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High Forest, Low Deforestation Areas: Perspectives from the Voluntary Carbon Market

Report

Global

Publication date: July 30, 2024

File format: pdf

View resource

This report explores how the voluntary carbon market can equitably finance High Forest, Low Deforestation areas, highlighting integrity challenges, risks, and market hesitations. It identifies pathways to strengthen claims, improve confidence, and support Indigenous Peoples and Local Communities while protecting critical carbon‑rich forests.

Subject Tags

  • Natural climate solutions
  • Forest
  • Climate mitigation
  • Indigenous Peoples
  • Community-based conservation
  • Carbon markets

Overview

This report examines how High Forest, Low Deforestation (HFLD) areas—jurisdictions, countries, or Indigenous territories with high forest cover and historically low deforestation—fit within the Voluntary Carbon Market (VCM). Although these regions store vast amounts of irrecoverable carbon, support biodiversity, and are home to millions of Indigenous Peoples and Local Communities (IPLCs), they have received little climate finance because traditional carbon markets reward reductions from areas facing imminent deforestation.

The study synthesizes 30 interviews with carbon market practitioners across NGOs, standards bodies, intermediaries, jurisdictions, corporates, and TNC staff. It identifies major concerns about HFLD credits, including additionality, fungibility, integrity, and the broader VCM confidence crisis. Participants expressed mixed views on whether HFLD should be financed through the VCM, Results‑Based Payments (RBP), or both.

Key themes shaping market hesitancy include:

  • lack of clarity on allowable corporate claims (compensation vs. contribution/BVCM) 
  • concerns about shifting finance away from high‑risk deforestation areas 
  • confusion from evolving VCMI and SBTi guidance 
  • the need for endorsement from standards or integrity bodies 
  • the disconnect between NGO priorities and private‑sector incentives

The report concludes that HFLD credits will require clearer methodologies, stronger integrity safeguards, transparent benefit‑sharing for IPLCs, and alignment with existing standards before widespread market acceptance is likely.