Credit where credit is due: big businesses urged to prevent collapse of voluntary carbon market
13 December 2017
As world leaders head home from the One Planet Summit, which was held in Paris yesterday to mark the two-year anniversary of the Paris Climate Agreement, international NGO Farm Africa is urging big businesses who have signalled support for the 2015 agreement to help make it a reality by ensuring a healthy future for the voluntary carbon market.
The NGO has issued a stark warning that endangered tropical forests such as those in the biodiversity hotspot the Bale Mountains Eco-region in southern Ethiopia are at risk if anticipated income from the sale of carbon credits fails to materialise.
Tropical forests can provide up to 30 percent of the climate change mitigation needed to meet the objectives of the Paris Agreement. To keep rises in global temperatures in check, urgent action is needed to ensure local communities receive the compensation they expect and deserve for safeguarding their forests.
A new report by Farm Africa outlines how the promise of carbon credit payments has been used as an incentive for rural Ethiopian communities to reduce deforestation. The NGO warns that unsold carbon credits could spell the reversal of impressive reductions in deforestation in the Bale Eco-region, an area of unique ecological significance that encompasses Africa’s largest alpine plateau.
The report, entitled “Reducing Deforestation and Emissions in Bale: What’s the incentive for local communities?”, presents evidence of how 12,496 hectares of forest in the Bale Eco-region were saved between 2012 and 2015 following the establishment of a REDD+ initiative, a scheme that enables developing countries to sell carbon credits for reductions in carbon emissions generated by avoided deforestation and forest degradation.
The reduced deforestation stopped 5.5 million tonnes of carbon dioxide from being released into the atmosphere, the equivalent to taking 1.2 million passenger-driven vehicles off the road for one year, according to the United States Environmental Protection Agency.
However, the volume of carbon credits traded on the voluntary market fell sharply in 2016 by 24%, and a total of 56.2 MtCO2e credits were reported as unsold across the market that year. The risk of not finding a buyer means that forest communities could return to having to convert forests into agricultural land to feed themselves.
The NGO applauds efforts such as the Carbon Pricing in the Americas initiative launched at the One Planet Summit, and now calls on private sector companies to deliver on their promise to play an active part in reducing carbon emissions and ensure that the voluntary carbon market pays a fair price for forest communities’ hard-won climate gains.
Any failure by the market to pay up for current credits could undermine the economic incentive for conservation in forest areas such as Bale and mean that communities may have few options left but to return to previous patterns of clearing forests for agricultural use or timber.
Farm Africa CEO Nicolas Mounard commented: “Farm Africa’s experience of working with local communities and government in Ethiopia has shown that REDD+’s ambition to curb deforestation and reduce carbon emissions is possible, and that this can be done sustainably. We can produce the goods. The ball is now in the hands of the private sector to show that this is indeed a reliable market proposition.”
Yvan Biot, the report’s co-author and Farm Africa’s Director of Research and Development added: “Impressive climate achievements have made this project a global example in combating deforestation and decreasing greenhouse gas emissions. The project demonstrates that the management of forests can be both environmentally and financially sustainable for smallholder farmers. But all this progress could be reversed if the promised rewards for communities fail to materialise.”
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