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commented
1 year ago NCX response: Short-term credits are a way to accelerate near-term climate action and to greatly increase the supply of carbon credits. Given the rapidly increasing demand for carbon credits, we expect that there will still be demand for long-term projects for landowners who prefer those options. Landowners are free to enroll in whichever programs fit their objectives.
Commenter Organization: WWF-US
Commenter: Brad Schallert
2021 Deferred Harvest Methodology Section: No Section Indicated
Comment: Tonne-Year accounting: Verra has proposed “tonne-year” accounting as a means of allowing AFOLU carbon projects of various durations (as few as 1 year) to enter the market and claim long-term (100 year) 2 “permanence”. The method establishes an equivalency ratio between the impact of short-term action (such as harvest deferral) versus long-term, multi-decadal climate impact. The approval of tonne-year accounting in Verra’s program may lead to enrollment of new landowners unwilling or unable to enroll in long-term carbon sequestration commitments. It is also likely to lead to an abandonment of landowners enrolling in programs that require a longer commitment. The concept as it stands is highly debated (e.g., Lesage et al. 2012; Korhonen et al., 2002; Jørgensen and Hauschild, 2013; Kirschbaum 2003). While it has been suggested by some, there is also a strong body of literature questioning the approach and cautioning that its validity is highly dependent upon the specific assessment method and assumptions therein (e.g., equivalence timeframes, discount rates, asymptotic decay of CO2, etc.). These concerns are not trivial, as recent work shows choice of these variables can affect crediting outcomes vary as much as 10-fold (Chay et al. 2022). In addition to being used as a justification for short-term project commitment periods (and as a means to avoid accounting for inevitable near-term reversals), ton year accounting also has implications for other aspects of project quality including the additionality of such an approach. Short-term commitments force the assumption that project actions (such as deferred harvest) would occur in a specific year. In reality, natural systems such as forests are managed on decadal and multi-decadal timescales. The case for additionality is bolstered when carbon sequestration commitments coincide with the long-term timeframes in which natural systems are managed. This is one reason carbon registries have traditionally required commitment periods ranging from 30-100 years for implementing such projects. While we may not be completely certain about the additionality of a management change in any given year, over a 30+ year timeframe we have significantly more confidence in the counterfactual scenario proposed by the project proponent. Although ton year accounting is a tool to quantify sequestration over a shorter commitment period, it does nothing to tell us whether that climate benefit was additional. Shorter time commitments for projects also have direct impacts on how leakage should be viewed. As mentioned, forest management and harvest yields are planned for across decades. Leakage literature suggests that any shortterm reduction in harvest volumes is easily made up for by local or regional wood consumers (see Murray et al 2003). With shorter, year-to-year commitments, leakage may be nearly 100%. Clearly, the implications of ton year accounting go beyond permanence. To that end, strong additionality tests and leakage discounts should be included in all methodologies to ensure they are sufficient for generating real, additional, conservative emission reductions and removals. In Verra’s proposed changes, it is not clear whether strong additionality tests or leakage discounts would be included. Considering this as a departure from the rigorous standards of the existing carbon market, amplified by the suggestion to allow tonne-year accounting for all AFOLU project types in the Verra project portfolio, we feel that full public disclosure and expert analysis of the proposed 3 tonne-year accounting assumptions and quantification approach is warranted in addition to ensuring additionality and appropriate discounts for leakage and uncertainty. We also request these materials be made available for public comment prior to any approval actions by Verra. Verra approving tonne-year accounting as an option for project developers without a requirement to implement additional safeguards that bolster additionality, better ensure long-term commitment to carbon storage, and manage leakage, would be a blow to the environmental integrity of the carbon credit/offset market.
Proposed Change: No Proposed Change