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Pachama
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Key Challenges and Solutions of Forest Conservation Projects
Forests are complex ecosystems that are intrinsically connected to the natural and human world, and this makes it hard to quantify the precise impact of conservation credits. As a result, some projects end up over-crediting: selling more credits (tons of carbon removed) than they truly provide.
We’ve seen some fundamental flaws in many of the currently active conservation projects, and have found that less than 30% align with Pachama’s latest Evaluation Criteria. Most of these projects don’t align due to concerns around additionality.
What is additionality?
A key concern is whether a carbon project is considered additional — that is, the emission reductions generated by a carbon project would not have occurred in the absence of that project.
Ensuring additionality is a difficult but essential step in creating a transparent and impactful voluntary carbon market, but it’s particularly complex for conservation projects.
Additionality is determined through baselines
For the most part, determining additionality comes down to calculating a project’s baseline, which describes what would happen if the carbon project never existed. Would that forest have been destroyed? How much of it? How many emissions would have been released had there been no concerted effort toward conservation?
The baseline often has the largest influence on how many carbon credits a project receives. The volume of credits issued is based on the difference between project and baseline emissions — in other words, the difference in emissions with and without a carbon project.
What makes avoided deforestation baselines so difficult to calculate is that they are counterfactuals: you’re trying to predict something that never occurred. Pachama evaluates baselines by using satellite data to observe what actually happened on the ground. We’ve found two common challenges with baselines:
Baseline challenge #1: Reference region suitability
To calculate a baseline for conservation projects, most developers select a reference region, which is similar to the project area across key environmental and social attributes, but it is not a carbon project. When appropriately selected, a reference region gives an accurate indication of the deforestation risk in the absence of a carbon project.
But not all projects select suitable reference regions. Pachama uses spatial analysis and expert scientific review to ensure that the reference region represents an appropriate proxy for the project area and its potential drivers of deforestation.
The figures below show the project area in white and the reference region in blue. The example on the left selected a reference region that is not an accurate representation of the project. They used a neighboring farm to demonstrate that the project area was at risk of conversion to agriculture, but the reference region is clearly flat and has access to roads. Meanwhile, the project area is a steep hill that is not well-suited for conversion to agriculture. In contrast, in the example on the right, the project is in a nationally protected park, and so is the reference region — making it an appropriate representation of the project area.
Figure 1. Reference region suitability.
Baseline challenge #2: Emissions accounting
To quantify the accuracy of emissions, we need two data sets: (1) a measure of forest loss and (2) an inventory of stored carbon. Both pose challenges. Detecting forest loss over the entire project area is difficult, and many developers use outdated technology and error-prone human analysis. When it comes to carbon inventories, they often rely on time-intensive manual measurements over a small sample of a project’s area or simply use data from existing literature.
Once Pachama confirms that the project used a suitable reference region in its baseline calculations, we check the baseline emissions accounting. We use high-resolution satellite data to observe annual forest loss in that reference region and then compare what we observe to what the project reported. We’re looking to ensure that the project baseline emissions are more conservative than the emissions we’ve observed. If the emissions are greater, the project could have an inflated baseline and be at risk for over-crediting.
The figures below show an example of observed forest loss and baseline emissions. The left figure shows the reference region in blue and forest loss observed by Pachama in red (lightest red is oldest, and darkest red is most recent). The right graph shows the forest loss we observed in the reference region compared to the baseline emissions that the project reported. The project predicted more deforestation in the reference region than what Pachama observed, so this project could be at risk for over-crediting.
Figure 2. Baseline Emissions
The answer to conservation crediting challenges? Better technology and smarter analysis.
Despite challenges around reference regions and emissions calculations, conservation is indispensable for the health of the planet (and humans). Companies are understandably worried about the reputational and climate risk of conservation credits. But ignoring these crucial projects is not the answer — even for companies whose business activities don’t directly impact forest loss. The planet needs conservation projects, and we can make these projects safer for buyers by using technology to ensure that individual projects make the impact they claim to.
