Unmasking 'Phantom’ Carbon Credits in Thailand: A Genuine Answer to Climate Change or Chimera?

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Unmasking 'Phantom’ Carbon Credits in Thailand: A Genuine Answer to Climate Change or Chimera?

As the world intensifies its efforts to curb greenhouse gas emissions, Thailand is at the forefront, promoting the rise of the voluntary carbon credit market. This initiative has become a pivotal mechanism for meeting the greenhouse gas reduction goals outlined in the Paris Agreement.

Carbon credits have become a prominent approach in combating climate change, providing an opportunity for both the private and public sectors to participate and benefit financially.

In Thailand, the Thailand Voluntary Emission Reduction Project (T-VER) serves as the primary platform for carbon credit trading, adhering to the national standards. Remarkably, from 2016 to 2022, the trading volume of carbon credits soared by 144%, along with a 131% increase in purchase prices.icon1

The most sought-after carbon credits in Thailand are linked to forestry projects, commanding a record high of 2,000 baht per tCO2e*—nearly tenfold higher than that of other types, such as bioenergy or solar energy projects, and achieved in under seven years.

Note: tCO2e refers to metric tons of carbon dioxide equivalent, a standard measure for quantifying the reduction or absorption of carbon dioxide emissions from various carbon reduction activities.

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This significant increase in prices for forest-based carbon credits reflects the worldwide demand for such market instruments. These projects offer long-term credit opportunities and provide additional benefits to buyers, such as enhancing their eco-friendly reputation among consumers.

However, forest-based carbon credits have come under scrutiny with concerns about them turning into “phantom” carbon credits. Critics argue that while these credits are more beneficial to the buyers, they fall short in effectively reducing global warming. They also raised concerns about the adverse effects on local communities with limited negotiation power.

This raises a critical question: Are Thailand's heavily promoted forest-based carbon credits a real solution to climate change, or just an inflated supply of credits that fail to address the global warming crisis adequately?

What are carbon credits?

Carbon credits serve as permits for polluters, allowing them to release a specified amount of carbon dioxide, commonly referred to as “carbon.” These credits, quantified in metric tons of carbon dioxide equivalent (tCO2e), are purchased to compensate for actual emissions and can be traded or exchanged.


Carbon credits are primarily derived from two types of projects: firstly, projects aimed at reducing greenhouse gas emissions, such as the use of alternative energy sources, and secondly, those that concentrate on absorbing greenhouse gases, such as through reforestation.

How effective is carbon pricing in reducing greenhouse gases and mitigating climate change?

Imposing a price on carbon through a market mechanism assigns a cost to emitting carbon, effectively deterring pollution. This approach incentivizes polluters to lower their greenhouse gas emissions.

Currently, Thailand's approach to carbon credit trading is confined to the voluntary carbon market, lacking additional carbon reduction mechanisms like carbon taxation or emissions quotas, which are prevalent in some other countries.

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Uncovering the surplus: Are forest projects overproducing carbon credits?

In forest-based projects, carbon credits have often been perceived as a lucrative opportunity, enhancing the reputation of those who initiate them. As a result, numerous projects of this type have emerged. According to the World Bank, about 54% of all newly registered carbon offset projects worldwide in 2022 were related to forest and land-use. The Guardian report suggested that credits attract purchases from major companies like Disney, Shell, Gucci, and others.

A UC Berkeley study highlights that forest-based carbon credit projects might be producing an overabundance of carbon credits or “phantom credits.” This issue arises when projects overstate their greenhouse gas emission reductions. Not only do they fail to effectively tackle climate change, but they might actually worsen the situation. Ticon2he reason lies in the fact that carbon credits from these projects, intended to offset emissions, may not lead to anticipated reductions.

The study also points out that forest-based  projects, particularly those aimed at preventing deforestation (REDD+ projects), are most likely to generate excess credits. These projects focus on conserving existing forests to maintain their carbon sequestration capacity. However, the report found that only one in 13 such projects was deemed legitimate, with the majority unable to effectively prevent deforestation. Most struggled with precise calculations, which results in excess carbon credits.

Excess carbon credits in voluntary markets: Complicating the path to climate targets

Carbon credits are traded through two main market mechanisms: the mandatory and the voluntary carbon markets, each with differing impacts on achieving greenhouse gas reduction targets.

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In the mandatory market, governments set emission limits and allow companies to purchase carbon credits as compensation to offset their emissions. This “cap-and-trade” system legally requires participants to reduce emissions.

