COP28: Bolivia unveils large REDD+ project, deal with standard

Quantum Commodity Intelligence – An avoided unplanned deforestation (REDD+) project in Bolivia has been officially announced at COP28 in the UAE, instantly becoming the world's largest such scheme following a decision by the Latin American country to choose registry Verra to certify the carbon in its forests.

REDD Project Territorio Indígena Originario Campesino in Bolivia (VCS3506) is currently in the final stages of approval by the US-based standard, nearly 15 years after Australian entrepreneur Himanshu Dua and his Bolivian partner Miguel Rockholt started working on the scheme with local actors.

VCS3506 will span an area of 3.5 million hectares, equivalent to 9% of Bolivia's standing forests – assuming a conservative definition of what a forest is – with the potential to expand to 10 million hectares eventually.

In comparison, the largest forest projects in the voluntary carbon market currently span a few hundreds of thousands of hectares, although several million-hectare projects are in preparation in the Congo Basin in Africa and elsewhere in Latin America.

The project currently covers five communities – called Tierras Comunitarias de Origen (TCO) – but plans to expand to 19 eventually.

VCS the preferred standard

A recent memorandum of understanding (MoU) signed by Bolivia and Verra means that the US-based registry will now work to integrate the country's forests into its new jurisdictional REDD+ methodology and is an official recognition by Bolivia that it has chosen the Verified Carbon Standard (VCS) for future developments.

This, Himanshu Dua said, means the project will operate from the start on a "jurisdictional" scale, meaning that it will cover an entire region of the country in one of the world's most active deforestation frontiers, one of very few such schemes worldwide.

There is hope among conservationists that nested and jurisdictional REDD+ can have a much larger impact on standing forests than historical, smaller schemes, with fewer issues of leakage, when the demand for timber moves elsewhere, and permanence.

"We've been working on this project for a substantial length of time," said Dua.

"I initially started investigating this opportunity back in 2009. As you know from the documentation, the start date is 2018, but we've been working very hard with the Bolivian government to gain their support and collaboration for this project," he said.

Evo Morales, the left wing politician who was in charge of the country between 2006-2019, was against carbon trading, but the new government changed its stance in 2020 following Luis Arce's election to the presidency and the nomination of David Choquehuanca to the position of vice president (VP).

At COP28, the Bolivian negotiator threw a spanner in the works during the second week by calling for a "moratorium in the functioning of markets" and bracketing the entire Article 6 text for carbon trading, however, sources in Bolivia said the negotiator's position is not widely shared in government.

Earlier this year, Bolivia also signed a letter of intent with the Leaf Coalition to sell jurisdictional REDD+ credits.

But Quantum understands the VCS project is the country's priority right now and Leaf said that "progress towards an emission reductions purchase agreement is not as advanced as with other governments".

Reputation is everything

Green Carbon Ventures, Dua's company and not to be confused with a Japanese company called Green Carbon, said it has worked hand in hand with the Council of the Indigenous Peoples of Bolivia (CIDOB) to define a funding model that fits local habits.

From the start, CIDOB was involved to educate and consult with communities participating in the project, while Bolivia's park authority (SERNAP) has facilitated regular contacts with local Indigenous groups along the rivers that criss-cross the area.

In Bolivia, more than 300 indigenous territories have been recognised by the state, spanning a quarter of the national territory, and unlike in most regions of the Amazon, they are the legal owners of the carbon in their forests.

Deforestation in the Bolivian Amazon is mainly caused by cattle ranching and small-scale agriculture linked to migration by 'intercultural' communities, which were recognised by former president Evo Morales, as well as commercial logging.

"The agricultural development, and hence deforestation in Santa Cruz (one of the areas involved), does not follow any similar path to other tropical countries of the region, and it is characterised by productive, high value and profitable agricultural land use," said the project's design document, seen by Quantum.

"Yet, the agricultural frontier development involving both small and medium and large-scale producers has, since the two last decades, led to an exponential process of deforestation," it added.

To curb forest loss, VCS3506 has increased patrolling in the region and worked to educate TCOs on sustainable farming activities.

So far in 2023, forest loss in the Monte Verde area (a TCO) linked to the "bush fire season" has amounted to an estimated 10,000 hectares, down from the 50,000 to 100,000-hectare range in previous years after the project said it invested in monitoring tools, such as drones.

The company said it has used a conservative emissions baseline – the metric against which carbon credits are calculated – and that it has involved ratings agencies from the start to understand future risks, a common phenomenon among developers after strong criticism of REDD+ emerged this year.

Dua said: "We're extremely careful about the reputation of this project, we understand that everyone's going to say it's the biggest.

"Verra said to us, you can do this but we prefer you do it this way. So I've said to Verra...we'll make changes, we'll feed it through our auditor, and we'll get a change for you.

"So we're not out there to maximise the number of credits and have the highest number of tonnes per hectare. We're out there to get the right amount. We know it's a big project. We know it's financially attractive."

Once the project is verified by Verra under the VCS, the developer plans to apply for the Climate, Community & Biodiversity (CCB) standard, which helps boost the price of carbon credits, and it is already working on reforesting some patches of forest.

In time, VCS3506 expects to transfer to Verra's jurisdictional REDD+ baseline, which was approved just before CO28 in late November.

"It's our full intention to transfer the project onto that at the right time," said Dua.

"Let's get through this first stage first under VM0015 (the methodology used currently) and convince everyone of the quality of what we're doing and then we'll move forward to switch to that methodology."