Technology is necessary to modernize the market and drive transparent, higher-integrity conservation crediting at the scale the planet needs. Pachama’s technology assesses the true impact of conservation projects by taking an algorithmic approach to computing baselines and quantifying the uncertainty of emissions calculations. Combining the most advanced earth observation techniques with rigorous scientific analysis can give buyers far more confidence in the quality of their conservation credits.
We are entering a new era of carbon markets, where greater transparency is achieved through:
→ Satellite observations with the most advanced remote sensing and machine learning (as opposed to manual data collection).
→ Automated, standardized calculations with algorithmic baselines, giving buyers confidence intervals to improve trust in credit quality (as opposed to inconsistent, manual calculations).
→ Continuous project monitoring with interactive visuals for both carbon and beyond-carbon impacts (as opposed to static documents and little to no updates).
→ Planning new tech-enabled forest projects with the highest transparency, quality, and integrity (as opposed to projects created and managed without the power of modern technology).
How companies can include conservation projects in climate goals
We recommend companies invest in conservation efforts in a way that maximizes environmental impacts and funds the projects the planet needs most.
Here’s how we recommend companies approach conservation funding:
1. Buy only the highest quality carbon credits. Work with a trusted partner like Pachama to ensure the credits you buy are thoroughly vetted for impact, and be prepared to budget more for higher-quality credits.
2. Balance contribution with simultaneous emissions reductions. A holistic commitment to corporate climate action requires both deep emissions reductions and a contribution to climate solutions outside of your own business activities. The good news is that companies can do both at the same time — there’s no need to wait to invest in conservation. The Science-Based Targets Initiative (SBTi) includes conservation funding in its list of “no-regrets actions that companies can take now”, and recommends that companies focus simultaneously on reducing emissions and funding carbon projects.
3. Invest in projects with local community support. Dr. Rachel Engstrand, Applied Science Lead at Pachama says, “The strongest predictor of a successful conservation or reforestation project is often not the science, technology, or funding, but rather, the amount of engagement the project has with the local community,” says Engstrand. Local communities have significant influence over the long-term fate of conservation projects and can also benefit significantly from well-managed projects.
4. Go beyond carbon to develop separate climate goals for water, biodiversity, and nature. Leading companies are setting unique climate goals that stretch further than emission reductions. Microsoft has committed to protecting more land than it uses by 2025, Amazon has established a $100 million fund to restore and conserve forests and other ecosystems, and Walmart has pledged to protect at least 50 million acres of land by 2030. With their many positive effects on biodiversity, waterways, and local communities, conservation projects can be an effective mechanism for achieving non-carbon climate targets through a single investment.
A no-regrets approach to conservation
Conserving global forest ecosystems is a necessary and urgent requirement for mitigating the effects and trajectory of climate change. Nature is a complex and beautifully interconnected ecosystem, and because of this complexity, it will never be completely void of risk. But with advanced technology, buyers can mitigate their risk and capitalize on the enormous planetary and humanitarian opportunities nature offers.
The benefits and urgency of funding conservation projects far outweigh the risks. Working with a technology partner like Pachama, companies should not be afraid to invest in these critically important conservation projects and incorporate nature-based climate goals into their sustainability strategies. Ultimately, addressing climate change requires all hands on deck — and we can’t afford to wait.
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49 w
It's important if we can get world data of forests and analyze it this way to further the conservation cause.
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It feels like the technology you are using should be the baseline of all forest conservation projects!
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Very interesting, thanks for sharing
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Definetely a major plus for the environment
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Forests are a major, requisite front of action in the global fight against catastrophic climate change
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Forests help stabilize the climate. They regulate ecosystems, protect biodiversity and play an integral part in the carbon cycle.
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Thanks for breaking down what goes into choosing a carbon project! I've never thought about it like that before, and the region reference suitability section was fascinating to learn about.