On the other hand, the voluntary market lets polluters buy and sell credits without legal emissions reduction obligations. This flexibility allows them to choose credits from various beneficial projects, such as increasing green spaces or promoting community livelihoods, which in turn enhances their public image.

Global studies show that mandatory carbon markets, with well-functioning controls, significantly aid in meeting greenhouse gas reduction goals. Experiences from several countries suggest that voluntary markets, on the other hand, often fail to effectively reduce emissions and are prone to manipulation, especially in forest-based REDD+ projects, which are notorious for generating excess or phantom credits.

What is the current status of the carbon credit market in Thailand?

Since 2021, Thailand has intensified its climate action efforts by aiming for carbon neutrality by 2050 and achieving net-zero greenhouse gas emissions by 2065. Additionally, the country has established an intermediate goal to reduce greenhouse gas emissions by 40% from 2021 levels by 2030.

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Currently, the most significant development in Thailand's carbon market is the voluntary carbon credit trading under the Thailand Voluntary Emission Reduction (T-VER) standard. The market is overseen by the Public Organization for Management of Greenhouse Gas Reduction (PO-GR), or P.O., which is responsible for registering and certifying the volumes of carbon credits produced by environmental projects. The market has been active since 2014.

At present, entities interested in buying or selling carbon credits in Thailand can directly negotiate prices and conduct transactions, choosing carbon credits from projects that align with their interests.

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What types of forestry projects are generating carbon credits in Thailand?

As of September 20, 2023, Thailand's Forests and Green Areas (FOR) projects comprise 49 out of 350 registered projects under the Thailand Voluntary Emission Reduction (T-VER) program, representing only 14% of all registered projects. These FOR projects are estimated to contribute a total of 118,915 carbon credits, equivalent to just 0.7% of the total carbon credits generated within T-VER projects, highlighting their relatively small contribution.

In this regard, focusing solely on projects with specified greenhouse gas reduction methodologies, particularly those identified as reforestation initiatives excluding agriculture, under the Forestry and Agriculture Project (FOR) scheme, a total of 48 projects are identified as exclusively forest-related. 

In Thailand, the FOR projects certified under T-VER are categorized into four types, each utilizing unique methodologies for reducing greenhouse gases:

  1. Sustainable Forestry Plantation (T-VER-METH-FOR-01)
  2. Reducing GHG Emissions from Forest Degradation and Enhancement of Carbon Stocks (P-REDD+) (T-VER-METH-FOR-02)
  3. Large-scale Sustainable Forest Plantation (T-VER-METH-FOR-03)
  4. Rapid Economic Forest Plantation (T-VER-METH-FOR-04)
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Among these projects, P-REDD+ projects emerge as the most prominent, encompassing 24 projects. The documentation of the PO-GR indicates that these projects are primarily focused on forest restoration. They include a range of activities such as preventing deforestation, combating forest degradation, and enhancing carbon sequestration capabilities within forested areas.

Notably, the largest projects in terms of size among all Forests and Green Areas projects are affiliated with the Mae Fah Luang Foundation in Nan province. Registered in 2018, these projects cover over 105,868 acres and are estimated to sequester approximately 176,704 tCO2e/year.

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It is important to note that 19 of the P-REDD+ projects are managed by the government through the Royal Forest Department, while 18 projects are community-owned. Additionally, 19 projects are joint ventures between the Royal Forest Department and the Mae Fah Luang Foundation. These entities play significant roles in the development of P-REDD+ projects, often working in partnership with local communities.

Identifying high-quality carbon credits: What are the crucial features?

The use of carbon credits to offset greenhouse gas emissions is a globally recognized method  for addressing the urgent and severe issue of global warming. To ensure the effectiveness of this approach, there is a concerted effort to prevent the creation of excess "carbon credits" that do not genuinely help to mitigate climate change. This has led to a growing focus on monitoring and verifying the “quality” of carbon credits, to avoid the loss of valuable resources and missed opportunities for urgently needed solutions.

So, how can we assess the "quality" of carbon credits? Carbon Offset Research and Education (CORE), in collaboration with the Stockholm Environment Institute (SEI) and the Greenhouse Gas Management Institute (GHGMI) – organizations dedicated to monitoring greenhouse gas management – have defined the "quality" of carbon credits as the "level of confidence that buyers can have that the carbon credits effectively offset greenhouse gas emissions, as opposed to self-driven reductions." They have established criteria for what constitutes high-quality carbon credits as follows:

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Examining the nature of carbon credits in Thailand’s forest projects in Thailand: will they generate "high-quality" or "excessive" credits?

