FOREST-based carbon projects that avoid emissions from deforestation are an increasingly important part of Malaysia’s climate and environmental protection strategy. This aligns with growing international demand for carbon credits from high quality, avoided-emissions projects. However, disinformation from those ideologically opposed to market-based climate solutions risks making the climate and environment crises much worse.
Deforestation around the globe is a major cause of greenhouse gas emissions, but when conservation projects are designed well, they not only deliver climate benefits but also drive inward investment into social development and biodiversity protection.
No one working in the forest-conservation carbon space will claim it is a perfect system – there are always improvements that can and are being made – however, the calls from some NGO-and-media partnerships to block carbon markets entirely as a funding source for environmental protection are based on opposition to markets and a mixed economy, and not based on credible scientific consensus.
The need for scrutiny
As an earlier contributor to The Star warns (“The fall of the forest-based carbon offset: A cautionary tale for Malaysia”), credits from forest projects should always be treated with caution. But this caution should be to ensure that they stand up to scrutiny from professional, science-based commentators to ensure they deliver measurable climate benefits; and that they provide tangible positive impacts for local communities and biodiversity.
Independent scrutiny of projects that generate carbon credits, whether through expert watchdogs or investigative journalism, plays an important role in the checks and balances in the market. Done right, with rigour, balance, good faith, and fairness, it can expose underperforming projects, identify weaknesses in industry standards, and call out cases of greenwashing.
But articles based on inaccuracies and half-truths can destroy the chance for environmental conservation and alleviation of poverty in rural communities.
Blurring of fact and fiction
Too often in recent years, high profile media attacks on forest carbon projects have been based on misleading and inaccurate information, and driven by those diametrically opposed to the use of carbon credits and the voluntary carbon market. Far from improving climate mitigation and forest protection, this spread of disinformation masks the positive impacts on the ground. What is worse is that no viable alternatives are offered.
To take the example used by a previous commentator, in 2023, the voluntary carbon market space was rocked by a rapid flurry of articles from international media, including Die Zeit and the Guardian. The headlines proclaimed indictments like 90+% of forest projects were worthless and that the companies using the credits were failing to deliver the climate benefits they had claimed. These headlines are factually incorrect.
They were based on analysis that only applies to unplanned deforestation (ie illegal logging, fires, etc) and not to projects avoiding planned deforestation, such as logging concessions, like the Kuamut Rainforest Conservation Project in Sabah.
Crucially, though, the conclusions journalists made did not match with the analysis in the underlying scientific studies. Moreover, experts in forest carbon analysis have published detailed rebuttals that highlight serious flaws in the papers used by the journalists ("Serious errors impair an assessment of forest carbon projects: A rebuttal of West et al”, Social Science Research Network, 2023). The original authors have still yet to respond to the rebuttals, suggesting their conclusions cannot be substantiated.
Building integrity
In the aftermath, some risk-averse brands did make public statements vowing to avoid the use of carbon credits in their net zero efforts. They have pulled support for proven climate actions like protecting threatened forests, and it is unclear whether anything else is being done in its place.
However, a growing number of international companies recognise the importance protecting nature plays in climate mitigation, as well as the need for the private sector to step in to support it.
The market for avoided emissions credits from protected forest projects is maturing rapidly, with an expanding network of initiatives to ensure high-quality. Programmes like the Voluntary Carbon Market Integrity Initiative, a multi-stakeholder platform comprising stakeholders from the Global North and the Global South – including civil society, academia, government, business and other relevant initiatives focused on high-integrity – are setting rules for credit buyers.
The Integrity Council for the Voluntary Carbon Market has established the criteria for what constitutes a high-quality credit. Independent ratings agencies are providing third-party expert assessments of project credibility. And the establishment of auctions for high-quality credits is bringing the market to new clients.
Meanwhile, Verra and other leading international carbon credit standards – all of which recognise the importance of avoided deforestation projects – are in a continual process of review and improvement to the methodologies, as the science evolves.
Carbon priorities
For any chance of limiting average global warming to below 2°C, the priority must be to halve industrial and fossil fuel emissions every decade to 2050. For countries and companies, this requires enormous effort and investment to aggressively cut emissions from operations and supply chains. There is no question that stripping the burning of fossil fuels from our economies is one of our most critical priorities.
But, as the Intergovernmental Panel on Climate Change Report has stated, decarbonising energy, industry, and transport alone will not get us where we need to be. We must also leverage natural climate solutions (NCS), which means transforming land use, reinventing farming, and scaling-up carbon storage and sequestration in existing ecosystems, like forests, wetlands, peatlands, and grasslands.
NCS are a set of tools that can help re-invent how we value and interact with nature. Historically, forests have only been valued in terms of what can be extracted. Around the world, this has resulted in widespread logging, industrial agriculture, the spread of urban areas, and the elimination of 420 million hectares of trees, or 12 times the size of Malaysia, since 1990.
Carbon credits generated for the voluntary carbon market are one proven means of rebalancing this devastation. By putting a value on avoided emissions or sequestered carbon, a standing and intact forest might outcompete the financial incentive to cut it down and convert it to some other use.
There are conditions and caveats. On the buyer side, the purchase and retirement of credits must not come at the expense of aggressive and rapid scope 1, 2, and 3 emissions cuts [which are ways of classifying climate-warming greenhouse gas emissions by companies]. Credits should be used to counter those emissions that cannot currently be abated, or for beyond a company’s value chain.
It is important to understand the need to put a price on emissions from corporate activity. Buying credits is not an easy ride for companies, there is a cost, and every company has teams of people whose role is to cut costs. If companies reduce the need to buy credits, they will do this by cutting emissions.
That businesses are following this rule should never be taken for granted, but a highly credible body of research has shown that companies, which retire credits from the voluntary carbon market, are typically those that are also doing most to cut emissions from their operations and supply chains ("New research: Carbon credits are associated with businesses decarbonising faster", Ecosystem Marketplace).
Stopping what would have happened
On the project side, a carbon credit must represent one tonne of avoided or removed carbon dioxide (or equivalent greenhouse gas emission), and the project developer must demonstrate additionality (preventing what would have happened to cause emissions had the project not intervened), as well as a list of other prerequisites, such as permanence, minimising and accounting for potential leakage, etc.
Credits from forest projects like the Kuamut Rainforest Conservation Project are recognised as valid because they have demonstrated a measurable climate benefit. This particular project, which we are involved in, was established to prevent emissions that would have been generated by the industrial logging operation that was scheduled to take place in that forested area. The precise calculations and data for how the credits were generated are publicly available for anyone who wishes to examine them in the project’s technical documents.
Not only has the project been validated and verified against the leading international standard, but it has also been independently scrutinised and assessed as being among the highest quality in the market by the leading global ratings agencies.
The first generations of wind turbines and solar panels were highly inefficient – critics argued that they would never be a viable alternative to fossil fuels. Over time, with continuous improvement and innovation and, importantly, support from the voluntary carbon market, their quality has improved beyond many people’s expectations and are now frequently outcompeting coal, oil, and gas. This is the prize with forest protection and natural climate solutions.
Scrutiny should be used to improve how we drive down climate change and protect the environment. It should not be weaponised to promote inaction.
IVY WONG ABDULLAH
Permian Malaysia
DAVID STONE
Permian Global
Permian Global channels private sector carbon finance into projects that protect and regenerate threatened tropical forests.
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