The Gold Standard Land Use and Forests Framework
The Gold Standard Foundation was established in 2003 by the World Wildlife Fund (WWF) and is a certification standard for both voluntary and compliance markets such as the Clean Development Mechanism (CDM). Historically, the Gold Standard has focused on renewable energy and energy efficiency but, in an effort to work towards a landscape approach to greenhouse gas emission reductions and sequestration, it has recently branched out to the land-use and forest sector. The newly established Gold Standard Land Use and Forests Framework (v.1) was released in November 2013 and includes rules for three different land use and forest activities. Its new afforestation/reforestation (A/R) requirements were circulated for consultation in May 2013 and finally adopted in August 2013, and its requirements and methodologies for Agriculture and Improved Forest Management are still under development.
In 2012, the Gold Standard signed a memorandum of understanding with the Forest Stewardship Council (FSC) and Fairtrade to support its expansion into the land-use and forests sector. The Gold Standard A/R methodology, originally developed to promote A/R projects under the Kyoto Protocol’s Clean Development Mechanism (CDM), forms a core part of the Gold Standard A/R Requirements, which also include additional rules to match the Land Use and Forests Framework and the Gold Standard Foundation’s high-level principles.
The Gold Standard can be considered a “boutique” standard. In 2012, it had a small market share of about 0.1% but attained some of the highest average prices of about US$ 11.4 per tonne. Through 2015, sixteen projects have been validated and one verified, all in the agriculture, forestry and land-use (AFOLU) sector.
The A/R requirements of the Gold Standard Land Use and Forests Framework currently apply to afforestation, reforestation, natural re-vegetation and agroforestry projects and do not apply to avoided deforestation (RED) projects. New rules and requirements are being developed under the Land Use and Forestry Framework to include improved forest management (IFM) and Agriculture (Agr.) projects.
Project-level. The Gold Standard Land Use and Forests Framework has been developed to address sustainability at the landscape level. In practice this means that once the rules and requirements have been developed for the full set of supported forest and land use activities (A/R, Agr. and IFM) then multiple activities can be certified across a designated landscape under one project.
Under the Gold Standard A/R Requirements the baseline is established by calculating the sum of carbon stocks on the eligible planting area prior to planting. Carbon pools include above and below ground tree and non-tree biomass.
The Gold Standard A/R Requirements provides two options for demonstrating additionality. The first option is to use the CDM A/R additionality Tool which includes conducting a (i) barrier analysis, (ii) investment analysis, and (iii) common practice analysis. The second option is to ensure that the project complies with the Gold Standard Positive List, which lists minimum requirements that needs to be met in order to demonstrate the additionality of the project.
All project activities with a potential impact on leakage are to be accounted for under the Gold Standard A/R Requirements. Market leakage is not accounted for.
Leakage causing activities (drivers) are to be accounted for including: collection of wood (firewood, charcoal etc.), agriculture (crop cultivation, shrimp cultivation etc.), timber harvesting, and livestock grazing. Depending on the activity chosen different formulas for calculation are implemented. Inter-ecosystem leakage must also be considered, particularly for landscape scale activities.
The Carbon Performance section of the A/R Requirements lists a number of compensation activities that project owners can undertake to make up for any leakage or event causing a reduction in the project carbon stocks in relation to the number of issued CO2-certificates over time. This includes replanting forests, planting of new areas, or purchasing Gold Standard credits from other projects (which can be from other project types such as renewable energy). In the interim period whilst carbon stocks are being restored an equal amount of credits will be put ‘on hold’ from the Gold Standard Compliance Buffer to cover the gap and ensure the integrity of the standard and all of its issued CO2 certificates.
A 20% compliance reserve contribution is required across all Gold Standard Land Use and Forestry projects to be allocated to the Gold Standard Compliance Reserve. In the event of non-compliance or a temporary disturbance affecting the total carbon stock of the project, the buffer pool will be used the balance any permanence issues or reversal risks.
The principle of Free, Prior and Informed Consent (FPIC) needs to be applied across all Gold Standard project activities. A local stakeholder consultation process should be carried out during the initial project design phase in accordance with the A/R Requirements, in order to ensure local participation and success of the project. During this process appropriate safeguards and sustainability indicators are identified and these are to be measured and monitored throughout the project.
Project developers must have uncontested land title for the duration of the project and have all land, timber, and carbon rights. In cases where the project developer does not own all rights, evidence must be presented that the respective owner of the rights consents to the project for the project’s lifetime.