"To bolster confidence in the quality of carbon credits obtained from T-VER projects – essential for planning and implementing greenhouse gas reduction initiatives, as well as calculating, tracking, and verifying emission reductions and/or carbon sequestration – it is vital to adhere to six key principles. They include relevance, completeness, consistency, accuracy, transparency, and permanence." - T-VER Project Development Handbook (Excerpt).

By following the Standard T-VER Project Development Guidelines, which are currently the most comprehensive and widely adopted in Thailand, we can assert that the principles and criteria of T-VER correspond, to some extent, with the "high-quality" carbon credit guidelines outlined by CORE*.

*Note: In practice, the conditions for Standard T-VER projects that align with wth CORE's definition of "high-quality" carbon credits may be more extensive than what is discussed in this article. However, the focus is on the explicit criteria and conditions outlined in the T-VER Project Development Guidelines by the TGO, which provides a preliminary basis for observation.

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Exceptions that could lead to excess carbon credits

In examining the exemptions within the Standard T-VER project conditions, we uncovered intriguing aspects related to carbon credit projects, especially those in the forestry sector, particularly activities aimed a “Reducing emissions from deforestation and forest degradation reducing deforestation and forest degradation (REDD+)”. These exceptions could potentially raise concerns about the risk of generating excess carbon credits. Let's delve deeper into these issues.

Exceptions - not required to add anything

In principle, high-quality carbon credits should originate from projects that effectively offset carbon emissions through tangible reductions compared to existing levels. However, under the Standard T-VER criteria, some certain projects have been exempted from the necessity to  demonstrate additionality, resulting in their placement on the "Positive List."

The Positive List classifies exemptions by project size. Micro and small-scale projects are fully exempt regardless of their type. However, large-scale projects in the ‘forestry and green spaces’ and ‘agriculture’ categories receive immediate exemptions, while other types of projects are required to present additional technological evidence.

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This implies that certain types of projects, such as REDD+ projects, particularly those located in areas already protected by community forest laws or national forest conservation regulations, might have the potential to generate excess carbon credits.

Exceptions allow for prior project initiation

Under the T-VER guidelines, any project aspiring to achieve Standard T-VER status must either not have commenced yet or be a project that started its greenhouse has (GHG) reduction activities dating up to three years prior to  the final approval date of the Project Design Document (PDD). Additionally, it must provide documented evidence of its start date. However, there is an exception for projects categorized under "Deforestation and Greenhouse Gas Absorption in the Forestry and Agriculture sector."

In P-REDD+ forest projects where no trees are present, carbon credits can be calculated within two years from the date of the last approved PDD and its verification, with no need for a specified project start date. For projects in forested areas, credits can be calculated immediately upon completing a baseline study, provided that it is accurate and complete. 

This raises a question: Could such a method lead to the potential creation of excess carbon credits?

Climate change and global warming: an urgent environmental crisis

The ongoing shifts in climate conditions and the rise in global temperatures represent pressing environmental issues that require immediate action.

In the quest to mitigate these issues, carbon pricing mechanisms and carbon offsetting through carbon credit trading have emerged as tools to motivate diverse stakeholders to engage in action. However, these well-intentioned efforts may not always produce the intended outcomes and could inadvertently lead to adverse environmental impacts. This becomes especially relevant if there are loopholes that allow for the generation of phantom carbon credits, an issue that has been observed in several countries worldwide.

Our concern should extend beyond the sheer volume of certified carbon credits. It is the quality of these carbon credits that matters in addressing environmental issues due to global warming.

Initiatives like REDD+ forest conservation may offer benefits to conservation and support for forest-dependent communities. However, compromising the quality of carbon credits due to existing conditions can lead to wasted resources and missed opportunities for effective investments. This scenario can also unintentionally favor polluters, who should be held responsible for environmental damages.

Amid the current promotion of carbon credits, especially voluntary credits in the forestry sector, it is time to reflect on how we can leverage existing mechanisms to produce high-quality instruments that truly combat global warming. This includes considering the social impact of projects involving people and communities in forested areas — an equally critical aspect that demands constant attention.


This story was produced with support from Internews’ Earth Journalism Network for the "It's a Wash" special report and was lightly edited for length and clarity. The original story can be found here along with references.

Banner credit: PunchUp and Workpoint Today.

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