LEAF Coalition

The LEAF Coalition was launched on April 22nd by an initial group of governments and leading companies aiming to mobilize at least $1 billion in finance to support tropical and subtropical forest jurisdictions in making substantial reductions in their emissions from deforestation. This group of participants is growing, with new companies and governments able to join in the time leading up to the signing of final agreements by the end of 2021.

Emergent, a US non-profit, is providing a platform to facilitate the transactions to provide finance to these programs, and will serve as LEAF’s administrative coordinator.

Performance will be measured against the TREES standard. TREES is a high-integrity standard building on over a decade of progress in international support for reducing deforestation and ensuring social and environmental integrity. TREES is managed by ART, a voluntary global initiative hosted by Winrock International. ART also maintains the registry on which Emissions Reductions are issued, transferred and retired.

ART is governed by an independent Board of Directors, the members of which represent a diverse group of objective, globally recognized experts.

This first Call for Proposals is just the start of what we expect will become a rapidly expanding market for high quality ERs from jurisdictional forest and climate programs. Over the next few years, such a market could channel much greater volumes of finance to tropical and subtropical forest countries that take rapid action to halt emissions from deforestation.

The finance provided under this call for proposals will pay for high-quality Emissions Reductions generated during the 2022 – 2026 period, while allowing supplier countries to still use the underlying mitigation results towards ambitious NDCs (unless they elect to make a corresponding adjustment, which is not required under LEAF).

The LEAF Coalition will thus ensure that ambitious tropical and subtropical forest jurisdictions have access to large scale, predictable performance-based finance, enabling them to further invest in reduced deforestation and sustainable rural development.

ART will issue verified Emissions Reductions (called “TREES credits” under the TREES standard) to participating jurisdictions that reduce emissions from deforestation and forest degradation. Each of these represent one tonne of CO2e. The terms of these transactions are designed to accommodate voluntary purposes, such as voluntary corporate commitments to drive urgent climate action in addition to deep cuts in their own emissions in line with science-based emission reduction targets and aiming for carbon neutrality by 2050 or sooner.¹

1) Science-based targets (SBTi) or equivalent quantified and independently verified decarbonization targets, consistent with limiting warming in line with the long-term temperature goal of the Paris Agreement, with no or limited overshoot.

Companies are invited to participate in the LEAF Coalition by purchasing high-quality emissions reductions as part of broader voluntary commitments to global climate action. These emissions reductions must come in addition to, and not as a substitute for, deep cuts in own value chain emissions. LEAF thus welcomes participation by any company that meets its high-bar criteria of commitment to science-based emission reductions in their own value chains.

Yes. To participate, private sector buyers must meet four key criteria:

– Publicly commit to science-based targets (SBTi) or equivalent quantified and independently verified decarbonization targets, consistent with limiting warming in line with the long-term temperature goals of the Paris Agreement, with no or limited overshoot. In addition, private sector buyers should aim to have set SBTi or equivalent targets (as above) before taking title to ERs, and have the targets in place no later than 2023.² Private sector buyers must also publicly commit to mid-century net zero targets covering all three emissions scopes.
– Join the UN Race to Zero.
– Publicly report a greenhouse gas emissions inventory following the Greenhouse Gas Protocol (GHGP).
– Separately report publicly any use of Emissions Reductions or other carbon credits, including purpose of use. Reporting should be independently audited.

2) SBTI allocates 24 months for a thorough target setting process

This is a global call. All eligible national and subnational jurisdictions (one level down from national level jurisdiction), tropical and subtropical, which meet ART/TREES requirements for forest area are invited to submit proposals.³

3) Subnational jurisdictions are requested to indicate that the national government will provide the participant with a letter from the relevant national entity authorizing the Participant’s application to and participation in ART.

