New bilingual website
Fresh from our Summer break, our website has a refreshed look and – more importantly – it is now published in English and German. Reflecting our increased focus and public outreach in Switzerland, where we are based, our content will be predominantly bilingual from now on. Our newsletter will also be translated in both languages and some of the links we include in these might lead to either Swiss or German-speaking sources. Posts via Facebook or Instagram might be more targeted and in one language only.
If you want to share your feedback, tips or stories, you can e-mail us or use our online Contact/Your Voice form.
More hands-on activities in Switzerland
In 2022, we increased our focus in Switzerland and the type of activities we wanted to develop. So far, our public events have provided a great platform to inform people and create interest in our project partners and topics, with more than 6’000 people directly involved up to now.
However, we also want to create opportunities for direct hands-on engagement here in Switzerland, linked to practical “greening” and restoration efforts both within and outside urban areas. Many localities are already increasing their work in public spaces, which is good, but it is clear that private spaces have to be included in these efforts too. In many cases, the interest from public and private entities is present and aligned, but there is a lack of adequate information, support in defining good options, or – sometimes – simply someone to assist with the manual labour.
As such, we launched Make it greener, a project that brings together property owners (or managers) and people who want to plant or support such actions. This coming November, we will have our 3rd planting action under this project. Nearly 100 native trees and bushes will be planted together with the employees from a local company, in a 2ha area near Zurich to extend a biological corridor and an area of regenerative agriculture.
We are looking for other locations and opportunities to repeat these interventions. If you want to be involved or have a tip for us, check our project page and online form or get in touch via e-mail!
These actions are not only an opportunity for single people – or families! – to get their hands in the soil and feel the joy of caring for trees and improving their environment. As of now, we also offer this option to companies or other larger groups, with our team ready to organise the whole event, assist in the selection and procurement of plants at competitive prices, or even in linking with other organisations that might benefit from the extra support.
In general, our focus is on promoting local, climate-adapted species in a diversified mix that increases biodiversity and ecosystem health and resilience. In addition to planting, we also aim to include the crucial maintenance work in future actions. Stay tuned and get involved!
Are carbon markets the solution for climate change?
Reforestation World was created to support forest restoration projects around the world, acting as a way to inform, connect and inspire others to act. For us, there are several good reasons to promote trees and healthy forest ecosystems, in addition to their possible contribution to the climate change problem. When we evaluate and support projects, or when we develop actions for the broader public, we try to consider all these different aspects.
Climate change is an unavoidable topic and has become a major consideration when designing and funding restoration projects. An important part of this discussion revolves around carbon credits and carbon offsets, the main topic of this newsletter and our selection of videos. The desire to tie restoration efforts with combating climate change is logical in many cases, and has created additional attention and willingness to support different types of interventions, which is positive. However, we also observe that the focus and decision-making can become too narrowly centered on “which option removes more tons of CO2 , at the lower cost?”
In this discussion, nature-based solutions such as avoiding deforestation, planting trees and restoring certain types of ecosystems are often highlighted, given their huge potential to absorb large amounts of carbon dioxide from the atmosphere and store it as carbon for long periods, under certain conditions. Large-scale tree-planting schemes, in particular, are championed as an approach to pursue, However, “tree-planting” can mean many different things, from replanting a mix of native species in degraded land, to creating monoculture plantations in land that has been deforested for that purpose. The positive and negative impacts can vary wildly and looking only at the carbon sequestration aspect is insufficient. Media coverage and discussions in academic, business and policy forums, sometimes present these schemes as a solution, and other times as a flawed – or insufficient – approach. As such, people might ask themselves: “Which approach is right? Where should our attention – and resources – be focused ? “. Eventually: “What should I support?“. Read on.
If you browse through our project partners, you’ll see that these have a mix of approaches. Some, like newTree, put their efforts in natural regeneration, protecting an area so that existing seeds and roots waiting in the degraded soil can re-establish themselves. Other partners, like ADES in Madagascar or ACES in Kenya, actively plant young specimens of native plants, to recreate bio-diverse ecosystems in deforested areas. They also ensure the necessary care and monitoring, a crucial aspect of successful restoration work. All of these projects have been certified externally and can issue and sell carbon credits based on their results, ensuring an extra source of funding. When we assess these projects, we see how these funds are applied together with the communities involved to bring additional benefits (in the supply of energy, health and education), all with proper compensation, ownership and joint work. Others projects in our list do not offer carbon credits, either because of the high costs and investments needed to be certified and audited regularly, or because their scale and type of activities is not (yet) economically viable for this type of offering.
