The California Air and Resources Board endorsed the Tropical Forest Standard (TFS) on September 19th after 10 years of research and negotiations. The standard outlines criteria for jurisdictions that wish to link sector-based crediting programs that reduce emissions from tropical deforestation to other emissions trading systems. The TFS standard would apply to forest protection programs across jurisdictions as opposed to carbon offset programs whose methodologies are project area based. The standard’s goals are to ensure the integrity of forest protection programs that address and monitor deforestation while having high standards of greenhouse gas emission reductions, environmental benefits and social equality. The endorsement of this standard will establish more avoided deforestation programs that can be recognized for their climate action by allowing them to access growing carbon offsets programs such as the International Aviation Organization’s Carbon Offsetting and Reduction Scheme. Currently, the standard is not approved for California’s Cap and Trade program but could one day be linked to the California market. Analyses have shown that if the standard is effectively implemented, over $1 billion could be generated to help reduce tropical deforestation over the next 10 years.
While this program has received support from multiple indigenous community alliances, it has received many of the common criticisms of tropical forest protection programs, which have been discredited time and again. Like many carbon offset and forestry protection programs, permanence risk, additionality, and leakage are of high concern. The TFS includes some of the most stringent protocol guidelines to date. Risk of reversal is one such concern, especially with increasing media coverage of the Amazon wildfires. To mitigate reversal risk, a portion of generated credits will be set aside in a buffer account to be used as insurance if any fires or other reversal occur. The set aside is determined through a risk reversal assessment and the minimum contribution to the buffer account will be 10% of generated credits. The TFS has also imposes strict additionality rules, requiring projects to reduce their emissions 10 percent below baseline through their own actions before they are eligible to receive credits. This baseline declines over time resulting in further emission reductions. To prevent leakage, TFS states that the project must address the drivers of tropical deforestation and work to lower the threat of these drivers in project areas to prevent leakage. This process needs to be certified through a third-party verification and also demonstrate economic growth and sustainability in the local communities.
Avoiding deforestation is imperative to maintaining the massive carbon sink that is the Amazon rainforest and other tropical forests. The Tropical Forest Standard creates a new pathway to financially support the maintenance of these sinks in a way this is highly transparent and provides economic opportunity and protections to indigenous ways of life. After years vetting to effectively respond to permanence risk, additionality, and leakage concerns related to international carbon projects, The Tropical Forest Standard stands ready as an effective tool in the fight against climate change.