GenZero Climate Summit: REDD+ Can Scale but Permanence and Demand Concerns Persist, Says Panel
The voluntary carbon market’s shift from project-based REDD+ to jurisdictional programs is a sign that forest carbon can scale, but challenges over permanence rules and the lack of strong corporate demand continue to limit growth, panelists said Monday at the GenZero Climate Summit.
“We have cases where REDD+ projects and jurisdictional programs have been investable,” said Andrea Bonzanni, director of International Policy at the International Emissions Trading Association. “Scale is not there yet. We are walking when we should be running. But I think things are moving in the right direction.”
The appeal of jurisdictional approaches lies in their broader scope of accounting for emissions and removals at a national or subnational level rather than within a project boundary. However, panelists said the shift to jurisdictional scale brings new complications, especially around how host countries set rules to reflect national circumstances and whether that flexibility can coexist with the interoperability buyers and investors need.
Panelists identified two factors behind the sluggish demand. The first is media scrutiny of credit quality, which rattles corporate confidence in nature-based offsets. The second is the Science-Based Targets initiative’s or SBTi’s unfavorable posture toward carbon markets, particularly nature-based solutions, putting a structural dampener on corporate purchasing.
As SBTi sets the dominant framework for corporate climate commitments, its reservations have effectively translated into a de facto ceiling on buyer participation.
Panelists said there are early signs of recovery as carbon credits carrying higher ratings from third-party agencies or the Integrity Council for the Voluntary Carbon Market’s Core Carbon Principles label are attracting more market interest. However, they see the improvement as a flight to quality rather than a broad demand recovery.
Jurisdictional REDD+’s cost structure positions it as one of the more viable options for voluntary buyers in the near term, even as compliance frameworks represent the more durable long-term destination for forest carbon.
“We are seeing compliance markets having demand that is more stable and generally fetching higher prices than in the voluntary market, but I think REDD+, because it has the potential to generate large volumes of credits at relatively lower costs — it would be one of the preferred options for a purely voluntary demand,” Bonzanni said.
OPIS last assessed REDD+ Vintage23 at $10.08 per metric ton on May 15.
—Reporting by Sang Ah Lee, slee@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com