Carbon Prospecting in Tropical Forests for Climate Change Mitigation

Background

Nature-based climate solutions—such as forest protection and restoration—play an increasingly central role in global climate mitigation strategies. However, the supply of high-quality carbon credits from forest protection projects fails to keep pace with rising demand. A major barrier is the lack of reliable data to guide investment decisions, particularly in pinpointing areas where forest carbon protection delivers both environmental and financial returns. This study evaluates the global potential of tropical forest conservation to generate investible carbon credits and quantifies the return on investment under current and projected carbon market conditions.

Goals and Methods

The study aims to map the global distribution of "investible forest carbon," defined as forest carbon stocks under imminent threat of loss and eligible for certification through carbon finance mechanisms. Researchers model the magnitude of investible carbon using high-resolution (1-kilometer) data on forest carbon stocks and deforestation risk across tropical regions. They then assess the financial viability of forest carbon projects by calculating net present value (NPV) based on current operational costs, carbon prices, and projected market trends over a 30-year horizon. To validate their model, the researchers compare their estimates against performance data from 25 certified forest carbon projects under the Voluntary Carbon Standard.

Conclusion

The study estimates that tropical forest protection could yield 1.8 gigatons of CO₂-equivalent in investible carbon annually, with the highest potential located in the Americas and Asia-Pacific. However, about 80% of these potential sites remain financially unviable under current carbon prices and cost structures. The analysis shows that protecting half of investible sites requires carbon prices of at least $16 per ton, while covering 80% would need prices to rise to $44 per ton. The authors conclude that while carbon finance holds promise, it must be paired with complementary conservation strategies and enabling policy frameworks to make large-scale forest protection economically feasible.