The Standard requires project developers to carry out a ‘do-no-harm’ assessment which contains minimum safeguards in regards to the rights of indigenous peoples, members of local communities and workers. No explicit safeguards mention benefit sharing beyond the creation of employment opportunities. Potentially negative social impacts must be mitigated, and the project must not lead to the involuntary resettlement or displacement of people. Employers must ensure workers have a safe and fair labour environment and that labour rights are respected and protected in accordance with the fundamental International Labour Organisation (ILO) conventions, even if these have not been ratified by the host country.
Negative environmental impacts are to be mitigated and net ecological impacts to be positive. The introduction of exotic species is forbidden unless a detailed research and analysis can be provided demonstrating that the species will not be invasive. Clearing forests or draining wetlands for plantations makes project activities ineligible. Negative impacts on soil erosion, nutrient availability and water quality and quantity must be mitigated. Additionally, a 15 meter buffer must be established surrounding all water courses using native species. The Standard also requires identification of all IUCN red list species present in the project area and evidence that they will be protected. Positive biodiversity impacts are to be enhanced and negative aspects to be mitigated. At least 10% of the project area must be identified and managed as a high conservation value area or a protected area following the High Conservation Value (HCV) approach, which considers areas of both environmental and socio-economic or cultural importance. Plantations should be planted in a mosaic and connected through buffer zones and corridors to enable habitat connectivity and enhance biodiversity.
The Gold Standard requires all project owners to be compliant with the requirements and procedures of the Standard. This includes compliance with all relevant national laws, the Gold Standard Principles, and for project owners to meet their obligation to maintain the project carbon stock during the crediting period.
In addition to FPIC and the initial local stakeholder consultation process, a mechanism for continuous dialogue and for solving grievances must be agreed to by stakeholders at the beginning of the project. The Input and Grievance Mechanism allows for continuous feedback throughout the lifetime of the project. At least three methods for input and grievance expression must be established. This could be via the internet, telephone, or written down in a specific input and grievance book. A fourth and optional option is to nominate an independent mediator, who will be selected by the project developer in agreement with the local stakeholders. Any recorded input and grievances, including actions taken, are reported in the ‘Annual Report’ which is uploaded to the Gold Standard Registry and sent to interested stakeholders.
In order to increase awareness about project performance in terms of safeguards and co-benefits, project developers are required to monitor and list identified social, economic and environmental impacts and discuss how to improve these with stakeholders. Any negative impacts must be addressed and positive impacts should be worked towards in collaboration with stakeholders. Information about safeguards and mitigation measures are then reported annually in the ‘Sustainability Monitoring Plan’, which is submitted to the Gold Standard Secretariat.
Independent certification bodies validate and verify the project against socioeconomic, environmental and governance safeguards. The Gold Standard A/R Requirements can be used as a standalone standard for creating credits, or can be combined with certification schemes such as the FSC or Fairtrade.
The Gold Standard’s approach to Monitoring and Reporting is quite detailed. Project owners are required to report on carbon as well as social, environmental and economic outcomes that can be measured and verified against the requirements of the Standard. These are reported on annually in the ‘Sustainability Monitoring Plan’. Additionally, project developers are required to report on all project activities, compliance and any feedback or grievances in the ‘Annual Report’ which is to be submitted on an annual basis after the initial certification has been completed. Monitoring certifications should occur at least every five years.
The Gold Standard Registry is the operating system to administrate project information and issue CO2 certificates. It is operated by the company Markit under the guidance of the Gold Standard Secretariat.
The first step in creating Gold Standard A/R offset credits is an initial pre-validation desk review, known as the ‘pre-feasibility assessment’, conducted by the Gold Standard Secretariat to determine whether the project is likely to satisfy Gold Standard regulations. This is different than many other standards in which a pre-validation is carried out by an independent verification/validation body (VVB). Following a successful pre-validation the project becomes ‘listed’ as a Gold Standard project. The project developer then submits the project for initial certification by a VVB and the Gold Standard Secretariat and key stakeholders (i.e. Gold Standard NGO supporters active in the host country of the project or internationally) carry out a review of the VVB’s certification report. Once all necessary corrections have been completed the project is ‘registered’ as a Gold Standard project. The initial certification is followed later by a monitoring certification (or performance certification) to verify emission reductions and removals, to be completed at least every five years.
In order to address the issue of up-front finance the Gold Standard allows for credits to be issued after each certification. After the initial certification a project can issue the expected amount of emission reductions as ‘Validated CO2 certificates’, which will be reviewed by an independent verifier to confirm that the expected number of CO2 certificates is realistic and conservatively calculated. These can be sold to a buyer as an expected verified CO2 certificate. Validated CO2 certificates cannot be retired and must first be verified. Credits that are issued after reductions have been confirmed can be sold and retired as ‘Verified CO2 certificates’.