AFF’s IFM methodology can now be used for reductions and removals credit labeling. What does this mean for us, the market, and the planet? 

Key Takeaways:

• Verra’s revised VM0045 – the methodology co-developed by AFF and partners that’s used for the Family Forest Carbon Program – became the first of their improved forest management methodology to enable the differentiation between GHG emissions reductions and carbon dioxide removals in credit labeling.

• Distinction between credit types is critical to reaching the global climate goal of keeping our planet from warming beyond 1.5 degrees Celsius. Both credit types are needed, but their sequencing and application have implications for our overall success in avoiding climate catastrophe.

• Beyond the scientific argument for credit type distinction, the market is demanding it. Credit buyers and standards bodies alike are emphasizing the need for more clarity and direction to scale climate solutions at the pace we need to reach our global goals and help the decarbonization of our global economy.

• As climate science evolves, methodologies that align project implementation to that science must evolve with it. This methodology revision is a welcome step toward building a consistent, science-driven approach to scale a strong voluntary carbon market.

Last week, carbon crediting standards body Verra announced the revision of their carbon accounting methodology, VM0045 Methodology for Improved Forest Management Using Dynamic Matched Baselines from National Forest Inventories, to enable projects using it to differentiate between Verified Carbon Units (VCUs) based on greenhouse gas (GHG) emission reductions and VCUs based on carbon dioxide removals. This is the first of Verra’s improved forest management (IFM) methodologies to be revised to allow for the distinction of credit types.

AFF, in partnership with experts at Verra, TerraCarbon, and The Nature Conservancy, originally developed the methodology as the first of its kind to use a matched dynamic baseline to measure the additional carbon captured and stored as a result of improved forest management practices within a carbon project. This new revision comes as the IPCC, the EU, SBTi and others have emphasized the importance of developing removals as part of strategies to limiting warming to 1.5 degrees Celsius.

The experts behind the methodology worked collaboratively to develop and submit a suggested formula to determine the distinction between reductions and removals, which was ultimately incorporated into Verra’s revised VM0045 methodology. The biggest challenge in this process was coming up with an approach grounded in credibility and rigor that is also immediately actionable in the market. After workshopping several approaches, including those already expertly validated and in use by IFM methodologies from other standards bodies, and how they align with the latest definitions of removals and reductions provided by Verra, ICVCM, and IPCC, the resulting approach was selected and implemented in the revision of VM0045.

So, let’s break down what this really means, and why it matters.

What are reductions and removals?

In the world of high-integrity carbon markets, there are several distinctions between the types of credits that carbon projects can generate from their interventions on the ground. One such distinction is the distinction between emissions reductions and carbon dioxide removals. This distinction has grown in importance since the International Panel on Climate Change (IPCC) released their 2022 report that emphasized the need for – and distinction between – both reductions and removals in order to avoid climate catastrophe. Since then, agreeing upon the scientific process of distinguishing between the two, and the practical market application of each, has been a topic of intense discussion within the climate mitigation community.

A GHG emissions reduction is an action that reduces the amount of emissions of greenhouse gases into the atmosphere as a result of a project’s intervention. An example of this would be hanging your clothes out on a line to air dry instead of using your drying machine, hence reducing the amount of greenhouse gases that would be emitted into the air by electricity use to run the machine. As a result of using a clothesline instead of the dryer, less greenhouse gases are in the atmosphere.

A carbon dioxide removal, or CDR, is an action that actively removes carbon dioxide that is already in the atmosphere. In our laundry example, this would mean planting a tree outside your laundry room to capture and store the carbon that is emitted by your drying machine, among other things.

Why is this distinction important?

A balanced amount of carbon dioxide is essential to creating a livable climate for all living things on our planet. It’s like finding the right number of blankets for sleeping. Too little, and we get too cold. Too much, and we get too warm. Current levels of carbon in the atmosphere are more than what creates a sustainably livable condition; in other words, we have too many blankets on already. While emissions levels are continuing to rise – we are still adding more blankets.

If the goal is to have fewer blankets (less carbon in the atmosphere), it may seem like this distinction shouldn’t matter. Whether we keep from adding another blanket or remove an existing one, the net atmospheric impact is the same: one less blanket (carbon in the atmosphere) than there would have been. However, distinguishing between GHG emissions reductions and CDRs is critical because the role of each and the timing of each within overall climate policy is different.

In the short term, we need to focus on reducing emissions. For example, we want to first prevent the deforestation of tropical ecosystems through emissions reductions. But in the long run, we know we’ll also need to remove existing carbon from the atmosphere to stabilize the climate.

To meet our global climate goals, we need to stop adding blankets (reduce emissions) and remove some blankets we’ve already put on (remove carbon dioxide). The challenge is that carbon removal technologies require years or decades of lead time. For example, planting a forest takes years to grow and generate significant carbon removals. This makes investing in our capacity to remove carbon today critical for scaling the amount we need in the future.

However, building this capacity without also prioritizing emission reduction will not work; it will only mean we need even more removals to take off the mounting pile of blankets. The IPCC’s report states that we must rely on both emissions reductions and removals if we have any chance of meeting the Paris Agreement goals. Especially when dealing with dynamic ecosystems like forests, both reductions and removals are needed to work in tandem to ensure the credibility of each and maximize the climate mitigation potential of nature-based projects.

What does the market say?

Aside from the scientific significance of the distinction between emissions reductions and CDRs, market regulations, prices, and demand are all crucial pieces to this puzzle. Public and private regulatory and standards bodies within the market have called for this distinction, and many have begun issuing guidance for market actors (credit buyers and project developers alike) to navigate the practical application of emissions reductions and CDRs. In addition to the IPCC’s assessment calling for a distinction, the Science Based Targets Initiative (SBTi) recently released guidance that requires participating companies to use only removals to compensate for unaddressed emissions once they have reached their net zero target year, but encourages them to address unabated emissions on the road to net zero with a mix of reductions and removals.

The point is that key actors in the marketplace have decided it’s important to distinguish between reductions and removals and have asked the registries to label credits appropriately.  What buyers and other actors do with those labels may differ, but the importance of the distinction is now a fact of the emerging carbon market – and it’s on the project developers to do the best they can in conforming to those expectations for the sake of scaling the use of nature-based solutions to avoid climate catastrophe.   

What’s next?  

As the latest science and guidance around CO2 removals and GHG emission reductions evolves, methodologies that align project implementation to that science must evolve with it. This methodology revision is a welcome step in that direction and joins similar methodological approaches in building a consistent, science-driven approach to scale a strong voluntary carbon market. AFF and the team that crafted this revision are committed to following the latest global science, and are always open to new understanding and innovations, and revising our methodological approaches to what makes the most sense.  

We appreciate Verra’s commitment to a robust and transparent methodology revision process, and meeting market expectations based on the latest science. AFF is currently undergoing its first validation and verification process for its Family Forest Carbon Program – Central Appalachia project, and will be seeking removal and/or reduction labels for credits issued in line with this methodology revision. Those interested in learning more about this revision and/or the Family Forest Carbon Program can visit www.familyforestcarbon.org.