Proposals will be selected based on their ability to meet the ART-TREES requirements, and the demonstrated credibility of jurisdictions’ ambition and readiness to reduce deforestation and generate ERs while ensuring the full and effective participation of relevant stakeholders — in particular, Indigenous Peoples and local communities.

Jurisdictions demonstrating political willingness to make or maintain durable policy changes that enhance ambition under the Paris Agreement would greatly strengthen their proposals. Proposals will be prioritized from jurisdictions with clear and credible pathways towards net zero emissions in line with the latest science, and have established, or have plans to establish as soon as possible, a 2050 Long Term Strategy to implement this global net zero goal.

Following the jurisdictional approach, progress is measured by looking at emissions from the forests of an entire country or state/ province. A reference level is set based on the average of historical emissions, updated every five years. Results are measured relative to this reference level, with deductions set aside for uncertainty and leakage risks as appropriate.⁴

Payments are made only after results have been fully verified by an accredited and independent body.

Deforestation is reduced using various public regulatory-, finance- and enforcement tools, in conjunction with other public and private initiatives, targeted at the root causes of deforestation, the features of which will depend on country circumstances.

4) The draft TREES 2.0 also includes removals, with corresponding guidance for establishing baselines for removals.

Proposals will be selected based on the demonstrated credibility of jurisdictions’ ambition and readiness to reduce deforestation and generate emission reductions, while also ensuring the full and effective participation of relevant stakeholders — in particular, Indigenous Peoples and local communities. Through ART/TREES, Emissions Reductions achieved under the LEAF Coalition must satisfy and go beyond the Cancun safeguards, which require respect for the knowledge and rights of indigenous peoples and members of local communities, by taking into account relevant international obligations, national circumstances and laws.⁵ TREES requires third-party verification of conformance with the safeguards, and includes a series of detailed structural, process, and outcome indicators.

5) Specifically through section 12 of TREES: Cancun Safeguard B – Transparent and effective national forest governance structures, taking into account national legislation and sovereignty (including land tenure rights and access to justice); Cancun Safeguard C – Respect for the knowledge and rights of indigenous peoples and members of local communities by taking into account relevant international obligations, national circumstances and laws, and noting that the United Nations General Assembly has adopted the United Nations Declaration on the Rights of Indigenous Peoples, and Cancun Safeguard C – The full and effective participation of relevant stakeholders—in particular indigenous peoples and local communities—in actions referred to in paragraphs 70 and 72 of decision 1/CP16.

This is a results-based initiative. Payments are only made when emissions reductions have been verified in accordance with the independent ART/TREES standard, which embeds ambitious reference levels, strong requirements for managing uncertainty, leakage risks and permanence, as well as robust environmental and social safeguards.

The LEAF Coalition includes four transaction pathways: There is one pathway for Sovereign contributors to engage in transactions (#1), and three pathways for private sector buyers to do so (#2-4). In #1, Sovereign contributors will not use Emissions Reductions toward their NDCs. Payments support mitigation efforts in the supplier jurisdiction.. The underlying mitigation may be counted once: towards the Supplier Country’s NDC.

Private Sector buyers have three pathways:
2. Private sector buyers provide results-based payments without taking title to ERs.
3. Private sector buyers take title to ERs. Under this option the Supplier will transfer the ERs to the buyer on the ART registry. The supplier country may include the underlying mitigation in accounting for its NDC. The private sector buyer must transparently communicate that the underlying mitigation contributes to the Supplier country’s NDC implementation and achievement.
4. Private sector buyers take title to ERs for which the Supplier Country is willing to make a corresponding adjustment. Under this option the Supplier will transfer the ERs to the buyer on the ART registry, and the supplier country will apply corresponding adjustments for the underlying mitigation in accounting for its NDC.

For all pathways, the ART registry will clearly identify each issued ER for which the Supplier Country intends to or did carry out a corresponding adjustment for the underlying ERs in accounting for its NDC. In pathway 4, the application of a corresponding adjustment ensures the underlying mitigation is not double-counted.