Since nearly all rice credits have been removed from the market, we analyzed the risk scores based on how the new, active methodologies addressed the quality issues that materialized in the invalidated methodologies (see Exhibit 4). Improved rice cultivation projects primarily carry risks regarding baseline setting, additionality, and MRV. There is little to no risk associated with leakage, permanence, or GHG accounting, assuming projects follow updated guidance. (For more information on how we evaluate risk severity and prevalence, see
Appendix.)
|
Quality Criteria |
Risk Severity |
Prevalence |
|---|---|---|
| Additionality/Baselines | Medium concern |
|
| Leakage | Low concern |
|
| Permanence/Durability | Negligible concern |
|
| GHG Accounting | Low concern |
|
| MRV | Medium concern |
|
| Socio-Environmental Safeguards | Low concern |
|
Additionality/Baselines
:
Medium Concern, Common Prevalence
Inaccurate baseline assumptions can lead to overcrediting.
Since rice projects credit reductions of emissions from the baseline scenario, accurately estimating that baseline is central to credit quality. CDM’s AMS-III.AU methodology allowed projects to assume that rice paddies would have been continuously flooded in the baseline scenario, regardless of the local climate or land management regime. This was
an oversimplification
that did not reflect
real-world environmental variability especially as weather patterns have become harder to predict. Newer, active methodologies mitigate this risk by applying more rigorous baseline-setting approaches, requiring project developers to use models or direct measurements that better reflect the land management and environmental conditions at the project site. These requirements help ensure that rice emissions reductions are based on accurate baselines.
Rice projects have additionality risks, especially in regions with other incentives for conservation practices aside from carbon financing.
Even without carbon credits, improved rice paddy management is gaining traction in key rice-growing regions in Southern and Eastern Asia due to increased government support, but adoption of these activities varies. For example, Asia’s agriculture sector has long incorporated the strategy of dry seeing, which is currently part of
China’s 14th Five-Year Plan
. However, high rates of AWD and other types of early drainage have not been observed across Asian regions, partially due to:
a) implementation at scale requiring an update to water infrastructure systems, particularly across smallholder systems with limited access to capital, and
b) farmer hesitation to adopt a detailed practice that may lower crop yields.
Since rice agriculture is dominated by small, dispersed producers, adoption trends of practices
tend to vary between and within countries.
Projects from regions with high activity adoption rates are at higher risk for nonadditionality. Buyers should take steps to avoid projects from areas where eligible irrigation practices are prevalent unless strong evidence links project activities to carbon credit finance. Because many irrigation practices rely on a system of communal water infrastructure, these water-conservation practices (like AWD or early drainage) are more likely to be implemented without carbon credit finance if supportive infrastructure already exists within the region. Projects implementing dry seeding and complementary practices such as avoided biomass burning can also risk nonadditionality but tend to have fewer barriers to adoption.
Leakage
:
Low Concern, Very Common Prevalence
In some cases, project activities can lower rice yields, which risks triggering market leakage if other farmers increase production outside the project boundary. This is addressed by all active methodologies, which stipulate that project activities resulting in reduced yields are not eligible for crediting. Projects must have plausible data confirming consistent rice crop yields, and exact yield data is then factored into leakage deduction equations for an added layer of caution.
Activity-shifting leakage is primarily a risk where rice hulls, which some agrarian communities use as a fuel source, are diverted to alternative uses. Using rice husks for purposes other than fuel (e.g., erosion control or livestock feed) can trigger an increasing demand for other fuel sources (e.g., wood or diesel), causing emissions outside the project boundary to increase. Buyers can mitigate leakage risks by investing in credits that require a deduction for activity-shifting leakage.
Permanence/Durability:
Negligible Concern, Rare Prevalence
Methane emissions reduced by rice carbon projects are permanent. These projects credit emissions reductions from the business-as-usual scenario, so once eligible irrigation management practices are instituted, emissions from the baseline flooded scenario remain permanently out of the atmosphere.
In terms of durability, farmers may revert to conventional farming activities after carbon crediting ends due to lack of buy-in, changing environmental conditions, market shifts, or an inability to maintain equipment and/or infrastructure. Discontinuation of project activities doesn’t impact credits already generated, but it does imperil future reductions.
