Forest Offsets Will Add to Environmental Harm (unless there's a re-think)

As details begin to emerge, it is becoming clear that forest offset frameworks in North America will likely threaten further damage to the climate and to forests.

Forest offset frameworks have been in development for the last couple of years. Details of these frameworks are now starting to emerge, and it doesn't look good.

The BC Pacific Carbon Trust has issued a call for $3 million worth of 'forest sector opportunities,' an apt term for a program that focuses on financial support only for intensive forestry activities: fertilization, select seed use and afforestation. Of these three, only afforestation has significant climate mitigation potential, but only in the long term.

Completely absent from the PCT's Forest Offset Guide are any activities with significant short-term mitigation potential focused on actually reducing emissions, for example from the avoided harvest of old-growth forests. Environmental groups responded harshly to this announcement, which followed a government pretense to listen to concerns about the plan.

The Western Climate Initiative has also just released its Offset System Essential Elements Draft Recommendations Paper for public comment. The document describes the essential elements that offset protocols must have to be eligible for use in the emerging WCI system. On at least three key points it comes up short. First, there is no strong test of additionality; WCI proposes to only consider additionality to legal requirements. Failing to do more than this means many projects will not 'offset' emissions at all, but simply allow them to continue without penalty.

Second, there are no ecological safeguards to ensure that no other forest values are sacrificed for carbon benefits. This type of safeguard would possibly prevent the type of fertilization projects promoted by B.C.'s Pacific Carbon Trust.

The third major failing apparent in the paper is the acceptance of a 100 year permanence requirement for 'sequestration' (forest) projects. It's based on a rule-of-thumb (that isn't strictly accurate) that CO2 has a 100-year lifetime in the atmosphere.

Really it's a bit of a rhetorical flourish: it sounds good but accomplishes little. Although 100 years sounds like a long time, what it really means is that forest offsets cease to be about reducing emissions, and at best only delay them. The same approach is emerging as a an apparent industry standard. You can also see it in the Pacific Carbon Trust's Forest Offset Guide and the Climate Action Registry's Forest Project Protocol

One of the dangers of establishing a false foundation of integrity is that there will inevitably be those that seek to undermine it. The second draft forest offset protocol developed by the Forest Carbon Standards Committee (not yet available for public review) proposes only 50 years rather than 100 ... apparently just because it's easier. This approach ceases to even be about delaying emissions, and actually becomes about a system of financial incentives to increase them over the long-term.

This has been my proposal: redefine permanence as permanent, and do not ever allow intentional reversals or emissions from forest carbon projects.

One of my core observations from having been involved in many of these offset discussions is that they become much more about making the system work and delivering workable incentives (or sometimes just rewards for good behaviour) than about actually reducing emissions.

The worst example of this that I've come across is the serious lobby by some of the American forest sector representatives participating in the Forest Carbon Standards Committee discussion to earn offset credits for the carbon stored in all wood products that are manufactured, regardless of where they come from and even without any consideration of a baseline. The apparent logic: wood is good, give us credits.

Add to all this the proposed Logging loophole from Copenhagen, which would allow developed countries to hide any increases in emissions and still generate fake credits if they want them and the outlook is grim. Forest-based climate mitigation is looking like a total shell game with no climate benefits and probable ecological harm.

A lot of this could be fixed by embracing a couple of simple principles when it comes to forests and climate: focus on real emission reductions and, do no ecological harm. Sadly, such basic tenets have so far been beyond reach of decision-makers on forest offsets.

Dealing with impermanence of forest carbon offsets

The Canadian government released new draft details about the proposed federal offset system a couple of weeks ago. The guide includes the government's current thinking on how to deal with the impermanence of forest carbon offsets. Here it is:

"Biological sink projects carry a risk of carbon reversals, in which the sequestered carbon is released back into the atmosphere; for example, through forest fires or intentionally changing farm management practices. Since an offset credit must represent a permanent removal of carbon from the atmosphere, there must be a mechanism in place to address this risk of reversals.

The permanence of biological sink offset credits is ensured in the Offset System by requiring the replacement of credits in the event of a reversal anytime throughout the project’s registration periods and for a further 25-year liability period after the project’s final reporting period in its final registration period.

Furthermore, to address the risk that a Project Proponent may not be able to replace the credits when a reversal occurs, the Project Proponent is required to apply a discount factor to offset credits claimed for biological sink projects. The discount factor will be specified in the Offset System Quantification Protocol and will reflect the risk of defaulting on a replacement obligation for different project types. The Project Proponent will be required to replace credits if a reversal occurs any time during a 25-year liability period. Project Proponents are required to provide evidence to the Minister on a regular basis during the liability period and provide a certification statement that the sink has been maintained. However, verifications will not be necessary during the liability period." Page 27

My understanding is that the current draft of the Waxman-Markey Bill in the U.S. proposes instead to deal with impermanence through a 'buffer reserve' approach, which would set aside a percentage of each forest carbon offset...if the carbon is reversal is unintentionally, 50% could be covered by this reserve. I'm not sure what the liability period is.

Both these approaches differ from that used for afforestation projects within the Clean Development Mechanism (CDM), which only issues temporary credits for forest projects. This seems the most robust approach, but it doesn't appear to be taken very seriously in any of the offset regimes that are under development... apparently because people doubt the market demand for temporary offsets.

Anybody know of any other approaches being considered out there?