Certified sustainable forest and life cycle management to support the implementation of an ecosystem service-based crediting mechanism

Sustainable forest management is critical at global, national, and regional levels in order to maintain its multifunctional role for the well-being of people and the conservation of biodiversity. Further to regional or (inter)national regulations on forest management, certification schemes exist to ensure that sustainable practices are implemented in forest restoration and conservation interventions. The most popular examples are the Programme for Endorsement of Forest Certification (PEFC) and the Forest Stewardship Council (FSC) schemes. Both standards focus on the assessment and monitoring of carbon uptake and stock as a measure of post-intervention enhancement of ecosystem services (ES), as well as on increasing the supply of other ES such as the protection of biodiversity or the implementation of recreational functions. However, ES quantification is performed in different ways within the PEFC and FSC procedures. Furthermore, while PEFC explicitly allows for the generation of carbon credits, FSC does not, and such different perspectives spread uncertainty and reduce transparency in the process of carbon trading when carbon sequestration and related credits originate from certified forests. Concerning the carbon crediting system in general −thus not only the sole PEFC-based carbon credits −, a lack occurs of a rigorous, durable and transparent solution to ensure the quantification, traceability and durability of credit itself, which does not prevent the risk of generating greenwashing mechanisms. On top of this, out of the carbon sequestration, other ES are scarcely considered for the calculation of impact compensation credits. All these issues are the focal point to support the implementation of a broad-spectrum environmental crediting system based on a reproducible, verifiable and traceable protocol of actions that would ensure long-term sustainable management of forest natural capital. The aim of this contribution is to illustrate the development of a testable mechanism of forest credits development starting from a step-by-step application of contextual rules, which can be implemented and replicated at different spatial scales. The proposed mechanism has the ambition to become a reference system for natural capital credits generated from forests of the Catholic Church. These represent in Italy an impressively extensive natural capital asset (of around one million hectares). While historically those forested areas represented vital resources for local economies, nowadays they are in many cases unmanaged of even abandoned land. The set of principles underpinning the proposed credits’ certification protocol was applied to some forest properties belonging to the Diocesan Institute for the Support of the Clergy (IDSC) of Asti, in the Region of Piedmont, Italy. The entire case study covers ~90 ha of very fragmented forests, which face severe management problems. The area is indeed constituted by more than 100 small and diversified forest sites with an average extent of less than 1 ha. A sustainable forest management project was recently implemented in the area according to the PEFC scheme, identifying best management practices to quantify, increase, conserve and monitor specific key forest ES. However, so far, only ~11% of the certified forest area has been the object of specific forest interventions. The proposed ES-based crediting mechanism was initially applied on this area through sustainable forest cuts aiming at wooden resource harvesting, ecotourism solutions, and plant biodiversity enrichment (ex-post analysis). It was then applied to the rest of the project area that will undergo management interventions in the next future (ex-ante analysis). The number of generated credits was obtained from the ratio between the net costs of sustainability measures implementation and management, and 50 € (value per credit established by the IDSC after a market analysis for concurrent credits pricing). Net costs were retrieved from the balance between una tantum (e.g., certification costs, costs for forest interventions, administrative costs, etc.) and yearly management (e.g., for auditing, for communication, for maintenance, etc.) costs, and benefits represented by profits calculated as 10% rate of the implementation costs (average earning margin observed in the regional forest management inventory) and wood resources sales. Results show that, in the context of the ex-post analysis, ~16,400 € / ha is the average total value of the environmental credits generated over five years of forest management and use, which reflects the supply of ~330 credits / ha. For the totality of ~10 ha of forest sites, an amount of ~3,300 credits are ideally generated, which can be sold in the market. It can be noticed that those credits do not only incorporate carbon sequestration services (and thus the value of carbon credits), but also the value of many other ES. By extending the analysis with a prospective ex-ante approach to the rest of the project sites, net costs and number of generated credits substantially decrease, by ~36%. Among the principles established in the mechanism, a key one states that those credits shall be sold to citizens or private/public companies aiming to support or sponsoring nature restoration projects following for example corporate social responsibility goals. But they can also be sold to companies aiming to compensate for their residual and unavoidable environmental impact in order to help them reaching a condition of impact neutrality. In those cases, however, in order to prevent the upsurge of greenwashing effects, buyer companies shall demonstrate to have planned or already implemented specific life cycle management measures to reduce or avoid environmental impacts. Last but not least, it is expected to work on the calculation of a physical (not only monetary) quantification of the components of the environmental credit, so to incorporate more consistently, legitimately and unambiguously the intrinsic and sometimes instrumental value of ES into the cost-benefit balance that determines the price of the credit.