State of the Mechanism

One fact defines the status quo of today’s voluntary carbon market: supply of forest carbon credits far outstrips demand — view figure below (2). The number of unclaimed credits generated by current REDD+ projects does not lend itself to the idea that the voluntary mechanism can be scaled up based on carbon offsets alone. However, recent scholarly work and private-sector interest has suggested a potential response to this disparity: the incorporation of new revenue streams based around the more rigorous quantification and monetization of other economic and social benefits that are prone to occur within forest carbon credit programs (3). These benefits – including biodiversity conservation, provision of fresh water, local community economic development, and empowerment of women – have historically been considered tangential to, and subordinate to, carbon sequestration.

supply demand

Indeed, the REDD+ mechanism was envisioned as a climate change solution focused on preventing release of carbon dioxide to the atmosphere, not as a solution to multiple social, economic, and ecological problems. However, REDD+ project developers have a keen interest in attracting investors and buyers to their projects, and must therefore determine whether opportunities exist to quantify and sell co-benefits.