[Paper Review] Action needed to make carbon offsets from tropical forest conservation work for climate change mitigation

Thales A. P. West, Sven Wunder+5 more|arXiv (Cornell University)|Jan 5, 2023

Economic and Environmental Valuation23 citations

TL;DR

The study uses synthetic controls on 27 tropical forest conservation projects across six countries to show offsets often fail to reduce deforestation or match claimed baselines, highlighting the need to revise baseline methodologies.

ABSTRACT

Carbon offsets from voluntarily avoided deforestation projects are generated based on performance vis-à-vis ex-ante deforestation baselines. We examined the impacts of 27 forest conservation projects in six countries on three continents using synthetic control methods for causal inference. We compare the project baselines with ex-post counterfactuals based on observed deforestation in control sites. Our findings show that most projects have not reduced deforestation. For projects that did, reductions were substantially lower than claimed. Methodologies for constructing deforestation baselines for carbon-offset interventions thus need urgent revisions in order to correctly attribute reduced deforestation to the conservation interventions, thus maintaining both incentives for forest conservation and the integrity of global carbon accounting.

Motivation & Objective

• Assess whether carbon-offset projects from tropical forest conservation actually reduce deforestation compared to ex-ante baselines.
• Test the validity of baselines used to claim avoided deforestation through counterfactual analysis.
• Evaluate the reliability of ex-post deforestation reductions attributed to conservation interventions.
• Identify methodological improvements needed to preserve incentives for forest conservation and carbon-accounting integrity.

Proposed method

• Use synthetic control methods to infer causal effects of forest-conservation projects on deforestation.
• Compare ex-ante baselines with ex-post counterfactuals derived from observed deforestation in control sites.
• Across 27 projects in six countries on three continents, assess whether claimed deforestation reductions hold.
• Contrast project baselines with observed deforestation to isolate true effects of interventions.
• Highlight discrepancies between claimed reductions and empirically observed outcomes.

Experimental results

Research questions

• RQ1 Do tropical forest-conservation projects produce measurable reductions in deforestation relative to their ex-ante baselines?
• RQ2 Are the claimed avoided deforestation amounts reliably attributable to the conservation interventions when tested against ex-post counterfactuals?
• RQ3 How accurate are the methods used to construct deforestation baselines for carbon-offset interventions?
• RQ4 What revisions are needed in baseline methodologies to maintain forest-conservation incentives and carbon-accounting integrity?

Key findings

• Most projects did not reduce deforestation.
• For projects with observed reductions, the magnitude was substantially lower than claimed.
• Baseline methodologies for carbon-offset interventions require urgent revisions to correctly attribute reductions to conservation actions.