The article, Southland carbon offset project may have overestimated the effect of logging, by Stuff’s Olivia Wannan, questioned the credibility of a forestry-based offset project developed in New Zealand for Rowallan Alton Incorporation by Carbon Partnership and Ekos between 2008 and 2013.

According to the article, an official from the Ministry of Primary Industries has suggested that the carbon sequestration reported by the project has been overstated. The article goes on to suggest that the carbon claims made by businesses using these carbon credits to offset their emissions are “questionable”.

The owners of the Rarakau forest project have given up the right to harvest timber from this forest and have committed to enhancing carbon sequestration through forest management practices in return for carbon credits. Revenue from the sale of the carbon credits is invested in wider conservation and community initiatives. A spokesperson from Rowallan Alton said “The carbon credits project has been helping us build a future for our people and it is great that we can also be climate champions at the same time”.

The Rarakau forest is an area of pre-1990 tall indigenous rainforest. The carbon sequestration achieved by the project has been certified by Plan Vivo, an international programme that issues voluntary carbon credits. Carbon credits have been issued to the project annually since 2014. Determination of the number of carbon credits earned is in accordance with Plan Vivo measurement requirements which in turn is based on a methodology known as Reducing Emissions from Deforestation and Forest Degradation, referred to as REDD+.

Preventing deforestation essential

It is essential that we prevent further deforestation of critically important rainforests such as those in the Amazon, Papua New Guinea and the Pacific Islands including New Zealand.

The intention of the REDD+ programme is to provide incentives that help reduce deforestation of forest areas in rainforest nations through enhanced forest management. The underlying premise is based on providing economic support to local communities in return for a long-term commitment to maintain these forests and manage them to enhance wider conservation outcomes. REDD+ was developed under the United Nations Framework Convention on Climate Change (UNFCCC) in 2005 and the ‘rulebook’ was completed and approved in 2015.

The REDD+ concept has been highly controversial and hotly debated among carbon market and forest management experts. While there are some weaknesses in the methodologies, these will improve over time. Fundamental principles for the integrity of offset projects, such as permanence and additionality are difficult to uphold where there is uncertainty in land tenure arrangements and lack of national policy frameworks.

The income from REDD+ carbon credits may not be sufficient to compete with well-funded logging companies. The price of carbon credits on the voluntary carbon market has often been too low to prevent this happening. If society values protection of these rainforests sufficiently, the price of carbon credits must increase significantly. Higher prices result in more scrutiny into the integrity of project management and governance by buyers of carbon credits.

Projects reducing emissions

Despite the criticism, researchers have found consistent reductions in deforestation and forest degradation in REDD+ forest areas. Costa Rica was paid $16.4 million by a World Bank trust for REDD+ projects that reduced 3.28 million tonnes of carbon emissions and is on track to receive another $60 million for further reductions of up to 12 million tonnes of emissions. The Costa Rica government has improved the public policies that cover sustainable forest management, fire management and landscape restoration. A Payment for Environmental Services programme provides incentives to farmers for forest conservation, reafforestation, agroforestry and silvopastoral systems. Costa Rica is set to become the ‘poster child’ for future REDD+ projects.

While New Zealand has an emissions trading scheme that includes participation of post-1989 forestry which can earn New Zealand Units (NZUs), there is no domestic policy framework for the development and approval of voluntary projects to earn carbon credits. There are no government-approved or required measurement methodologies for voluntary offset projects. The only legislation that applies to the voluntary carbon market in New Zealand is the Fair Trading Act which covers environmental and carbon claims. Misleading claims are regulated by the Commerce Commission. To date, there have been no prosecutions in New Zealand for misleading carbon claims.

Ekos provides a range of carbon management and assessment services including offset project development. The pre-1990 Rarakau rainforest was not eligible to participate in the New Zealand Emissions Trading Scheme. The project was an early attempt to test a REDD+ type methodology in New Zealand. Ekos was awarded government funding and it partnered with a number of key organisations including the crown research institute, Manaaki Whenua.

The work undertaken from 2008 to 2013 to prepare for third-party assessment was meticulous. Initial assessments were undertaken by the international verification body DNV. Later assessments were undertaken by Plan Vivo which in turn is an endorsed standard under the International Carbon Reduction & Offset Alliance (ICROA).  ICROA is part of the International Emissions Trading Association (IETA) and provides international best practice guidance for offset providers.

Transparent process

Ekos has been open and transparent; all key documents and reports for its offset projects are publicly available on both the Ekos and Plan Vivo websites. As a test case, the Rarakau project has teased out important issues that are relevant to any forestry-based voluntary offset projects that might be developed in New Zealand in the future.

Firstly, pre-1990 Rarakau forest is accounted for in the national inventory and in 2014 there was uncertainty as to whether there was ‘double counting’ of the claimed carbon sequestration in New Zealand’s international accounting under the second commitment period of the Kyoto Protocol. The Ministry for Primary Industries, whose responsibilities include forestry, provided written confirmation that the voluntary carbon credits issued “did not appear to constitute double counting”. However, from 2020, the Rarakau forest does contribute towards New Zealand’s Nationally Determined Commitment (NDC) under the Paris Agreement. The Ministry for the Environment has provided interim guidance on voluntary offsetting that includes discussion of this double counting issue in the New Zealand context. The double counting issue makes voluntary offsetting both complex and confusing for both project developers and carbon credit users.

Secondly, Rarakau is an indigenous forest and although the owners have logging rights, it is highly unlikely that the forest would be logged. Clear-felling of indigenous forest is not permitted in New Zealand but some logging is allowed. This could call into question whether there is need for the incentive of carbon credits to prevent deforestation. However, as long as the forest owner has logging rights, future logging remains a risk.

Lastly, determination of the number of carbon credits that can be earned by the Rarakau project includes an assessment of improved forest management. In an established forest, it is challenging though not impossible to measure any year to year differences in carbon sequestration that can be attributed to management practices. The Ministry for Primary industries is conducting research into exactly this issue - forest management interventions to increase the development of carbon sinks. The 2022 budget for the Climate Emergency Response Fund allocated funding for this research.

Comparison invalid

The Stuff article links its story to an exposee on criticism of REDD+ type projects in California which generate nearly 100 million carbon credits. The Rarakau project is awarded 2,458 carbon credits annually. This is a long bow to draw; there is no valid comparison that can be made between the New Zealand and Californian scenarios.

It is puzzling that the Rarakau project has been singled out at this time considering that it has been operating since 2014. In the absence of a domestic framework for voluntary offset projects, the project owners have met all the requirements of a reputable international project certification programme which specifies the measurement methodologies to be followed. The situation would be different if there were approved domestic methodologies and verification requirements that domestic voluntary projects are required to use. If there have been complaints of misleading sequestration claims made to the Commerce Commission, they have not been upheld.

In 2008, both government and research organisations were keen to test the REDD+ concept in New Zealand through the Rarakau project. The work undertaken by Ekos in the voluntary carbon market space provides valuable experience that could be used by government to inform the development of a governance framework and required measurement methodologies for a voluntary carbon market in New Zealand. Other prospective offset projects that could be developed in New Zealand are going overseas to seek certification; they are likely to face similar challenges under the current New Zealand policy settings.

Currently, there are almost no New Zealand generated carbon credits to meet the growing demand from business, industry and the Carbon Neutral Government Programme for offsets to meet carbon neutral commitments. There are potential projects waiting in the wings for the government to provide the policy framework for a domestic voluntary carbon market.

=====

Read more from Dr Ann Smith in Letters from the Atmosphere, a regular newsletter looking at the science behind news stories on climate action.