Clarifying 4 Forest Carbon Project Misconceptions

A recent Wall Street Journal opinion piece called “Forests: Good Intentions but Mixed Results,” laid out some common misconceptions of forest carbon projects. Contrary to the authors’ assertions, forest offsets do create real, immediate, scalable, and efficient carbon sequestration opportunities. Such nature-based solutions are broadly accepted as one of our first best options to begin to remove carbon from the atmosphere as we move quickly towards a decarbonized economy. You can also dive deeper into each of these concepts in our “Guide to Forest Carbon” white paper.

Misconception 1

“...most if not all large-scale forest-based carbon projects are paying forest landowners to do something that they are already doing, thus failing to meet the “additionality” criterion.”

To ensure that a forest carbon project is creating real change, you first need to understand the “business as usual” scenario for the specific acres where that project is taking place. These can vary widely: forests in the interior of Alaska have a very different business as usual than pine plantations in the Southern US. The Alaskan forests may suck up a huge amount of carbon year over year, but are hard to access and don’t have a lot of nearby markets - meaning they’re not at high risk of being cut down. As a result, paying to defer harvest on those trees won’t do us much “additional” good.?

Assessing the likelihood that any given section of forest may be cut in the near future is an important part of a forest carbon program. But this isn't a new problem. Banks and insurers have dealt with adverse selection for a long time – in fact they've made a business of it. Assessment of additionality can be done poorly – as Mr. Sonnenfeld suggests – but it can also be done well, by using more precise information. This argument is like saying banks aren’t able to make loans because it’s impossible to predict who will pay them back: it's simply not true. Read more about this well understood issue here.?

Misconception 2

“...trees are too easily substituted in a sawmill, so a harvest deferral by one landowner will simply be met by an acceleration by another.”

The common term for harvest activity shifting from one location to another as a result of harvest deferral is “market leakage.” Leakage can be minimized at a large scale by ensuring that all landowners have access to markets. Traditional forest carbon markets have left most family landowners unable to participate due to arduous contracts and steep costs, leaving 290 million acres (the size of CA and TX combined) out of the climate solution. This makes leakage a serious issue for traditional carbon market solutions, as the harvest deferrals created by large landowners may easily “leak” to surrounding non-enrolled small landowners. By increasing landowner participation on a large scale, however, as NCX has done, the leakage effect becomes much smaller.?

While leakage can be effectively minimized with careful design of a forest carbon program, what residual leakage remains can also be estimated and properly accounted for. It’s also not true that mills can switch without cost to new sources of supply. The wood supply chain is limited by what’s available on the landscape, making change slow and cumbersome. Wood products markets are notoriously local - mills simply do not have access to unlimited supplies of their preferred type of wood (hardwood/ softwood) at any price they like. Even when switching is possible, mills incur significant transaction costs if they must switch from their preferred suppliers.?

Misconception 3

?“...more carbon is captured by faster-growing younger trees, and the rate at which carbon is stored plateaus rather quickly when both storage in the forest and in wood products are counted.”

The author is correct that trees plateau in carbon storage as they grow. It is incorrect, however, to claim that this means forest offsets are not “real.” The changing rate of growth is, in fact, exactly why one-year harvest deferrals for forests where harvest is otherwise likely represents such an efficient climate strategy. Due to their economic calculations about forest value, industrial landowners tend to cut at a point where trees are still increasing in mass - and accruing carbon - at a high rate. By paying to defer harvest on the margin - at that moment in forest development, you can keep trees on the landscape at relatively low cost to the landowner (and therefore to the buyer of carbon credits), but with high carbon storage impact.?

One clarification: this author asserts that the “rate at which carbon is stored plateaus” as a tree grows. This is true. But the rate of percentage increase (how much larger a tree gets in one year, compared to where it started) is not the same as the rate of absolute increase in mass (how many tons of carbon it adds to its mass). It is this second number that is most important for carbon storage, and which is shown in the graph above. An increase of only a few percent per year in an older, larger tree still represents a substantial amount of carbon storage. (e.g., a 2-ton tree growing at 10% would add .2 tons per year - great! But an older, 10-ton tree growing at only 2% would also add .2 tons per year.) It’s the overall rate of sequestration that matters.?

Finally, this piece mentions that we should account for carbon storage in both forests and in wood products. We agree: there must be room for durable wood products in the forest-based climate solution. As society continues to use building materials, it’s critical that we maximize the use of lower-carbon materials like wood. However, the author seems to suggest that these two are at odds- that short-term harvest deferral will come at the expense of reducing emissions associated with the built environment. This is not true. These two sinks are complementary and can be enhanced together, without compromising immediate climate impact.

Misconception 4

“...one-year harvest deferrals offer substantive carbon capture and storage benefits is questionable at best, and clearly fails to meet the “permanent” criterion.”

The principle of permanence is a critical part of any forest carbon protocol. And these criteria mostly take the form of time requirements - commitments that stored carbon will not be re-released for the agreed-upon time frame, often several decades or 100 years. But this time requirement is just a proxy for what we actually care about - making sure that a project actually delivers the climate impact that it has promised. The length of the project isn’t the point.?As we are in a climate emergency, we actually would prefer to draw down carbon now, in this decade, instead of 40 years down the line. There is a time value of carbon. But with the traditional approach to forest offsets, long-term contracts have been the only available tool to ensure that carbon projects fully deliver their stated climate impact. As a result, one “permanent ton” is often defined as the impact of holding one ton of carbon for 100 years.

Here’s the good news, and what this opinion piece misses: we can create equivalent climate impact through higher-magnitude, shorter-term storage. Using IPCC carbon accounting methods dating back to the Kyoto protocol, we know that lots of carbon held for one year can deliver the same climate impact as a smaller amount of carbon held for 100 years. If landowners are paid, on the margin, to defer harvests year over year, we can increase the average age of forests and quickly store additional carbon at the gigaton-scale. In fact, this is the most efficient method for storing additional carbon and making forests into a real climate solution, this decade. Read more about the efficiency of short-term carbon storage here and how this works at the landscape scale here.

Forest carbon protocols are currently experiencing a great deal of media coverage and scrutiny, and it’s vital that important questions like these are recognized and answered. To learn more about issues like permanence, additionality, and leakage in forest carbon, check out our white paper here.

Have questions or comments about any of my points? Let me know!