Taihei Matsumoto

Evaluating the quality of nature-based solutions in Japan to enable sustainable development of its carbon credit market

Carbon credits derived from nature-based projects are gaining traction among organisations committed to achieving their net-zero targets. However, these projects have been criticised for inappropriate carbon accounting. In this study, we scrutinise the legitimacy of carbon accounting within the Japanese carbon credit system (J-Credit). J-Credit certifies carbon removal initiatives that incorporate silvicultural practices, such as thinning, harvesting, and reforestation. Our research investigated diverse scenarios to articulate the conditions under which additional CO₂ sequestration could be achievable. Our findings suggest that the reforestation rate is an important factor for realising additional CO₂ sequestration through harvesting and reforestation. While the J-Credit methodology creates incentives to enhance the reforestation rate by advance issuance of carbon credits, our study underscores implementation challenges. This includes the significant disparity between the net-zero commitments of organisations and the actual impact on the environment. By 2050, the projected amount of carbon credit available in 2050 will exceed the actual CO₂ removal in that year by a factor of 33. Upon examination of various carbon credit methodologies worldwide, we recommend the J-Credit system to explore future contracts or similar mechanisms to rectify this distortion. Further, we assert the necessity of reassessing carbon sequestration accounting and management practices to effectively pursue climate goals.