For us, these are positive examples of how the sale of carbon credits can support restoration initiatives. However, as we discuss further in this newsletter, this is not the only reality. Carbon markets – where carbon credits are created and sold around the world, through a global network of entities – have been growing dramatically in the past decade, but there are rather serious issues with the current schemes. These issues affect the whole field and can slow our overall progress in addressing climate change, by producing false results, wasting money or creating reputational issues that lower public acceptance and commitment. Fortunately, these problems are being publicly exposed and addressed by different stakeholders, which should lead to the necessary improvements.
Linking back to our first paragraph, we want to highlight that all our project partners are focused on restoring forest ecosystems and creating as many associated benefits as possible, from greater biodiversity to improved livelihoods. Addressing climate change is urgent, no doubt. But we should not forget how much our life-supporting ecosystems have been degraded and destroyed, and how much we have to undo in order to regain our “paradise on earth”, in a sustainable way. It’s not enough to plant a few billion trees and keep the same practices as today. We need to have a smarter way to use and protect the natural wealth of our planet, both as a practical and as an ethical obligation.
To close, and to address the questions above, we encourage you to support solutions that provide more than quick fixes and cheap carbon offsets. If you want to support a project, look for those that create multiple benefits in parallel with healthier ecosystems, by working together with the local communities. Be open, be informed, be involved, and consider that some problems require collective action to achieve change. On an individual level, try to think about your consumption choices and what truly fulfills you, and consider favouring services and products that have a lower footprint, carbon and otherwise, or even a net positive impact. Lastly, try to connect with Nature as much as possible: it’s a source of beauty, wonderment and – in very real terms – the basis of our live. You’ll quickly realise how much better we live when our home is well cared for.
For a more in-depth view of carbon markets and the issues with offsetting, check our Q&A.
The current scientific knowledge is clear: to change path on climate change and avert a runaway climate system and a planetary crisis, we need to lower the current levels of greenhouse gases in the atmosphere. This includes carbon dioxide (CO2) and other gases such as methane (CH4) or nitrous oxide (N2O), which have shorter lives but have a much more potent effect than CO2.
For this, two things have to be done in parallel: 1) we need to to stop the increase in atmospheric CO2 (and equivalents), by reducing ongoing emissions in a fast, drastic way, while moving the world towards a low-carbon type of economy. 2) Given how long these gases remain active in the atmosphere, we also need to actively lower their concentration, by extracting them from the air and storing them in so-called carbon sinks .
The introduction of carbon credits and offset schemes is part of an effort to create a market for man-made emissions of carbon dioxide (CO2) and other greenhouse gases and, ultimately, reduce these to a safer level. The idea of using market forces with a light regulatory touch to address an environmental issue is a powerful one, particularly in market-oriented economies. Many such schemes have been launched in these past decades, all over the world. This Investopedia article gives a rather good summary of the so-called compliance and voluntary carbon markets, under which carbon credits are traded.
Compliance markets are regulated by government or multi-government bodies and tend to follow a “cap and trade” approach. In a somewhat simplified way, emitters are given a limit (“cap”) to how much CO2 emissions they can produce and are forced to pay for these under the polluter pays principle, so that their emissions stop being a complete externality, a cost imposed on the common good without consequence for the emitter. Then, by gradually reducing how many tonnes of CO2-equivalent gases can be generated over time (allowances), governments induce scarcity in a way that market participants can plan for. This leads to higher prices and a clear financial incentive for companies and nations to reduce their emissions at the source through cleaner technologies and processes, instead of delaying action and continuing with business as usual. In addition, public and private entities have a clear reason to fund or invest in less polluting solutions and industries, both established and upcoming, further accelerating the transition to a low-carbon economy. On the “trade” side, unused allowances can be sold as carbon credits to entities that exceed their allowance limits, enabling them to cancel out excess emissions – though purely in a book-keeping sense. This gives high performers a financial reward for their quick progress and imposes a cost on laggards. It also makes the transition less disruptive than an outright ban, in sectors where emissions could not be reduced easily or quickly enough such as in heavy transportation, metallurgy, and cement production. These are called hard-to-abate or hard to decarbonize activities, though this is also changing.
