We discussed the most common misconceptions about NBS, why they're such an effective tool at creating co-benefits for local communities and the climate, and what the future looks like in this space.
What do you see as the current state of play, both in the REDD+ market in the US and globally?
The way I see it, the current state of play in the US is not so much project development, or generating credits from REDD+ forest protection projects, but a real chance for corporate action. For companies wanting to achieve net zero, their biggest opportunity is acquiring REDD+ credits and supporting Nationally Determined Contribution (NDC) commitments in developing countries. These credits are high quality, have great transparency, and generate impact for the local communities and for the governments in the countries from which they originate.
In the global market, I believe the REDD+ marketplace is at a significant evolutionary moment. The Voluntary Carbon Market (VCM) is paving the way for compliance markets and national climate plans, and REDD+ is leading on that front from project-based approaches to jurisdictional-based approaches. This has been an ongoing process for several years, specifically implementing solutions in project-level work, which is where the vast majority of the media scrutiny is that we've seen in the past year.
How do REDD+ projects effectively channel the finance they receive, and what is the most common misconception you see about projects?
I'll give you an example of what I believe the future will look like. Globally, large corporations that have scalable net zero commitments, will need millions of credits. And they need certainty about how they're going to meet those pledges. They need credibility from the quality of the credits and financial certainty about what costs are going to look like. And they want to invest in and lock those up sooner rather than later. The VCM and in particular J-REDD+ that is being implemented are the most reliable ways to address those questions. For clarity, J-REDD+ refers to REDD+ projects with a high level of government, or jurisdictional, involvement in the management of the landscapes.
I believe the most common misconception is the following: buying credits pays people to not do anything. It's in the name: avoidance of emissions. We have a misunderstanding on our hands – in assuming that there must be an enforcement problem. But market mechanisms like the VCM have demonstrated time and time again that they are part of the global climate solution.
The reality is that there are socioeconomic pressures on all kinds of families worldwide to get fuel, and wood, to cook, build their homes, and clear land for farming. What projects do is integrate rural economic development: protecting resources, and at the same time increasing the value of other activities and livelihoods to be higher than clearing forests.
And that's the way that we protect the Earth. A rising tide lifts all boats – when we work together.
Where do you see the potential of J-REDD+?
Jurisdictional REDD works with governments on the projects' monitoring. However, it often lacks funding for other aspects such as reforestation or the protection of boundaries.
This is where we, and other carbon developers, come in: funding a blended finance portfolio with the help of corporations, we are able to channel finance into the jurisdiction and support project implementation on the ground. We support project activities with the communities throughout the land area, for example, managing or creating new small businesses, such as tree nurseries or seed collectors.
In general, this is a new REDD+ approach, both in its scale and in terms of the partnerships with beneficiaries and governments. It means there's scope to improve. At the same time, this approach allows for large-scale mitigation, because we are able to access massive landscapes. The methodologies themselves will address topics of baselining and leakages. And many of the challenges associated with benefit distribution will be transparent and public because of the involvement of government entities. Those are all great advances, and for the marketplace, this is a great leap forward.
Along with decarbonisation, J-REDD and REDD+ projects also have the potential to address social issues through co-benefits. How can project developers support the creation of co-benefits and also ensure their equality and security in project operation?
There are all kinds of ways of channeling finance for climate impact, but NBS is unique. The “secret sauce" is its co-benefits; it creates jobs with local communities. It involves them in understanding their role and the need that they have to maintain the ecosystem as the fundamental driver of the rural economy of planet Earth for them, their kids, and their grandkids. And it resonates with their sense of self. The co-benefits make NBS projects, I believe, worth much more than other types.
In terms of ensuring and securing these co-benefits: there are robust ESG frameworks that incorporate a whole host of safeguarding mechanisms and sustainable development goals. They are embedded in, for example, the protocols of the Forest Carbon Partnership Facility (FCPF), the World Bank, and the IFC ESG safeguards, among the most rigorous and mature overall. VERRA, of course, has a whole suite of tools for that, as well as the climate community and biodiversity co-benefit standard tied to VERRA.
But the “secret sauce" for a nature-based solutions project is that we work with people on the ground to improve their landscapes. And they know it. And they want to do it. And they love that they're paid to do it. And they know that all of the benefits outside of the carbon credit itself that go back to the investor accrue to local people.
So, could we improve at assessing implementation, which is our role in these projects? Yes, we could strengthen that. We can also build capacity amongst all the actors so that we ensure that the outcomes are better steered towards an equitable, gender-balanced, generationally balanced approach. That's something that we're beginning to consider.
But when it comes to the overall potential to address both social and climate issues, I believe there's almost no better way to do it than nature-based solutions that protect, sustainably manage, and restore our precious ecosystems.