On 19 September 2019 the California Air Resources Board (CARB) approved the Tropical Forest Standard (TFS), a set of criteria intended to serve as a model for assessing offset crediting programs that reduce emissions from deforestation.

California has been considering how offsets from tropical forestry might be used in a market-based program for about a decade. The move paves the way for national or subnational jurisdictions to link forestry offsets to California’s Cap-and-Trade program as well as other mandatory and voluntary markets around the world, although CARB would still need to approve their use for compliance in the system. CARB has explicitly cited the potential for TFS-aligned programs to supply the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

TFS marks the first government-enacted international standard that applies to large, sector-based tropical forestry programs at the jurisdictional level. California officials have stressed TFS’ wide applicability by setting minimum requirements for a robust, replicable model to serve GHG mitigation programs as well as sustainable commodity supply chains and other initiatives.

Final rules specify the standards subnational and national implementing jurisdictions need to follow for approval by California or other programs that endorse TFS. The rules also specify methodological requirements for measuring reductions and crediting. Key eligibility criteria include:   

  • Reference level: Reductions must be measured against historical emissions in the implementing jurisdiction over a consecutive 10-year period. The reference level should be based on the annual estimate of total native forest area cleared and consistent with IPCC methodologies.

  • Crediting baseline: To ensure the additionality of sector-based offsets, implementing jurisdictions are required to establish a baseline that begins at least 10% below the reference level and declines to the jurisdiction’s 2050 GHG emissions target for forestry.

  • Leakage: Implementing jurisdictions are required to include a framework and mechanisms for addressing and accounting for carbon leakage from the forestry sector, including by demonstrating how economic activities that drive deforestation have been replaced with more sustainable activities or how practices have been improved.

  • Social and environmental safeguards: Implementing jurisdictions have to demonstrate inclusion of relevant stakeholders, including indigenous populations, as well as consistency with the UNFCCC Cancun Agreement and Governors’ Climate and Forests Task Force Guiding Principles.

  • Permanence and reversal risk: TFS requires jurisdictions to calculate a risk-reversal factor from which credits will be deducted and placed in a buffer pool equal to at least 10 percent of total credits issued per year. This is to ensure reductions that are reversed through leakage and other activities do not endanger the environmental integrity of the credit. Emissions reductions have to endure for at least 100 years.