Climate Action Reserve: Mexico Forest Protocol
The Climate Action Reserve began as the California Climate Action Registry and was created by the State of California in 2001 to address climate change through voluntary calculation and public reporting of emissions. California’s Air Resources Board, responsible for implementing the California cap-and-trade programme, has adapted the Reserves’s Forest Project Protocol to create a Compliance Offset Protocol for US Forest Projects. Reserve offsets from certain domestic forestry projects are also eligible for early action crediting under California’s cap-and-trade programme.
In 2013, the draft new Mexico Forest Protocol (MFP) was released, which focuses on enhancements (i.e. the “+” side of REDD+). The initial release of the draft MFP followed 14 months of meetings, consultations, and conference calls among an expansive list of Mexican and non-Mexican stakeholders including non-governmental organisations (NGOs), government agencies, project developers, and landowner representatives. The current draft was developed with a vision toward seeking synergies with a standard being developed in Mexico (Norma Mexicana (NMX) para el desarrollo de proyectos forestales de carbono) that will create an infrastructure for all forest project activities. The Reserve is currently partnering with various agencies, NGOs, and communities to develop pilot projects to field test the protocol prior to its general release.
The Reserve’s MFPis designed to be versatile such that it could be adapted for use within sector-based crediting systems (when developed in Mexico) for use in the compliance market.
Enhancement activities including Reforestation, Improved Forest Management, Agroforestry, and Urban Forestry.
Project baselines are developed to reflect a conservative estimate of business-as-usual practices and are determined through analysis of current forest conditions and indicators of threats to forest cover. Baselines must conform to legal constraints and financial constraints. Baselines do not include trends of forest carbon declines as, in Mexico, avoided emissions accounting will be conducted through jurisdictional frameworks. The crediting period for project baselines is 25 years and can be renewed indefinitely.
Additionality is a requirement of the MFP. Projects must demonstrate that emissions removals would not have otherwise occurred in a conservative business-as-usual scenario. The protocol includes a legal requirement test, such that GHG reductions or removals must be above and beyond any GHG reductions or removals that would result from compliance with any federal, state, or local law, statute, rule, regulation, or ordinance and a risk-based performance test indicating that the project goes beyond business-as-usual as defined in the protocol.
Leakage is managed through a standardised accounting of ‘secondary effects,’ including activity shifting and a standard deduction for market leakage in harvested wood products (20% of difference in harvested volume between baseline and project scenario). Additionally, landowners must monitor vegetation shifts throughout their ownership to ensure sustainable management in areas not directly associated with project activities.
Permanence is defined as 100 years (following the last issuance of offset credits for emissions reductions or removals from the project); therefore monitoring and verification activities must be maintained for at least 125 years (i.e. 100 years of monitoring and verification beyond the 25 year crediting period). The protocol allows for ton year accounting which recognises the temporal value of carbon out of the atmosphere. Credits are issued based on the portion of the 100-year permanence period landowners are able to secure the sequestered carbon. Recognizing that both natural and human-induced reversals can occur, forest owners are required to identify and quantify the risk of reversals from different agents based on project-specific circumstances. The resulting risk rating determines the quantity of Mexican Climate Reserve Tons (MCRTs) that the project must contribute to the Reserve Buffer Pool to insure against reversals. Unintentional reversals are mitigated through the Climate Action Reserve’s buffer account (i.e., MCRTs are retired from the buffer account to cover such reversals). Intentional reversals (e.g., those caused by overharvesting for period in which the credits are secured through contractual agreement) must be compensated for by the project owner through the required retirement of MCRTs.
Projects on communally owned land must adhere to requirements that address free, prior, and informed consent to the project, proper meeting notification, participation, and documentation, and project governance. The protocol provides guidance for how project concepts are presented to the community, along with a discussion of costs and benefits associated with the project and the process for project approval by the community. Requirements exist to ensure the occurrence of periodic meetings, that those meetings are noticed, that opportunities for participation exist for all participants, and that the meetings are documented. Additionally, the MFP includes requirements for project governance, including the establishment and succession of a project coordinator, to assist in project administration and oversight.
The protocol has a goal that project activities will sustain and/or enhance forest ecosystem functions. All projects must promote and maintain native forests that, when managed, are comprised of multiple age classes and mixed native species. Projects must maintain or increase inventories of live and dead trees over time and do so using a variety of native tree species. The entire project area, including areas outside of activity centers, is monitored with criteria to ensure the composition of mature forest structure is maintained or is increased. Lastly, all areas identified as high conservation value stands must be conserved during the project life.
The protocol requires that each time the project is verified, evidence must be presented that the project is in compliance with all relevant laws and regulations.
The protocol defines monitoring and reporting requirements. Monitoring activities consist primarily of updating a project’s forest carbon inventory and analysing the inventory for compliance with environmental safeguards and policies on reversals. The inventory must be reported annually, using a custom and standardised data management tool developed by the Climate Action Reserve. The tool provides a user-friend template for data entry, has embedded analytics which facilitates project monitoring, reporting, and verification. Projects are issued credits based on data from annual monitoring reports and only require verification if inventory reports exceed tolerance thresholds for normal annual forest change. Site verification is required at the project initiation and at regular 5-year intervals.
CAR administers the listing, reporting and verification of the MFP. Credits issued to projects using the protocol are registered and tracked on the CAR’s registry system which ensures the integrity of credits issued through market transactions including retirement.
Mexican Forest Carbon Projects must undergo a site verification at the project initiation and site verification every 5-years hence. Verification activities are designed to ensure all protocol requirements are upheld. Site verification is designed to be efficient and robust and includes a random inspection of individual inventory plots and standardised statistical analysis.
Verification teams must include at least one forester with a degree in forestry. A Forest Project is considered automatically terminated if the Project Developer chooses not to report data and undergo verification at required intervals.