A new study from Yale University is raising fresh doubts about one of the voluntary carbon market’s most popular and heavily funded mechanisms, finding that government-level forest carbon credits may systematically reward places that were already headed in the right direction, while shutting out the forests that need help most.
The paper, published in the Proceedings of the National Academy of Sciences (PNAS), focuses on jurisdictional REDD+ programs, a United Nations-backed approach that credits entire governments, rather than individual landowners, for reducing deforestation across their borders.
The model emerged as a supposedly more credible alternative to project-based credits, which have long been criticized for funding forest protection that wasn’t actually under threat.
But the Yale team argues that jurisdictional programs carry their own structural vulnerabilities, particularly in how baselines, or the estimates of how much deforestation would have occurred without the program, are calculated.
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The researchers found that jurisdictions already experiencing declining deforestation can potentially earn credits without implementing new policies, while places where forest loss is rising—often the most urgent cases—may be discouraged from joining because they would need to dramatically cut deforestation before qualifying for any credits.
The study also identified a troubling pattern in enrollment timing: in roughly half the jurisdictions analyzed, deforestation rose temporarily just before the crediting period began, then fell afterward—a dynamic the researchers describe as “anticipatory moral hazard.”
The stakes are substantial. One of the major jurisdictional REDD+ registries, ART TREES, now has more than $3 billion in committed credit purchases, with buyers including Amazon, Walmart, and Salesforce through the LEAF Coalition.
“There’s billions of dollars of commitments, but there hasn’t been that much evaluation of what those credits are going to look like, their potential, and the strengths and weaknesses of the program,” said Luke Sanford, study co-author and assistant professor at the Yale School of the Environment, as cited by Earth.com.
To address the baseline problem, the researchers propose dynamic baselines calculated after the crediting period ends, based on deforestation trends in comparable jurisdictions, thus reducing the ability of participants to optimize their behavior around a known benchmark in advance.
“I’m optimistic that better understanding those incentives can help inform the design of more credible carbon markets, especially as jurisdictional REDD+ continues to grow and evolve,” the other co-author Alberto Garcia was quoted as saying.
The central message is not that jurisdictional REDD+ is broken beyond repair, but that how a baseline is drawn may ultimately determine whether billions of dollars protect real forests or simply make the numbers look better.
Read more: In A New Deal, Microsoft Buys Forest Restoration Credits From Rainforest Builder
