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Revisiting the Importance of Reductions

Published: November 15, 2022 by Editorial Team

Reduction credits (also referred to as avoided emissions) are a key feature of Article 6 negotiations underway at the 27th COP in Sharm el-Sheikh, Egypt [1] which may carryover to future COPs [2]. As the rules for international carbon trading are being finalized, the UN has requested a formal assessment of whether credits generated through “emissions avoidance and conservation enhancement activities” will qualify under the mechanisms listed under Articles 6.2 and 6.4 of the Agreement [3]. At the same time, TCT has observed that some buyers favor removals over reductions, which has resulted in lower prices for forest-based reduction credits compared to their removal counterparts. However, reductions are critically important because they are often inseparable from nature-based removals, and they may have a greater impact on the atmosphere than removals do.

Reduction credits are generated from projects that avoid the future release of GHG emissions, such as projects focused on renewable energy or REDD+ [4]. In contrast, removal credits represent a tonne of CO2e that has been removed from the atmosphere and stored in another reservoir (e.g. a new forest or in technology-based carbon storages). TCT has made the point that these two credit types are intimately linked in IFM projects, and forest and climate scientists are clear that reducing emissions from deforestation should be a priority. In a Q&A with Climate Feedback, Dr. Karen Holl, professor at U.C. Santa Cruz communicated that “As a restoration ecologist who has spent over 25 years studying how to restore forests, I know that it is nearly impossible to restore exactly what was there before, and it makes much more ecological and economic sense to protect existing forests so that should be the priority. Yet, large scale forest clearing continues worldwide.”

Additionally, a study published last year in Nature Climate Change challenged the assumption that “one tonne in equals one tonne out” with respect to GHG emissions and removals [5]. Results from that study highlighted the asymmetry in Earth’s climate system by showing that a tonne of CO2 emitted into the atmosphere raises atmospheric CO2 more than a tonne of CO2 removal can lower it.

Valuing reduced and avoided emissions remains an important function of carbon markets, and high-integrity credits of this type from natural climate solutions should be included along with removals in the Article 6 mechanisms.

[1] Policy brief by White & Case
[2] COP27 Update: Carbon Pulse