The TFCI Guide provides clear guidance for companies interested in purchasing high-quality tropical forest carbon credits to improve the integrity and impact of purchases
Eight major environmental and Indigenous Peoples organizations today released the Tropical Forest Credit Integrity (TFCI) Guide, principles for companies to follow when investing in tropical forest carbon credits to fight climate change.
The eight organizations behind the TFCI Guide are:
- COICA-Coordinator of the Indigenous Organizations of the Amazon Basin
- Conservation International
- Environmental Defense Fund
- IPAM – Amazon Environmental Research Institute
- The Nature Conservancy
- Wildlife Conservation Society
- World Resources Institute
Made possible by a grant from the Bezos Earth Fund, the TFCI Guide is the result of a yearlong collaboration between the eight organizations in consultation with diverse stakeholders from around the world.
The resulting guidance provides five key recommendations for how companies acquiring credits can direct their demand to ensure high-quality tropical forest carbon emission reductions and removals. These include:
- Include tropical forest carbon credits in their beyond-value-chain mitigation strategies to augment an ambitious, transparent and science-based decarbonization target.
- Ensure that essential components of social and environmental integrity are met for all credits purchased.
- Align corporate reporting of forest carbon crediting purchases with the Paris Agreement’s transparency and accounting requirements and with enhancement and achievement of nationally determined contributions (NDCs).
- Rapidly shift demand toward credits from jurisdictional-scale programs (including fully nested projects).
- Prioritize purchase of credits from programs and projects that reduce threats to standing tropical forests.
The TFCI Guide is intended to support those responsible for developing and implementing corporate climate mitigation strategies to help differentiate credits and the underlying activities with a view to ensuring high quality and integrity. The group asserts that differentiated corporate demand can help drive the supply of forest carbon credits toward higher quality.
Voluntary markets for tropical forest carbon credits can play an important role in helping limit global warming to 1.5 degrees Celsius when combined with companies’ deep decarbonization within their operations and supply chains. However, the TFCI Guide is clear that carbon credit purchases are only one of multiple avenues for companies to support natural climate solutions, and are a complement to, not a substitute for, long-term deep decarbonization.
In the face of growing demand for carbon credits in voluntary markets, it is vital to provide guidance on high-quality carbon credits to ensure that future investment is directed to where it will have the greatest impact. An essential component of quality is full respect for the rights of Indigenous Peoples and Local Communities. It is therefore imperative that Indigenous Peoples and Local Communities are fully and effectively engaged in the development of crediting program activities and that they receive an equitable share of the proceeds.
As a second phase, the authoring organizations will continue to work together to develop additional guidance regarding corporate purchase of high-quality tropical forest carbon credits, to be completed by late 2022.
Harol Rincón Ipuchima, Coordinator of Climate Change and Biodiversity, COICA-Coordinator of Indigenous Organizations of the Amazon Basin said: “The Coordinator of the Indigenous Organizations of the Amazon Basin – COICA as part of the authoring team of the Tropical Forest Credit Integrity Guide for Companies. greets the successful completion of the document, which includes important aspects for an effective participation of Indigenous Peoples. Indigenous Peoples and Local Communities worldwide play a very important role for the conservation of forests and mitigation of climate change, and it is time that we are recognized as partners, not only beneficiaries. This guidance is a first step in the right direction.”
Dr. M. Sanjayan, CEO of Conservation International, said: “We are already seeing soaring demand for carbon and with it the unlocking of unprecedented capital for protecting and restoring tropical forests. As we work to scale carbon markets to the speed needed to avoid climate breakdown, we cannot afford to compromise on quality or accountability; this work will only be as impactful as it is meticulous and credible. Even as markets evolve, one thing will always remain true: The best way to keep that carbon out of the atmosphere is working in partnership with local communities to develop durable, context-specific solutions.”
Angela Churie Kallhauge, Head of Impact, Environmental Defense Fund, said: “The science tells us we must halt and reverse tropical forest loss to achieve the Paris Agreement goals. Living ecosystems are critical carbon stocks and if we lose them, they cannot be recovered in the timeframe needed to tackle climate change. We know companies want to invest in tropical forest protection and have the resources to do it – but it can be hard for them to navigate the large, complex carbon credit marketplace. It is for this reason that our groups have come together to help companies identify tropical forest credits that have high social and environmental integrity.”
André Guimarães, Executive Director at the Amazon Environmental Research Institute (IPAM), said: “We need forests to remain standing to cope with the climate change challenge in the coming decades. Carbon markets shall play a role in stimulating native forest protection, although under very high standards of control and monitoring. In this context, the jurisdictional approach has several advantages. It allows for greater control over large forest areas and governance over deforestation and it enables the creation of robust monitoring, reporting, and verification systems. It also provides the implementation of safeguards to ensure the social participation of indigenous peoples and local communities and a fair and equitable sharing of benefits. There is no doubt that the guide’s recommendations to improve the quality of tropical forest carbon credits for the Amazon forests will increase the demand from the private sector for credits from forests.”
Jennifer Morris, CEO, The Nature Conservancy, said: “Reducing tropical deforestation is crucial to a 1.5C pathway, but current policies, programs and projects are insufficient to achieve the necessary scale. Corporate purchases of high-quality tropical forest carbon credits, in conjunction with credible decarbonization plans, can play a critical role in incentivizing and financing the transition away from deforestation. This guidance, created in partnership with eight major environmental and Indigenous Peoples organizations, lays out the foundational pathway for corporations to ensure their purchases and investments are transparent, high-quality, and impactful for both the climate and communities.”
Todd Stevens, Executive Director of Markets, Wildlife Conservation Society, said: “WCS is encouraged by the outcomes of this guidance and the implications for forest conservation. We believe it will be useful for companies to see how projects and jurisdictional programs can be mutually reinforcing in helping to deliver the significant climate mitigation action needed to meet our Paris Agreement goals and support corporate net zero commitments.”
Frances Seymour, Distinguished Senior Fellow, World Resources Institute, said: “Corporate demand for high-quality forest carbon credits can help drive needed improvements in the environmental and social integrity of carbon credit supply. WRI welcomes the TFCI Guide’s recognition of the need for a rapid transition to jurisdictional-scale accounting and crediting, with a near-term emphasis on protecting the forests we still have. Demand for such credits can encourage governments to take actions to end deforestation that only they can perform, such as recognizing the land tenure rights of Indigenous Peoples, enforcing the law, and shifting fiscal incentives toward forest protection.”
Fran Raymond Price, Lead, WWF Global Forest Practice, said: “We see an unprecedented opportunity in the demand for nature-based solutions to drive needed benefits for people, nature and climate. But this will only be possible if we are diligent about the quality, transparency, equity and inclusivity of the interventions necessary to achieve transformation at scale. It is a real breakthrough for these organizations to come to a mutual agreement on what this looks like on the ground. However, this is one piece of a puzzle that needs to be completed. Companies must adopt science-based targets, address their footprints, and commit to supporting high-quality interventions with integrity and accurate claims so we can realize a 1.5 degrees Celsius world.”
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