The past two decades have seen the launch of the European Emissions Trading System (EU ETS) and similar cap and trade programs around the globe. In theory, these should create a regulated market for carbon emissions, which can tap into the power of financial markets and offer the right incentives for a faster transition, all without major disruptions to the current economic and policy systems. In practice, there have been several challenges, setbacks and unexpected consequences along the way, from volatility in carbon prices to major policy reversals regarding allowances, or companies choosing to buy credits instead of reducing emissions because as a cheaper, simpler option. This article by MIT and Harvard researchers reviews different schemes over the last 30 years from an economy and policy perspective, providing valuable lessons and insights. Although progress has been slower than needed, these programs have managed to evolve and adapt to these issues, and their number and scope keeps on growing. According to BloombergNEF, a good source of analysis on carbon markets, compliance markets went from 5% to almost 20% of global emissions between 2011 and 2021, reaching an estimated value of 850 billion US Dollars. As a comparison, voluntary markets (covered below) amounted to an estimated value of 1billion USD in 2021 and a residual fraction of overall emissions. Echoing a general view, the Mckinsey assesses how both types of markets will play a necessary role in the near-future.
The voluntary carbon market, which is mostly unregulated, complements the trading of credits in compliance markets, by generating credits for trade from carbon offsets. Offsets are additional credits that can be created by nature-based and technology-based solutions* that either reduce (or avoid) new emissions, or by activities that remove and store CO2 already in the atmosphere. Reduction/avoidance can be achieved by, for example, preventing deforestation or using solar panels instead of fuel generators for electricity; removal can be done, for example, through reforestation or carbon capture technologies. Since offsets can be sold, and their value is expected to increase over time, a growing financial market has been created for projects that would traditionally fall into the development or conservation areas, but which are now seen as business and investment cases by companies and different types of investors. The amount of funding and projects has increased dramatically over the years, helping to finance emerging green practices, technologies, and services that otherwise might struggle to find customers. Major firms like Morgan Stanley or McKinsey forecast a strong growth for voluntary markets and see them playing an important role in the path to a net-zero world, where each emitted tonne of CO2 is being “compensated” by a tonne avoided or sequestered somewhere else. And here we start heading into the problem zone…
Despite its positive aspects, voluntary markets and the practice of carbon offsets have garnered strong and well-deserved criticism. Many have called this sector a “wild west” with a “gold rush” mentality, given the lack of proper regulation, transparency and accountability affecting standards, industry players and actual results generated. Both The Guardian and Bloomberg have produced extensive reporting on issues with offsets in the voluntary markets, leading to broader public exposure and follow-up articles by other media sources. The two videos below, produced by the public German broadcaster Deutsche Welle and by satirical late-night show host John Oliver, present the main points at depth and from two different angles.
In a blunt way, the current system has created an abundance of cheap low-quality credits, based on projects that should not be eligible even under lax rules, are poorly verified and bring no permanent reduction, like issuing credits for monoculture forestry plantations for paper and pulp, with a 5-10year lifetime. Claims about the benefits and the corresponding carbon credits issued are usually made in advance of the project producing actual results, not after. Considering that most nature-based solutions take decades to produce results, this is a huge problem. These claims are also routinely inflated in a gross way, even in properly monitored projects – a recent paper by ETHZ and Cambridge researchers (link to PDF) estimated that only 12% of the total volume of existing credits constitute real emissions reductions.
It would seem that a large but undetermined % of existing offset projects fail to follow the criteria for high-quality offsets but the difference between projects is not fully transparent to potential buyers, be it companies or individual consumers wanting to offset their personal emissions. As detailed in Carbon Brief, this situation has enabled many companies to make claims of being “carbon neutral” and greenwash their environmental performances with cheaper offsets instead of actual reductions or, at least, better-quality offsets, leading to a growing wave of legal actions. On the other hand, some companies seem to be making real progress with a combination of actual reductions and offsets, as reported in a new study from Ecosystem Marketplace and framed in this article by the Time magazine.
