Abstract
Voluntary markets transacted over $66 million USD of forest carbon offsets in 2016, according to Forest Trends, and over 99% of those offset projects were audited to a standard, primarily the Verified Carbon Standard (VCS). We provide a table characterizing all 70 validated and verified forest carbon projects employing the VCS version 3.0 currently-in-use (December 2011–July 2017). We also examine two separate aspects of the audit process––impact and thoroughness––to assess the effectiveness of the costly audit process, which can consume up to one-third of offset revenue. Audit impact we measure in terms of reduction in the number of offsets from ex ante estimated to ex post approved. Audit thoroughness we measure both directly in terms of the number of auditor hours worked per project and also indirectly in terms of the total number of Corrective Action Requests (CARs)/Non-Conformity Reports (NCRs) auditors prescribe. In terms of impact, we find that Afforestation/Reforestation/Restoration (A/R/R) and Improved Forest Management (IFM) projects, though only constituting 5% of total verified offsets, demonstrate significant (p<=0.05) reductions from ex ante estimated to ex post approved offsets, likely because auditors can easily scrutinize carbon stocks/emission factors for the commercial tree species involved in these project types. In terms of thoroughness, we find that higher ex ante estimates correlate with more total auditor hours worked and total CARs/NCRs prescribed for three of four project activity types, likely because auditors perceive larger ex ante projects as higher risk. We conclude with recommendations for the VCS to empower auditors to scrutinize carbon stocks/emissions factors from avoided deforestation projects, and also to continue to flag high ex ante projects as higher risk.
Highlights
Forest emissions constituted approximately 10–15% of the 52 gigatons of greenhouse gases emitted (in carbon dioxide equivalents (CO2e)) from anthropogenic sources in 2015 (UNEP, 2016), with the lower 10% estimate including only deforestation net regrowth and the upper 15% estimate including emissions from degradation and drained peat soil (Pearson et al, 2017). In response to these emissions from the forestry sector, the United Nations Framework Convention on Climate Change (UNFCCC) Paris Agreement of 2015 states: “Parties are encouraged to take action to implement and support...activities relating to Reducing Emissions from Deforestation and forest Degradation, [plus] the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks (REDD + ).”
We focus on the Verified Carbon Standard (VCS) because: (1) the VCS is applicable, through specific methodologies,2 to the entire range of REDD+ project types, making it the most widely used standard in more than two-thirds of voluntary forest carbon offsets by total transacted volume (Goldstein, 2016); (2) the VCS, among all global standards, involves the most comprehensive (Merger et al, 2011) and the most conservative (Galik et al, 2009) calculation of forest carbon offsets; and (3) the VCS does not employ a pre-validation/pre-verification assessment by standards personnel, so publicly available VCS audit reports contain all findings
Verification report findings suggest that the downward adjustments were directly due to the audit process: Alto Huayabamba Corrective Action Requests (CARs)/Non-Conformity Reports (NCRs) involved an adjustment downward for a smaller planted project area, an exclusion of trees less than 1.3 m tall erroneously included, and the replacement of a more conservative allometric biomass equation for the appropriate climate zone (moist (> 2000 mm/yr) instead of wet (> 4000 mm/yr)); El Arriero CARs/NCRs involved a more conservative calculation for soil carbon based on an updated methodology version; and Reforestation in Ghana CARs/NCRs involved corrections of errors identified in plot remeasurement, as well as a cap on the maximum number of offsets based on the long-term project average including planned harvests
Summary
Forest emissions constituted approximately 10–15% of the 52 gigatons of greenhouse gases emitted (in carbon dioxide equivalents (CO2e)) from anthropogenic sources in 2015 (UNEP, 2016), with the lower 10% estimate including only deforestation net regrowth and the upper 15% estimate including emissions from degradation and drained peat soil (Pearson et al, 2017). VM0015: Avoided Tropical brushlands & mixed MJUMITA & Tanzania Forest unplanned deciduous angiosperm forests, Conservation Group (financial deforestation including Baobab trees proponents & technical developers); Ten village assemblies & councils (local implementers); SCS (auditor) 15 Feb. 2013 (validation); 10 Nov. Tropical mixed evergreen & Biofilica Invetimentos Ambientais semi-deciduous angiosperm (financial proponent & technical forests developer); ASMOREX (local implementer); RA/IMAFLORA
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