REDD+ Explained: How Forest Carbon Credits Are Meant to Work

REDD+ pays for forests that stay standing. The name stands for Reducing Emissions from Deforestation and forest Degradation, and the "plus" covers conservation, sustainable management of forests and the enhancement of forest carbon stocks. It entered the UN climate process in the late 2000s and is now used by national governments and by project developers selling credits. A forest credit under this framework rests on a simple idea: if a forest that would otherwise be cut or degraded is kept, the carbon it holds counts as emissions avoided. This article explains how that counting works, why the baseline decides most of the value and what buyers should check.

The baseline is the claim. A REDD+ project has to estimate how much forest would have been lost without it. That estimate, called the baseline or reference level, is built from past deforestation rates, maps of the land, the drivers of clearing such as farming, roads and settlement, and projections of how those pressures will change. The credits equal the gap between the projected loss and the loss that is actually observed. A baseline set too high creates credits for forest loss that was never going to happen. This is the main reason forest credits have been criticised, and it is why standards require the baseline to be documented in a public project description and checked by an independent validator.

Measuring the carbon in the trees. Carbon stocks are estimated from forest inventories. Field plots record the diameter and height of trees, equations convert those measurements into biomass, and satellite imagery tracks changes in forest cover. Satellites show where forest has been lost, but not how much carbon was in the trees that disappeared, so field plots are needed to calibrate the estimates. The remaining uncertainty is reported as a confidence interval, and many methodologies deduct it from the credits issued.

Leakage. If protected forest is cleared a few kilometres away, the emissions have moved rather than been avoided. Projects must estimate leakage, meaning deforestation displaced to other land by the project's activities, and deduct it from their claim. Jurisdictional programmes face a related question, because protection in one district can push pressure into its neighbours. Nested approaches, which link project-level credits to a national or regional baseline, were designed to address this.

Degradation is harder to measure. Deforestation is a clear event. Degradation, such as selective logging, fuelwood collection or fire damage, is gradual and partial. Measuring it requires more frequent field data and precise definitions of what counts as degradation. Buyers should therefore check which activity a credit actually represents, avoided deforestation, avoided degradation or restoration, rather than treating all forest credits as the same product.

Permanence and reversal. Forests burn, are cleared later or are damaged by drought and pests. Like other nature-based credits, REDD+ credits usually carry a buffer, a share of issued credits held back to cover future losses. The size of the buffer depends on the project's risk assessment. The length of the protection commitment matters just as much as the percentage, because a commitment of a few years is not the same as one that runs for decades.

Safeguards and communities. REDD+ was designed with safeguards for Indigenous peoples and local communities, and many standards require free, prior and informed consent. Projects that restrict access to forest can affect livelihoods, so buyers should look for evidence of consultation and benefit-sharing, not only carbon figures. Community standards such as CCB can be used alongside carbon standards to verify those outcomes.

What buyers should check. Five questions cover most of the risk. Which baseline is used, and is it public? Is leakage deducted? How is uncertainty handled, and how large is the buffer? Is the activity clearly avoided deforestation, avoided degradation or restoration? Who verified the project, and are the safeguards documented? A buyer should also confirm that the credit has been retired in a registry, so that the same tonne cannot be sold or claimed twice.

Where this leaves the market. REDD+ is central to forest finance and to jurisdictional deals, but its value rests on a counterfactual that nobody observes directly. A careful reading of the baseline, the leakage deduction and the buffer separates a forest that is protected from a credit that only describes one.