We already hinted during Filecoin's Sustainable Blockchain Summit in Paris that many of the underlying Verra projects in Toucan's NCT are overestimating their climate impact. Here are some examples how radical transparency can empower the due diligence of decision makers and corporate buyers.
No financial additionality
VCS 960 is an awful example of conservation projects, that fail to meet the financial additionality criteria. Managed by Weyerhauser Uruguay, this "reforestation" project sells sub-dollar carbon offsets for a tonnes. To provide you an insight what that means: In order to sequester one tonnes of CO2, we would need to plant ~15 trees and keep them alive for 50 years. That results in 6 cents per tree. If you have ever planted and nourished a tree in South America, you will know that this is hard labour. 6 cents sounds off - so how can Weyerhauser Uruguay sell them for so cheap?
Looking up the satellite imagery through GainForest's transparency dashboard can provide an answer: First of all the plantation is a forest monoculture (recognizable through the uniform tree pattern). Second, the project area (in green) only covers part of the overall plantation.
It turns out that Weyerhauser is in fact a large commercial timber company and we are most likely looking at a commercial timber plantation that sells carbon offsets as a cherry on top of their existing business model. This is bad as the sub-dollar pricing ensures that honest projects that meet the financial additionality criteria can't compete with Weyerhauser.
Intransparent baselines
VCS 844 (in green) is an example of a great biodiversity and nature conservation project that is unfortunately a carbon offset project with a bad taste. Madre de Dios in Peru is one of the most biodiverse areas in the world, with many rare and endangered species. Unfortunately, the number of carbon credits issued by the project rely on an unfair baseline.
The reference region (in orange) is next to a street and engulfes the city of Iberia. Thus deforestation rates are unsurprisingly higher in this area. At GainForest, we are currently implementing counterfactual baselines that depend on more "similar" pixels, but we strongly believe that due to the unfair reference region, much more carbon credits have been issued than justified.
Moving forward
However, there are good projects within NCT. It is important to allow for rapid feedback to ensure that these projects outshine the bad ones. Please visit our app: gainforest.app to learn more about our methodologies and transparency dashboard.
Lastly, here are some of our recommendations to innovate the voluntary carbon marketplace with technology and transparency:
| In a nutshell: | |
| Increase Inclusivity | Many current carbon credit projects consist of large mega projects run by dubious firms. The cost of accessing the market is too high for small landowners, making centralized carbon projects `to big to fail` and easy to cheat |
| Frequent Monitoring | Monitoring, reporting and verification only monitor an area once every couple years (if not even). We need aim to move assessment to the most recent data points available (~ every 5 days) |
| Open Data and Science | Decisions need to be done on the basis of open data, models and science. Many Verra projects are intransparent and do not even provide a digital shape files. |
| Upgradable Offsets | Methodologies often fail and need to be upgraded. Companies need to be able to update their past offsetted carbon when methodologies are updated. |