Swiss carbon credit asset developer South Pole has confirmed that it has terminated its contract with Carbon Green Investments (CGI), the owner and developer of the Kariba REDD+ project, with immediate effect.
- Amid continuing reputational criticism, South Pole has ended its relationship with the owner of the Kariba REDD+ project.
- Reports on the project had raised two key concerns: that the project overstated its baseline for deforestation, and that funds from the project were not reaching the community.
- South Pole’s cutting of ties with Zimbabwe’s Kariba project will only increase concern about the robustness of forestry carbon credits.
Kariba REDD+ was one of the world’s first large-scale REDD+ forest protection projects. Yet increasingly reporting on the project (VCS 902) implied the project may be markedly overestimating its baseline, and the carbon revenues it generates may not be reaching the project’s communities.
In January 2023, South Pole, who were involved in the development and is the main seller of credits from the project, announced the suspension of sales of unsold credits from current vintages (2019-2021), the combined sold and unsold issuance of which account for ~24% of the project’s total credit issuance to date.
As a spokesperson from BeZero Carbon said at the time: “This is an extremely rare event.” South Pole has now confirmed it is no longer involved in the project but says that the carbon credits sold to date will maintain their validity, irrespective of South Pole ending its contract with CGI.
On 16th October 2023, carbon standard setter Verra said it had launched an investigation into the project, and the credits it issued, following the publication of a New Yorker article The Great Cash for Carbon Hustle.
A Verra spokesperson said: “At Verra, we are deeply disturbed by the allegations in this piece. Many of the details reported in this article are new to Verra and were only learned upon publication of the article. “
Communication between project owner and carbon credit sales the problem?
Despite materially complying with the relevant Verra and Climate, Community & Biodiversity standard requirements at all stages of the project, South Pole said they were “disappointed with aspects of how the project was managed on the ground by the project owner. We have learnt from this experience and are proactively implementing stronger controls and processes.”
A spokesperson added: “Kariba REDD+ is a pioneering and challenging project that has demonstrated the possibilities of large-scale forestry protection projects, from which governments can learn when developing national forest protection schemes.
“We are not confident that the project meets the high standards we expect from our partners all over the world. It is with great sadness that we have come to this conclusion, since we also believe that the Kariba REDD+ project sought to bring benefits both to the communities it supports and the forest and biodiversity it protects.
Why was the contract terminated?
According to South Pole, the termination followed careful consideration of the project, issues involved, and allegations that have been raised publicly. All activities related to carbon certification and carbon credits from the Kariba REDD+ project will now be the responsibility of CGI, and South Pole’s role as the carbon asset developer has ended.
One of the challenges that has been repeatedly raised is the lack of clarity around avoided deforestation programmes. The REDD approach is based on a counterfactual scenario; it is an approach that seeks to prevent something from happening. The calculation of emission reductions that result from this work is inevitably less clear-cut than in other cases and it can be difficult to distinguish between poor understanding and deliberate misrepresentation.
While South Pole says it is terminating its contract with CGI, it says it continues to believe in the significance of the Kariba REDD+ project for local communities, large-scale forest protection, and local biodiversity. It is important to mitigate any disadvantages to the project’s beneficiaries emerging from the termination of this contract.
As such, the company said that should any Zimbabwean authorities wish to draw on South Pole’s technical support for a period of time to help Kariba REDD+ transition under the country’s new national carbon regulations, South Pole is open to considering this. In the meantime, the project is expected to keep operating within Verra’s requirements and safeguards.
South Pole made clear that management is well aware of the scrutiny that both the project and the wider voluntary carbon market is currently under. For these reasons, South Pole has, for over a year, been working on enhancing its group-wide quality control and due diligence processes.
The company said: “A dedicated team has been redesigning our Quality Assurance system, which includes conducting annual quality control reviews for all projects. These reviews include periodic risk assessment, management, and corrective action planning. South Pole’s latest Quality Assurance framework and quality risk reporting are aligned with latest guidance from the Integrity Council for the Voluntary Carbon Market (ICVCM). Specifically for REDD+ projects, internal baseline monitoring will now happen every three years, surpassing the current Verra requirement of every six years (previously, every 10 years). These improvements reinforce South Pole’s commitment to working towards the highest market standards at all times, as they continue to evolve and improve.”
SGV Take
The REDD+ (Reducing Emissions from Deforestation and Forest Degradation) project is one of the world’s largest forest conversation schemes but it is facing increasing criticism over the baselines set by developers. As clarity about the intensity and immanence of the climate crisis increases, there is a growing demand that any approach to offsetting emissions growth show an enhanced focus on rigor, scale, and impact.
Stories like this simply undermine the credibility of the voluntary carbon markets, and support concerns that companies are using it as a means of greenwashing. This is something that the sector, and the world, cannot afford.
