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A placebo approach to evaluate methods of counterfactual estimation for REDD+

18 April 2025, Version 1
This content is an early or alternative research output and has not been peer-reviewed by Cambridge University Press at the time of posting.

Abstract

Reducing Emissions from Deforestation and Forest Degradation (REDD+) projects are essential in combating climate change, but current and next-generation certification methods rely on counterfactuals developed before an intervention occurs (ex ante). These may struggle to account for temporal variance, weakening credit integrity. To compare the robustness of different methods for producing counterfactual estimates, we used placebo projects - areas analogous to existing REDD+ projects but without experiencing REDD+ activities. We designated 27 such placebo areas across the wet tropics, and compared their observed deforestation rates with three ex ante forecasts and one ex post estimate. We found that ex post (85% goodness-of-fit) was more precise than ex ante (13% - 51% goodness-of-fit), adding to concerns around existing and proposed crediting mechanisms. We argue that a standardised placebo approach can facilitate the development of new methods for counterfactual estimation, strengthening the reliability and transparency of future credit claims.

Keywords

carbon credit
REDD+
emissions reductions
avoided deforestation
conservation finance
carbon market
carbon finance
forest conservation
counterfactual analysis
placebo unit
impact evaluation
deforestation
land use change

Supplementary materials

Title
Description
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Title
Supplementary Information for “A placebo approach to evaluate methods of counterfactual estimation for REDD+”
Description
This Supplementary Information contains two sections: (1) a mathematical representation of the forecasting procedure, and (2) the exploratory analysis of an hybrid ex ante forecasting method
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Supplementary weblinks

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