GHG Accounting:
Low Concern, Common Prevalence
The improved rice cultivation credit type has come a long way since the accounting practices in the CDM AMS-III.AU methodology. Several activity types known for their impact on overall rice agricultural emissions (e.g., improved nitrogen management or avoided burning of rice hulls) have been added to eligible crediting practices, leading to more comprehensive emissions accounting. Additionally, methodologies now indicate protocols for nitrous oxide (N2O) accounting and provide updated guidance on how to omit values if they are insignificant.
However, with these updates, projects still risk inaccurate methane estimates when emissions factors for CH4 calculations are accepted at the most basic level and lack local activity data. Newer methodologies attempt to balance the benefits of direct measurement and modeling, accepting the use of high-quality models and either of the following, or a combination of the two, for calibration:
a) geography-specific emissions factors, or
b) a series of direct CH4 measurements averaged across multiple representative paddies.
The scientific literature suggests that
region-specific
values
are necessary
to accurately
calculate emissions factors
and to calibrate models. When direct measurement is used, it is considered a best practice to compare the collected values to published regional factors (where available) to ensure that field measurements possess the right order of magnitude. Using factors that are as regionally precise as possible is essential to rice projects, as emissions can vary depending on altitude and precipitation levels.
Buyers should prioritize the inclusion of site-level data where possible but understand that the absence of such data does not necessarily mean that a project is low-quality. In some well-researched regions, such as China and India, geographic-specific emissions factors may be easily corroborated by literature. In rice-growing countries where less data is available, such as Laos, reliable regional-level emissions factors can be hard to find, so on-site direct measurement can be more effective in calibrating models.
MRV:
Medium Concern, Common Prevalence
Without a fine balance between models and measurement, projects risk inaccurately monitoring methane emissions from rice paddies.
As referenced above, it is costly and difficult to continuously measure methane emissions from rice paddies, so methodologies allow for the use of emissions factors. These emissions factors tend to be calculated in one of two ways:
a) stock emissions factors, such as those provided by the IPCC, are typically calculated at the country or climate zone level based on scientific literature, or
b) project-specific emissions factors can be calculated using on-farm measurements taken via closed methane chambers.
Project-specific emissions factors provide greater granularity but require appropriate sampling and measurement. Conducting closed-chamber measurements of CH4 requires technical knowledge, which not all projects have access to. Operating a closed chamber without proper expertise can lead to an overestimation of CH4 reductions, posing a risk for future projects. To address this, the active methodologies have updated their guidelines to chamber collection and often recommend that an external consultant conduct these measurements to ensure accuracy.
Reliance on farmer-reported data without digital MRV, remote sensing, or double-checking typical data ranges increases the risk of inaccurate or unverifiable activity data
. Another risk is validating and verifying project activities reported by farmers across the small, scattered paddies where farming occurs. Without digital MRV, projects risk outdated or misleading data management practices and must rely on farmer testimony. For activity data, remote sensing allows field flooding patterns to be validated with greater certainty compared with farmer logs and attestations alone.
Where possible, projects should use digital MRV and remote sensing technologies — such as satellite monitoring, digital logbooks, and automatic sensors — to bolster efficiency. While methodologies are converging to require remote sensing of flooding patterns, farmer logs are still accepted as evidence in some cases, including for projects where no satellite imagery is available to verify when a field was flooded or drained. Methodologies outline that primary data can be captured using a farmer logbook, but the best practice would be to compare such data against a typical range for the given parameter and substitute any out-of-range values with the most conservative value within the predetermined range.
Social and Environmental Safeguards:
Low Concern, Uncommon Prevalence
Successful projects proactively plan for and address the points below to help ensure community support, equitable participation opportunities, and skill-building sessions that are well-designed and well-executed:
-
Projects that operate with
shared cropping and processing systems
need mechanisms to ensure community buy-in and trust
to perform at their potential. -
Projects should conduct thorough pre-project stakeholder planning to ensure that all community members can participate, rather than defaulting to those who already have larger, more productive farms. A case study from India’s Haryana and Madhya Pradesh regions showed that
marginalized farmers were underrepresented
in carbon farming projects. -
Addressing issues of land tenure, ownership, and socio-economic class increases the likelihood of project success. Including
both older and younger farmers
in a project aids knowledge transfer and helps overcome cultural barriers to the adoption of more sustainable practices.
Environmentally, midseason and early end-of-season drainage provide benefits in terms of water availability and overall use of pesticides. AWD is primarily known for its water-saving capabilities,
reducing irrigation water
by up to 20%
compared with continuous flooding
. This can also contribute to fertilizer savings, as less water may mean fewer losses of water-soluble nutrients.
