Integrity challenges in carbon markets: Comparing UNFCCC and voluntary REDD+ verification in the Amazon Biome

Carbon market integrity issues, such as leakage, double counting, and over-counting of reductions, lead to reputation, conversion, and carbon credit invalidation risks of market mechanisms. This study identified the risk factors for carbon markets by comparing the verification methodologies for emission reductions of the UNFCCC, Verra, and Gold Standard (GS). The verification methodologies for high-profile Reducing Emissions from Deforestation and Forest Degradation Plus (REDD+) projects were analyzed, targeting the Amazon biome, which holds the largest carbon credits from REDD+ projects. We used Brazil's 2024 submission of the Forest Reference Emission Level and the REDD+ project descriptions of Verra and GS. Based on the Code of Practice and Core Carbon Principles, this study found that the baseline, leakage, and carbon pools are the main elements affecting the quality of carbon credits. The UNFCCC uses a results-based approach, subtracting current emissions from historical emissions, whereas Verra and GS use a business-as-usual approach, subtracting projected emissions from a baseline scenario. While the UNFCCC considers national emissions to prevent leakage within a country, Verra and GS exclude the estimated leakage near project sites from their reductions. Based on these results, this study estimated the carbon stocks for deforested and degraded areas in the Amazon in 2021 to be 910,900,983 tCO₂eq for UNFCCC; 757,123,531 tCO₂eq for Verra; and 817,150,150 tCO₂eq for GS. To ensure integrity within carbon markets, we suggest standardizing verification bodies’ methodologies, using results-based reduction methodology, establishing project sites in legal jurisdictions, and calculating carbon pools in emissions consistent with the host country's data.