What to think of California’s new Tropical Forest Standard

This topic will be discussed at the Global Landscapes Forum Luxembourg on 30 November.

With carbon-absorbing tropical forests vital to limiting global warming, California has approved a new carbon offset standard aimed at keeping such forests in place. The Standard is the latest initiative from the U.S. state positioned as a global leader in action against climate change and could be a game-changer in carbon finance efforts. But critics caution it could also undercut climate action.

Passed in a 7–4 vote in September by the California Air Resources Board (CARB), California’s Tropical Forest Standard provides a framework for integrating measures to protect tropical forests around the world into emissions-reduction efforts from the state’s governments, NGOs, civil society groups and industry.

This includes potentially weaving investment in tropical forest sustainability into the state’s pre-existing cap-and-trade program – a profit model that incentivizes industry to limit and reduce emissions quickly – which is one of the largest and most effective of its kind in the world.

But for now, the Tropical Forest Standard is essentially a guiding document for developing carbon sequestration programs.

“The Standard does not recognize individual projects but lays out best practices, cultural and regulatory considerations for a program that CARB considers to be the best model available,” Dave Clegern, a spokesperson for CARB, said by email. To build that model, the agency drew from existing efforts by the United Nations, the World Bank and others.

The resulting guidelines are intended to be rigorous, to generate market value for keeping forests intact, and to provide a model for carbon finance going forward. The framework includes such measures as:

• The use of funding from offsets for reforestation efforts;
• The participation of Indigenous and forest communities in the development of guiding principles and sustainable land management; and
• Independent third-party verification of progress toward restoring forests beyond an initial benchmark.

The framework includes public transparency and enforcement but has not given concrete details of how that will occur.

But critics caution it could also undercut climate action. “The big polluters don’t have to change their emitting activity, and already there is an over-supply of carbon credits,” says Kathleen McAfee, a professor of international relations at San Francisco State University. “This makes the price to pollute very low, and without an adequate cap on the amount of emissions allowed they can keep spewing carbon into the atmosphere.”

Leakage, where carbon-intense activity is simply pushed to less regulated regions lacking oversight, is also an issue. There needs to be a greater focus on accountability and on development of carbon-neutral activities, says McAfee.

Yet many leading environmental groups including Conservation International, The Nature Conservancy, Earth Innovation Institute and the Governors’ Climate and Forests Task Force uphold the Standard and pushed for its adoption. In a letter of endorsement of the Standard to CARB, scientists from around the world stated it would “establish a very high bar of methodological rigor, transparency and accountability for tropical forest jurisdictions – states, provinces, counties and even nations – that are taking steps towards low-emission development.”

The scientists particularly hailed the Standard’s approach to forest conservation by changing practices at the jurisdictional level of governance, affecting larger geographical areas and populations than project-based approaches can often achieve.

At stake is the health of the world’s remaining tropical forests and their ability to help limit the impact of climate change, as well as the future existence of the many forms of life they hold. Tropical forests in Latin America, for example, are home to roughly half of the carbon stored in all tropical forests, with Brazil home to roughly 61 billion tons (an amount equal to all of sub-Saharan Africa’s carbon). But these forests are quickly disappearing; 2018 alone saw the loss of a Belgium-sized swath of rainforests.

Already, tropical forests are the world’s third-biggest carbon emitter (after China and the U.S.) due to deforestation and degradation. When forests are harmed, they release their stored emissions, in turn contribute to rising temperatures worldwide with cascading repercussions from firestorms to flooding to drought. Ensuring that remaining tropical forests stay standing and able to serve as carbon sinks is at the center of ongoing international efforts.

Carbon finance could be a key part of this process, but its potential remains largely untapped. Improved management of forests and agricultural lands make up 30 percent of the solution to climate change but receive less than 3 percent of climate financing.

California sees the Tropical Forest Standard as a way to grow the carbon finance sector and incentivize action. One analysis finds the Standard could generate up to USD 1 billion in tropical forest restoration activities. Large international conservation groups and Indigenous rights organizations in Central and South America have also supported the framework, as have many leading scientists and technical experts. But underscoring the divisiveness of the issue, other scientists and Indigenous leaders have pushed back against California’s guidelines.

McAfee added that more needs to be done to address key drivers of forest loss, particularly in food systems such as cattle ranching and soy and palm plantations. She also advocated for land rights for Indigenous groups to provide more legal standing and protection against large-scale agribusiness.

“To date, no one has proposed such offsets as California is proposing,” says Douglas Hale, a senior economist now retired from the U. S. Energy Information Administration. “However, a working system of offsets could make CO2 control less expensive and perhaps allow for fewer worldwide emissions. So, the push for offsets will not go away.”