Family Forest Blog

Dynamic Baselines and a Plea for Integrity

Lynn Riley, Senior Manager of Climate Science

April 10, 2024

Dynamic Baselines and a Plea for Integrity Image

Stakeholders around the globe have emphasized the critical role the voluntary carbon market can play in keeping the planet from warming beyond 1.5 degrees Celsius. At the same time, the market has experienced growing pains. The urgent demand to utilize voluntary carbon credits to reduce global emissions has created a need for innovation within standards and regulations to ensure the integrity of climate impact claims. 

With so much immediate need and a constantly evolving market, it is the responsibility of market stakeholders – project developers, institutional funders, and corporate buyers alike – to create the conditions that value, incentivize, and produce carbon credits that truly have the atmospheric impact that they claim. And the first step to this is building carbon projects from the most reliable, available, and implementable science. For two critical project types – Afforestation, Reforestation and Revegetation (ARR) and Improved Forest Management (IFM) –   after decades of scientific advancement and innovation, we know that dynamic baselines are key to building and scaling a voluntary carbon market with the highest atmospheric integrity.

Dynamic baselines are key to building and scaling a voluntary carbon market with the highest atmospheric integrity. 

High quality carbon accounting is the basis upon which we build a sound market that can scale at the pace we need to avoid climate catastrophe. Appropriate regulation, sufficient investment, and stakeholder buy-in are all meaningless if market actors cannot trust the credibility of the credits on the market. All carbon projects should rely on the most up-to-date science and carbon accounting that prioritizes the atmospheric integrity of carbon credits generated above all else.   

Dynamic baselines accomplish this task by measuring how much additional carbon is stored as the direct result of a project’s intervention compared to similar landscapes that are not enrolled in the project. The key to the dynamic nature is that this measurement is taken after the intervention, also known as “ex-post,” and then compared to independently sourced and updated data that incorporate factors that may affect both the enrolled and appropriately matched unenrolled landscapes and their baselines. By measuring landscapes in real time with real data, we can track the true difference in additional carbon captured. This is unlike traditional methodologies, which typically set one projected baseline at the beginning of a project, or with occasional updates, based on assumptions rather than reality. With dynamic baselines, if no additional carbon capture is measured on enrolled plots, the project would not issue credits. Methodologies using dynamic baselines are designed to measure the change in carbon storage more accurately than traditional methods and in turn produce much higher quality carbon credits. 

While prior accounting methods were critical innovations to get us to where we are today and are responsible for hundreds of millions of dollars in investment jumpstarting natural climate solutions and supporting rural and indigenous communities, we must be open to embracing what we’ve learned from several decades of implementation. We can’t ignore that our traditional accounting approaches have exposed projects to the risk of over-crediting, as demonstrated by several exposés and academic studies.   Methodologies and projects that were developed with first generation accounting approaches should use methodology development or revision processes as a crucial moment to improve and evolve, ideally integrating a dynamic baseline approach to their carbon accounting.  

This approach lifts up all projects, as designing for integrity is a widely recognized prerequisite to building the trust necessary for the market to scale. Adequate scaling means more projects, more climate mitigation and other co-benefits, and more income for local economies. 

If that isn’t enough of an incentive, dynamic baselines are now being used by third parties – ratings agencies, standards bodies, academics, investigative reporters, and others – to evaluate the true climate impact of projects on the market. In effect, they are becoming the de facto standard for measuring integrity. For this reason alone, it is in the standards’ and project developers’ best interest to adopt a dynamic baseline approach. 

Some may say these challenges are too hard; we say, look at what we’re already doing—the shift toward dynamic has already begun.

We say this knowing better than anyone the difficulties a dynamic baseline may cause in project implementation, and the high prices that credits from a dynamic baseline project will need to fetch to cover their costs.  What’s more, dynamic baselines are not available for every type of carbon project due to data limitations. Some may say these challenges are too hard; we say, look at what we’re already doing—the shift toward dynamic has already begun. Every signal is pointing to a future where market demand for high quality credits will be robust, and prices will increase. But that entirely hinges on trust in the market, built on the most up-to-date science.    

Every market actor has a role to play in addressing the challenges to building and scaling a voluntary carbon market that maximizes the impact of natural climate solutions. We need widespread awareness and adoption of dynamic baselines. We need investment in projects implementing the highest integrity methods. We need innovative financial solutions that allow credit buyers to prioritize atmospheric integrity while mitigating risk. We need funding for data innovations to make dynamic baselines possible in more places.  

It is imperative that we get this right; the communities that are hit first and worst by the impacts of climate change need solutions now. They are also the ones that are on the ground implementing the projects that advance conservation impact. They deserve a market that meets the needs of their lands, communities, and planet.  

Lynn Riley, Senior Manager of Climate Science

April 10, 2024

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