The Climate Action Reserve has a strong, deep history in promoting sustainable forest management. Its first offset protocol was the Forest Protocol released in 2005. The Reserve develops its protocols with lengthy input from stakeholders across different sectors and interests. Defining terms for greenhouse gas accounting in forests is complex and technical.
In recent months, various questions have been raised regarding accounting principles within the forest offset protocol under California’s cap-and-trade program and within the Reserve’s voluntary program. To help facilitate a more complete and accurate understanding of how offsets are generated under the forestry protocol, the Climate Action Reserve has prepared an educational piece summarizing how the protocol works. Summary points from “Key Accounting Principles for Improved Forest Management Projects within the Forest Protocol” include:
- Improved forest management projects enable forests to transition to sustainable forests that are more resilient to impacts of climate change, appropriately stocked, have larger and older trees, maintain high growth rates, and often will result in higher production of wood products than in the baseline case over the project life.
- Important greenhouse gas accounting themes within the protocol, such as baselines, additionality, environmental safeguards, and leakage risk, are assessed over a minimum of 100 years.
- Standardized baselines, with a basis in carbon stocking among landowner peers defined for each forest type, are used to account for the fact that potential baseline outcomes are hypothetical (i.e., one cannot know a future outcome that will not occur).
- Forest carbon stocks are continually at risk of degradation or conversion, particularly given the frequency of timber market fluctuations and land transactions, which are largely motivated by timber and alternative land use value. Forest carbon projects remove these risks with guaranteed monitoring reporting and verification for the next 100-years plus. The long-term result of forest carbon projects will be bigger, older, and more resilient forests, many with enhanced productivity.
- Crediting in the forest protocol is conservative due to:
- A conservative baseline.
- All projects contribute approximately 15-20% of their credits to an insurance buffer pool that backstops emissions associated with project failure, principally as the result of fires, floods, hurricanes, and other natural disturbances.
- No accounting is included for carbon accumulations in soils, litter, and duff, which together account for about 40% of the total carbon in a forest, even though these carbon pools increase substantially as part of a forest carbon project.
- Leakage risk of about 37% for shifting harvest and wood products emissions is assessed as a deduction in the quantity of credits only when it detracts from project crediting due to lower harvest levels.
- Carbon in wood products in landfills is only accounted for when baseline harvest exceeds project harvest, i.e., reduces the number of credits received. Projects do not receive credits for carbon stored in landfills when project harvest exceeds baseline harvest.
For access to the entire report, please click here. Additionally, concepts on forest carbon accounting are explained in the infographic below. Please send any questions to [email protected].