The Precious Forests Foundation organised a round table with the support of TEREA / ATIBT to affirm the role of sustainable forest management in climate change mitigation

The roundtable brought together experts from the private forestry sector and carbon specialists to discuss the role and place of sustainable forest management (SFM) projects in international carbon mechanisms. The ATIBT participated in this exchange, represented by two experts from TEREA, consultancy company and member of the ATIBT.

Since the Kyoto Protocol, at the origin of the carbon markets as we know them today, afforestation/reforestation projects (called "ARR") dominate, because of their obvious capacity to sequester carbon and their positive image on public opinion.

Sustainable forest management projects, on concessions already being exploited, are yet to benefit from carbon markets. Though a sustainably managed forest, in particular through reduced impact logging (RIL) techniques, allows for substantial reductions in greenhouse gas emissions compared to so-called conventional practices, while allowing the forest not to be converted to other uses, thanks its increased economic value. Moreover, according to recent studies in several tropical countries, RIL-C (Reduced Impact Logging for Climate Change Mitigation) practices can reduce GHG emissions by 51% compared to conventional practices. In Gabon, these estimates are as high as 62% if all concessions applied RIL-C practices (Ellis, 2019).

These emissions reductions could be converted into carbon credits, which could be sold on international markets to allow forest operators to finance the investments needed to change practices. Internationally validated methodologies exist and could allow the accounting and valuation of carbon credits resulting from sustainable forest management.

However, several questions arise for foresters, of a financial nature (what costs and what benefits?), technical, but also in terms of image. Indeed, compared to plantation projects, forest exploitation suffers from a negative image, or is not well known by the general public.

The Precious Forests Foundation's roundtable discussion offered directions, which may provide answers to these uncertainties:

1. Forest operators need to have a better understanding of carbon markets, prices and the costs/benefits of implementing a carbon project. They also need to understand carbon ownership issues, which are very country-specific. The use of external technical assistance (facilitators) to make the link between sustainable forest management and carbon markets appears useful.
2. There is a need to convey to the public and potential investors the fact that a sustainably managed tropical forest has economic, social and environmental benefits and plays a major role in combating climate change.
3. A fair and remunerative price for carbon credits will allow foresters to engage in these promising initiatives while being assured that their investments, sometimes important but necessary, are covered.

Other exchanges will follow this roundtable. As COP26 is on, ATIBT continues to monitor the issue of forest carbon to ensure that sustainable forestry is recognized as a major lever for climate change mitigation.

Technical considerations of an SFM carbon project

Through a recent study conducted in Gabon by TEREA and CIBOLA Partners, several sticking points were identified, directly related to the constraints of international carbon mechanisms.

1. Additionality: a carbon project must demonstrate that emission reductions would not have occurred in the absence of carbon finance. This is an issue for concessionaires who have already implemented good practices (e.g., FSC/PAFC-certified operators), before engaging in carbon projects. Their practices are already positive in terms of emissions reduction/carbon storage but cannot be valued under the carbon mechanisms because they started before the project or on a voluntary basis. This issue can be partly resolved by the choice of a suitable baseline.
2. The baseline scenario: additionality is directly linked to the baseline scenario and this will influence the possibilities of obtaining carbon credits. For example, the choice of a historical baseline (based on the emissions of a previous year, or in line with the country's political choices, eg. in the context of its climate commitments), an absolute baseline (based on the average emissions of all the concessions in a country) or an individualized baseline (specific to each concession according to the techniques applied in the past) should enable operators to better value their emission reduction efforts. Obviously, the reference scenario depends on the specific institutional frameworks defined by each State. In Gabon, for example, the obligation for all concessions to be certified by 2025 raises the question of obtaining voluntary carbon credits as the process becomes mandatory.
3. The market: some countries, notably Gabon under the climate change ordinance of September 2021, have opted for a national carbon market. Then, how can operators value their emissions reductions on the voluntary international markets? Will they have guaranteed ownership of the carbon credits?

These are all questions that need to be addressed as the international community's interest in sustainable forest management grows.

Coline Seyller, Pierre Schueller, Benoît Demarquez - TEREA

Precious Forest Foundation and Jeanne Ehrensperger – PFF