Forest carbon offsets over a smart ledger

2021 has seen increasing climate policy action and net-zero commitments by individuals, companies and governments. A crucial aspect for the transition to net-zero is the voluntary offset market, with projects relating to REDD+ amongst the most popular. Policy-makers are grappling to make such markets efficient and scalable, however, many issues undermine these efforts pertaining to additionality, permanence, leakage and property and community rights. Digitisation has also accelerated, with technologies, notably blockchain, starting to enter the climate change space. Its use is becoming increasingly common within the voluntary market and, in particular, REDD+, although such projects, are generally in proposal or pilot stages. Given the emergence of other technologies such as AI and machine learning, the technologisation of REDD+ is only likely to increase. Thus modern technologies are being seen by developers as a potential solution to issues hindering REDD+. Potential benefits arising from technology use are unlikely to fully accrue without a wider focus on what has undermined REDD+ to date. As such, there is an urgency to establish an understanding of how projects can utilise these technologies to reduce long-standing issues. To do this, we discuss these issues together with technologies’ capacity to address drawbacks of REDD+ projects.

Forest carbon offsets over a smart ledger

2021 has seen increasing climate policy action and net-zero commitments by individuals, companies and governments. A crucial aspect for the transition to net-zero is the voluntary offset market, with projects relating to REDD+ amongst the most popular. Policy-makers are grappling to make such markets efficient and scalable, however, many issues undermine these efforts pertaining to additionality, permanence, leakage and property and community rights. Digitisation has also accelerated, with technologies, notably blockchain, starting to enter the climate change space. Its use is becoming increasingly common within the voluntary market and, in particular, REDD+, although such projects, are generally in proposal or pilot stages. Given the emergence of other technologies such as AI and machine learning, the technologisation of REDD+ is only likely to increase. Thus modern technologies are being seen by developers as a potential solution to issues hindering REDD+. Potential benefits arising from technology use are unlikely to fully accrue without a wider focus on what has undermined REDD+ to date. As such, there is an urgency to establish an understanding of how projects can utilise these technologies to reduce long-standing issues. To do this, we discuss these issues together with technologies’ capacity to address drawbacks of REDD+ projects

Systematic over-crediting in California’s forest carbon offsets program

Carbon offsets are widely used by individuals, corporations, and governments to mitigate their greenhouse gas emissions on the assumption that offsets reflect equivalent climate benefits achieved elsewhere. These climate-equivalence claims depend on offsets providing “additional” climate benefits beyond what would have happened, counterfactually, without the offsets project. Here, we evaluate the design of California’s prominent forest carbon offsets program and demonstrate that its climate-equivalence claims fall far short on the basis of directly observable evidence. By design, California’s program awards large volumes of offset credits to forest projects with carbon stocks that exceed regional averages. This paradigm allows for adverse selection, which could occur if project developers preferentially select forests that are ecologically distinct from unrepresentative regional averages. By digitizing and analyzing comprehensive offset project records alongside detailed forest inventory data, we provide direct evidence that comparing projects against coarse regional carbon averages has led to systematic over-crediting of 30.0 million tCO2e (90% CI: 20.5 to 38.6 million tCO2e) or 29.4% of the credits we analyzed (90% CI: 20.1 to 37.8%). These excess credits are worth an estimated $410 million (90% CI: $280 to $528 million) at recent market prices. Rather than improve forest management to store additional carbon, California’s offsets program creates incentives to generate offset credits that do not reflect real climate benefits.Significance StatementForest carbon offsets are increasingly prominent in corporate and government “net zero” emission strategies, but face growing criticism about their efficacy. California’s forest offsets program is frequently promoted as a high-quality approach that improves on the failures of earlier efforts. Our analysis demonstrates, however, that substantial ecological and statistical shortcomings in the design of California’s forest offset protocol generate offset credits that do not reflect real climate benefits. Looking globally, our results illustrate how protocol designs with easily exploitable rules can undermine policy objectives and highlight the need for stronger governance in carbon offset markets.

Climate beyond Borders

This chapter reveals the international dimensions and contradictions of California’s climate change regulatory program. It provides an account of the rise of a coalition of translocal justice actors—California-based environmental justice activists and Indigenous rights leaders in Chiapas, Mexico and Acre Brazil—who mobilized against linking California’s forest carbon offsets in the Global South.

California air resources board forest carbon protocol invalidates offsets

The commercial asset value of sequestered forest carbon is based on protocols employed globally; however, their scientific basis has not been validated. We review and analyze commercial forest carbon protocols, claimed to have reduced net greenhouse gas emissions, issued by the California Air Resources Board and validated by the Climate Action Reserve (CARB-CAR). CARB-CAR forest carbon offsets, based on forest mensuration and model simulation, are compared to a global database of directly measured forest carbon sequestration, or net ecosystem exchange (NEE) of forest CO2. NEE is a meteorologically based method integrating CO2 fluxes between the atmosphere, forest and soils and is independent of the CARB-CAR methodology. Annual carbon accounting results for CAR681 are compared with NEE for the Ameriflux site, Howland Forest Maine, USA, (Ho-1), the only site where both methods were applied contemporaneously, invalidating CARB-CAR protocol offsets. We then test the null hypothesis that CARB-CAR project population data fall within global NEE population values for natural and managed forests measured in the field; net annual gC m−2yr−1 are compared for both protocols. Irrespective of geography, biome and project type, the CARB-CAR population mean is significantly different from the NEE population mean at the 95% confidence interval, rejecting the null hypothesis. The CARB-CAR population exhibits standard deviation ∼5× that of known interannual NEE ranges, is overcrediting biased, incapable of detecting forest transition to net positive CO2 emissions, and exceeds the 5% CARB compliance limit for invalidation. Exclusion of CO2 efflux via soil and ecosystem respiration precludes a valid net carbon accounting result for CARB-CAR and related protocols, consistent with our findings. Protocol invalidation risk extends to vendors and policy platforms such as the United Nations Program on Reducing Emissions from Deforestation and Forest Degradation (REDD+) and the Paris Agreement. We suggest that CARB-CAR and related protocols include NEE methodology for commercial forest carbon offsets to standardize methods, ensure in situ molecular specificity, verify claims of carbon emission reduction and harmonize carbon protocols for voluntary and compliance markets worldwide.

Situating Global Policies within Local Realities

This chapter presents the global policy debate over forest carbon offsets as it plays out on the ground. More specifically, it analyzes an effort to link the carbon markets in California (USA), Chiapas (Mexico) and Acre (Brazil). The authors situate global policy within local reality by demonstrating how support for and against the MOU is affected by preexisting political conflict in two of the three participating jurisdictions: California and Chiapas. To do so, they present the historical and political context of the carbon-offsets debate in each location. State government officials, environmental and environmental justice activists, nonprofits, and forest dwellers in California and Chiapas approached the carbon offsets agreement from very different social and political contexts. The chapter underscores how sustainability initiatives, even when promoted with apolitical “win-win” rhetoric, are inherently political.