Experts quit carbon market watchdog in row over quality label for forest credits

Two ICVCM expert advisors have resigned from their positions over what they called a “problematic precedent” set with the REDD+ decision

A key oversight body set up to improve the quality of carbon credits has been called into question by members of its expert board, two of whom recently resigned in protest over its decision to endorse offset rules they say lack integrity.

Last month, the Integrity Council for the Voluntary Carbon Market (ICVCM) gave its high-quality label to three methodologies for producing carbon offsets that aim to reduce deforestation under so-called REDD+ projects – the first to be approved for forest offsets.

The watchdog said at the time that the new forest carbon credit rules would “usher in a new generation of high-integrity projects” as they addressed concerns with previous REDD+ methodologies that came under fire for overstating their emissions-cutting benefits.

But carbon market experts Lambert Schneider and Juerg Fuessler have now come out publicly against the decision which they say sets a “problematic precedent” and calls into question the ICVCM’s assessment process. They both announced this week they had stepped down from the body’s expert panel which plays an advisory role in the ICVCM’s decision-making. Schneider formally left the post in September.

Divisions in ICVCM’s ‘big tent’

The ICVCM was set up to address widespread concerns over the quality of carbon credits and inject more credibility into the market. The watchdog assesses guidelines used to develop offsetting projects to determine whether they comply with the “Core Carbon Principles” (CCP) criteria, which are designed to identify and encourage high-integrity credits that meet requirements on governance, emissions reduction and sustainable development.

A spokesperson for the ICVCM told Climate Home that the body “purposefully built a ‘big tent’, seeking out diverse experience and expertise”. Members of civil society, academia and the corporate world – including the carbon offsetting industry – provide input into the ICVCM’s rulings on carbon credit methodologies.

Its working group on REDD+ – which operates separately from the expert panel – included representatives from Amazon, forestry project developer Wildlife Works, carbon standards like Verra and ART, and non-profits like the World Resources Institute and the Environmental Defense Fund, among others.

The spokesperson said that having “all perspectives” included in the process “inevitably produces disagreements on specific issues and even on assessment decisions”, and described that as a “strength” rather than a weakness. But, they added, “overall the assessment process found that the methodologies have robust approaches in place to mitigate environmental risks”.

Integrity ‘at risk’

Schneider, a research coordinator for international climate policy at Germany’s Oeko-Institut, disagreed, telling Climate Home the approval of the REDD+ methodologies threatens the oversight body’s mission.

“In our assessment, the three methodologies do not comply with ICVCM’s criteria,” he said. “That presents a risk to the integrity of the initiative,” he added.

ICVCM greenlit two methodologies proposed by leading carbon standard Verra and one developed under the ART Trees programme.

In a joint online post, Schneider and Fuessler, along with two other experts involved with the ICVCM, wrote that although the new rulebooks for forest carbon projects offer improvements on previous versions, they still run the risk of generating low-integrity credits.

That, they argue, is because of the ways project developers are able to estimate how much deforestation would occur without the project, demonstrate that funding from carbon credits is needed (known as “additionality”), and counter the risk of carbon being released back into the atmosphere, for example as a result of wildfires.

“Given the large size of these activities, we fear that the current methodologies could lead to large volumes of credits not backed by any actual emission reductions,” the experts concluded.

Continued monitoring

The ICVCM spokesperson told Climate Home that some of the risks raised by the experts “were not likely to be material due to external factors such as global deforestation trends”, without elaborating further, while others would be effectively addressed through the approach used in the methodology.

The spokesperson also added that the ICVCM will monitor the implementation of the methodologies and remain “attentive to integrity risks in their application”.

No credits have been issued so far under the three approved methodologies for forest projects, but the body said that “there is a large volume of credits in the pipeline”.

Hundreds of millions of REDD+ offsets have been issued under older methodologies but have faced widespread criticism over their alleged lack of real emissions reductions and weakness in protecting environmental and human rights. The ICVCM did not assess the criteria for these earlier projects, and producers of those credits will not be able to claim the high-integrity CCP label unless they switch to the approved methodologies.

Tiered system?

Schneider said the ICVCM had set a “relatively ambitious” benchmark, but for now “the problem is that the number of high-quality credits that meet that level is quite low”.

He added that the body could have chosen a different approach if it wanted to “distinguish the grey from the black”, referring to projects that are judged to have varying degrees of integrity.

“You could do this by introducing a tiered system instead of just setting one bar,” Schneider said.

The ICVCM spokesperson said the body’s approval process for its high-quality offsets label “is built intentionally to get many perspectives, not to force people into consensus”. There are 26 members in its advisory groups, and four of them disagreed with the REDD+ conclusion, the spokesperson added.

Cover photo: A deforested area in Bolivia, where a soya farming boom has led to an increase in tree loss. Photo: Marcelo Perez del Carpio / Climate Visuals Countdown