portion of REDD+ credits are "phantom credits," meaning they do not accurately reflect actual reductions in emissions. There is substantial discussion and data that suggests many REDD+ credits lack integrity.
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Race to the bottom: The main objective of attaining true climate mitigation may be undermined by an incentive structure where developers are rewarded for producing more credits while consumers seek out the cheapest (often lowest quality) credits.
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Questionable results: Concerns regarding the true effects of CO2 reduction have been raised by claims of inadequate governance and weak verification, which have coincided with the quick growth of some initiatives.
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Risk of greenwashing: Businesses may leverage a sizable market with dubious credits to postpone taking significant climate action and declare themselves "net-zero" without having enough of an impact.
