Key elements and challenges in monitoring, certifying and financing forestry carbon projects

7 November 2018 - Climate Brief - By :

The amount of finance for forest carbon projects has never been as high as in 2015 when it reached USD 888 million (Goldstein & Ruef, 2016). In most cases, a reliable monitoring, reporting and verification (MRV) of carbon removals or emissions reductions is necessary to access most carbon payments.

After an overview of forest carbon finance, this Climate Brief presents the different options and challenges associated with forest carbon MRV.

First, projects developers face three key choices:

The definition of th project scope (carbon pools to be considered, geographical perimeter and the related leakages),
The different techniques and tools for forest carbon monitoring (field measurements, modeling or) remote sensing)
The baseline definition and additionality demonstration.

Despite the different tools and guidelines available to help projects developers trigger impactful mitigation action, six main technical and political challenges are identified:

The non-permanence risk and carbon debt: while standards provide tools (eg. buffer account, ex-ante credits) to deal with this challenge, finding the right balance between environmental integrity and project profitability remains delicate.
Monitoring uncertainty is often put forward as a barrier to the implementation of carbon pricing in the forestry sector. Reduce uncertainty is costly and the interest of doing so depends on whether carbon pricing is voluntary, on the importance of information asymmetry and on projects profitability.
The risk of windfall effects: additionnality can never 100% guaranteed. There again, striking the right balance between avoiding both the “false positives” (non-additional projects getting registered) and the “false negatives” (additional projects that are shut out by the cost and risk of the additionnality demonstration) is delicate.
Verification costs: verification can weight up to half the MRV costs and cannot usually be internalized.
Low carbon prices: typical MRV costs for forestry projects are around 0.15-1.4 € per tCO2e which is substantial when carbon prices average around 3 € per tCO2e on voluntary markets. How to combine a robust certification with the financial viability of carbon projects in this context is challenging.
The double-claiming of climate action issue: the Kyoto Protocol safeguards against double-counting between countries have been adapted by some voluntary carbon standards to prevent that a private entity and a country claim the same emission reduction. This has slowed down projects implementation in Annex I countries, but several standards, including the Gold Standard, are moving towards a new paradigm for voluntary carbon markets.

Key elements and challenges in monitoring, certifying and financing forestry carbon projects Download

To learn more

01/23/2026 Foreword of the week
Financing carbon farming practices: lessons learnt in France can reinforce the EU level initiatives

In a challenging economic and political context, especially for the agriculture sector, some incentive schemes can still help bring stakeholders together in climate transition and resilience initiatives. This is the case with carbon certification schemes, which both ensure the credibility of the climate impact of the actions implemented and provide remuneration for farmers and foresters for changes in practices. Some of these measures, such as replacing mineral fertilisers (mostly imported) with organic fertilisers, also help to meet the sector’s needs for resilience and strategic independence, which are crucial in the current context.
01/21/2026 Blog post
On Carbon Removals and Carbon Farming the devil is in…the demand

The implementation of carbon farming practices on European farms and in European forests is a lever for achieving carbon neutrality, but also for farm resilience, the adaptation of forest stands to climate change and for contributing to our strategic independence. Certifying and financing low-carbon practices is the objective of the CRCF (Carbon Removals and Carbon Farming) regulation, which will come into effect in 2026. Now seems the right time to draw lessons from six years of experience with a similar standard in France: the “Label Bas-Carbone” (Low Carbon Label – LBC). The results show that striking a balance between scientific rigour and accessibility for stakeholders has led to the development of a substantial range of projects. However, the real challenge is to build sufficient and appropriate demand to finance the projects. There is no miracle solution, but complementary financing channels may emerge.
01/16/2026 Blog post
CBAM and fertilisers: ring-fencing budgets to help farmers reduce their use of mineral fertilisers

The Carbon Border Adjustment Mechanism (CBAM) came into force on 1 January 2026. It is a carbon tax applied at the borders of the European Union to imports of certain industrial products covered by the EU Emissions Trading System (EU ETS). Nitrogen-based mineral fertilisers are included in this initial list of products. To avoid an increase in costs for the farmers concerned, the level of the tax has been reduced for fertilisers, and they may even be temporarily excluded from the scope of the CBAM. Yet, for the climate, but also for France’s strategic independence and food sovereignty, the CBAM will ultimately have to be fully applied to mineral fertilisers. To limit or even avoid an increase in farmers’ fertiliser expenditure, we need public policies – some of which are currently under threat. Ring-fencing budgets for these policies would be a way to support farmers’ incomes and the food sovereignty of both the European Union and France, while reducing the carbon footprint of our food system.

Key elements and challenges in monitoring, certifying and financing forestry carbon projects

Financing carbon farming practices: lessons learnt in France can reinforce the EU level initiatives

On Carbon Removals and Carbon Farming the devil is in…the demand

CBAM and fertilisers: ring-fencing budgets to help farmers reduce their use of mineral fertilisers