Stopping deforestation is a critical step to avoiding dangerous global warming and to meeting the goals of the Paris Agreement. Therefore, transforming the economic incentives to make forests more valuable alive than dead would be one of the most effective paths to lower global emissions. Incentivizing the conservation and sustainable management of tropical forests also protects the livelihoods of indigenous communities.
This is what the California Tropical Forest Standard sets out to accomplish. Proposed by the California Air Resources Board, the Standard sets out comprehensive requirements that large-scale programs to reduce tropical deforestation emissions should demonstrate in order to be considered for carbon credits in a compliance market, such as California’s cap-and-trade system.
California can use its climate leadership to set the standard for tropical forest protection.
The Standard lays out California’s views on what should be required of a jurisdiction seeking crediting for its emissions reductions. While the proposal sets out a framework of minimum requirements and does not itself open the door to crediting in California’s market – the signal carries significant weight coming from a global climate leader, and one with the second largest emissions trading system in the world.
What the standard proposes
The California Tropical Forest Standard would apply to international jurisdictions with programs to reduce deforestation emissions seeking to sell reductions into California’s carbon market, or potentially any other carbon market that chooses to adopt its rigorous approach. Adoption of the Standard, or TFS, alone won’t allow crediting in California’s carbon market (a separate regulatory action would be needed for that to occur). However, by adopting it, California would send a critical signal about its views – both on the importance of addressing emissions from deforestation in the tropics, and the rigor that should be required for crediting it.
Who supports it
Many indigenous groups along with scientists, academics and economists, and international policy experts all have voiced support for the Tropical Forest Standard.
During the November 2018 CARB hearing, representatives from COICA, a group representing nine indigenous organizations from across the Amazon Basin, were on hand in support of the TFS. A representative of COICA testified how the TFS would recognize indigenous communities as strategic allies in the construction of environmentally friendly policies to conserve forests and promote human rights.
The Yurok Tribe, the largest Native American tribe in California, also voiced their support. A representative from the Yurok testified in person to highlight how the TFS incorporates the Guiding Principles adopted by the Governors’ Task Force in 2018, which ensures the standard supports the rights of indigenous peoples and their self-determination goals.
Environmental and Social Safeguards
Under the proposed Standard, only rainforest credits that meet strict environmental and social criteria would be considered for crediting in California’s market in the future. For example:
- Participant jurisdictions must have adequately and transparently engaged indigenous peoples and forest communities in the program’s design and implementation, in accordance with established international best practices.
- Before crediting of emissions reductions could occur, jurisdictions must demonstrate that they have also reduced deforestation at some level on their own (i.e. through existing policies and with financial resources that are not from the crediting jurisdiction).
- Programs must have established a transparent system for distribution and use of financial benefits gained from selling credits, which includes benefits to indigenous and traditional forest communities.
- Jurisdictions must show they’re reducing deforestation statewide and below historical levels - and must continue to meet more and more ambitious reduction targets over time.
California’s regulations allow a limited quantity of offsets to be credited through its cap and trade system and already specify that if crediting for tropical forests were to be developed and issued at some point in the future, they would fall under its cap-and-trade program’s limit on quantitative offsets. Because this limit declines post-2020 and some offsets have additional requirements, the limit for these credits would be two percent.
But what would those credits look like and what would California require? This is the marker that the TFS establishes. Its adoption would provide a global signal on the high bar that should be set for this type of crediting, as well as laying the foundation for regulatory action to allow this crediting to become part of California’s program.
Approval of the TFS is a critical step. It sends a loud and clear signal to jurisdictions designing or implementing programs that efforts to conserve and sustainably manage forests – if done right – are valued, but they must adhere to stringent social and environmental requirements to link with a market like California’s.
California collaborating with high-quality forest protection programs would have a substantial impact on efforts to end tropical deforestation – a game-changer in the effort to show that forests can truly be worth more alive than dead.