Although many of these issues have been known for well over a decade, like this 2014 discussion at The Conversation about offsets offered by airlines exemplifies, the growth of the sector has led to increased scrutiny. A growing series of large scandals, which keeps on unfolding, has directly affected the credibility of major players and shaken the sector. It started with an exposé on Bloomberg Green (paywall), showing how Nature Conservancy, one of the leading US NGOs, had provided millions of offset credits to major companies like Disney or JP Morgan, for avoiding deforestation in areas that were already under effective protection, such as US national reserves. To their credit, the Nature Conservancy then embarked on a serious assessment of its portfolio. This exposé started a public review of many organisations in the sector, exposing many shortcomings. Earlier in 2023, in-depth research released by Source Material together with The Guardian and Die Zeit (paywall) newspapers, indicated that Verra, the leading standard setter and issuers of offset credits, had systematically created or enabled “phantom credits”, and that up to 90% of the millions of credits issued over the years are now deemed worthless and invalid. Shortly after, the Swiss firm South Pole, the leading seller of carbon offsets, came under fire for misrepresentations in their flagship deforestation avoidance Kariba project in Zimbabwe, as covered in the video above, or in these articles in the New Yorker and the Swiss Tages Anzeiger publications. What is significant is not only the size of these cases but also that they affect the leading players, which are expected to have the highest-quality processes and products. These events cast a huge shadow of doubt over the entire sector, leading to a prompt withdrawal from buyers, as seen here in The Guardian, and a growing distrust from the public opinion whenever they’re confronted with compensation options by companies and NGOs.
All this noise in the system distorts the markets, lowering confidence and investments, and affects countless legitimate projects being developed in areas where they are acutely needed and can benefit the local communities. At the same time, the costs of certification remain too high and controlled by a handful of companies worldwide, further increasing the barriers to entry. For many projects, the costs with certification and intermediaries significantly increase the compliance burden and reduce the amount of funds that actually reach the ground. The strategy of using carbon credits as an income source for projects becomes either inaccessible or economically unviable, keeping the traditional “development aid” as the major funding source.
Taking the above into account, we still think that the trade of carbon offsets can play a positive role towards climate change and, particularly, in providing a legitimate funding source for many nature-based projects. Nature Conservancy makes a case for the ethical obligation to use these, since it’s one of the tools we have at hand and the issue of climate change seemingly requires all that we can do.
However, the system for carbon credits and offsets needs a deep and honest transformation, in order to fulfill its promises and keep the profit-driven motive under control – particularly when confronted with a variety of actors eager to “invest” billions of dollars in this space. This improvement process seems to be happening, as individual participants and multi-lateral organisations rework and refine guidelines, methodologies and mechanisms used. On the corporate consulting side, the Boston Consulting Group lays a good succinct overview of what is needed to move these forward, while the World Resources Institute, for example, has created a useful (though technical) report for corporations called “Guidance on Voluntary Use of Nature-based Solution Carbon Credits Through 2040“. On a higher level, the EU ETS and other programs are explicitly prioritising reductions, while placing stronger limits on how much companies can offset, and how.
Whether a tangible improvement will be achieved remains to be seen.
There is one important point to take into account, particularly when discussing offsets from nature-based solutions, such as the restoration of forests, peatlands and other ecosystems which can act as carbon sinks, or even the improvement of soils and food production systems. In addition to the climate change problem, these efforts can also help to improve and ensure essential ecosystem services and attenuate the loss of biodiversity, two issues which are also at a critical level. In addition to the climate change problem, we have brought many of our life-supporting systems close to dangerous tipping points, and we urgently need to change tack.
* Project Drawdown provides a complete and accessible list of solutions that we have at hand, today. Check it and see how restoring forests and plant-based ecosystems can make a huge difference. As we said back in our Forest News #12, there is no reason to wait!
Recommended readings
- Emissions Gap Report 2022 (free PDF, English, 132 pages): published by the UN Environment Programme (UNEP), this report gives an overview of current progress in the reduction of greenhouse gases’ emissions, together with current technical and political solutions. The “emissions gap” refers to the difference between where emissions are predicted to be in 2030 and where they should be to avert the worst impacts of climate change.
- In-depth Q&A: Can ‘carbon offsets’ help to tackle climate change? (online, English): this extensive but easy to understand overview by the Carbon Brief cover nearly everything that is important to know about offsets. (unless you are trading on these yourself).
