Forests are complicated enough—let’s not make it worse!
Refuting claims against California’s Forest Offset Protocol
By Andrea Tuttle, PhD
Blogs are great for intriguing findings and catchy conclusions. If we trust the source, we trust the stuff.
But when the intriguing findings are off base, it’s tough to bring attention to the rebuttals. California’s rules for carbon accounting of forest offsets have recently fallen victim to exaggerated claims in a policy brief, and the charges have sped through the blogosphere including this, this and other respected sites. Rebuttals from the California Air Resources Board (CARB) and the Climate Action Reserve have been posted, but have not received the same broad distribution. Members of the California legislature have queried CARB and CalEPA about the claims, and a response letter has been issued. Recently, the authors Haya and Stewart posted a response to the CARB rebuttal restating their contentions, but still not explaining the whole story. Although the reader needs to get a bit deep in the woods of forest carbon accounting, the skewed nature of the claims demands a serious response.
California is renowned for its work mobilizing climate solutions from all sectors. Along with electricity and transportation, forests are—and must be—a big part of the solution. Beyond offsets, the state is stepping up its game to capture forest benefits through incentives, grants, and new voluntary approaches. But forest offsets still remain an important mechanism within the cap-and-trade program for capturing the power of carbon sequestration through forest photosynthesis and mobilizing the participation of private forest landowners. Forest carbon projects have already secured large acreages of existing and future forest carbon stocks across the country using a market approach that puts a price on their value. Hard work has been invested in designing offset rules that respect the atmosphere and are feasible in the real world of forest management. While challenges to their validity warrant thoughtful review, overstated allegations need close examination.
Response to the claims
The alarming claim of the Haya policy brief states that “…82% of (forest offset) credits likely do not represent true emissions reductions due to the protocol’s use of lenient leakage accounting methods.” From this, one can only conclude that the highly respected California Air Resources Board, which regulates offset projects, has cooked the books and abused the atmosphere!
Unfortunately, the author has far overstated the claim. Importantly, the brief omits discussion of why the protocol is constructed the way it is, and fails to present the broader context surrounding deliberate crediting decisions that have been made.
As an overall response, the involved agencies find that the protocol’s conservative leakage accounting does not have a major impact on crediting, and an alleged “greenhouse debt” from initial crediting of carbon-rich forests does not occur. Further, the lens chosen to evaluate the protocols is the wrong one for evaluating the climate contributions from forests. The claims of extensive bogus crediting are highly exaggerated, are based upon an inappropriate citation, and should be viewed with a high degree of skepticism.
The nitty-gritty
Looking deeper into the claims, it takes a bit of technical unpacking, but here’s the issue: Carbon credits are issued to “Improved Forest Management (IFM)” projects that modify their management practices so as to store additional carbon above a business-as-usual (BAU) baseline. Carbon in both the forest and wood products is counted. A detailed set of rules and equations administered by CARB prescribes the metrics for demonstrating additionality.
The policy brief criticizes two aspects of the Forest Protocols: the amount and timing of the deduction for leakage over the 100-year life of a project, and an alleged “greenhouse gas debt” triggered at the beginning of some carbon projects. Neither of these subjects are new, and both received extensive consideration during protocol development. Both warrant further explanation.
Leakage refers to harvesting that moves elsewhere as a result of implementing a carbon project. For example, a project owner could move harvest from within a project boundary to another part of their ownership. Or, different owners could increase their harvest to meet market demand left unfilled by a carbon project. Both actions cancel out some portion of the carbon credits booked to a project. Therefore, a leakage deduction must be taken before credits are issued.
Leakage appears in two sections of the crediting equation. The general protocol assumption is that for every 1 ton of reduced harvesting caused by a Forest Project (measured as metric tons of carbon), the market will compensate with an increase in harvesting of 0.2 tons on other lands. This 20% deduction is found in the “Secondary Effects” equation, 5.10, which is applied each year to the difference in harvest volume between actual harvesting on the project and the harvest baseline under BAU. The deduction is applied to all carbon in the harvested trees (including standing, dead and unmerchantable trees, belowground biomass, and bark).
A second leakage adjustment appears as a 0.80 multiplier in Equation 5.1. This applies only to carbon in the wood products themselves (e.g. soft- and hardwood lumber, plywood), calculated per Appendix C. Although not clear from the explanatory text, this factor was included to avoid double penalizing the harvested wood products (HWP) that are produced from a project. That is, this avoids charging a second leakage deduction for wood products on top of the 20% leakage already charged to the project.
Further clarification by compliance protocol administrators would clearly be helpful. As an aside, it also seems the leakage deduction applies only in one direction against a project, i.e. when harvest on a project is reduced. But logically, should a project increase HWP production—such as when trees grow bigger over time and support larger harvests while still retaining carbon stock above baseline—we should likewise assume that others in the market will concomitantly decrease their production. In that case, the 20% leakage deduction ought to be adjusted downwards—but, this is not provided for in credit calculations.
Inappropriate citation
The brief contends the 20% leakage factor is too low and makes an exaggerated claim that over 80% of credits issued are bogus. This is based on extreme reading of a literature citation which both its author and CARB emphasize is inappropriate. The citation refers to a non-analogous example regarding leakage following complete shutdown of logging caused by federal policy change in the Pacific Northwest. However, the very premise of an “Improved Forest Management” project is that harvesting will occur periodically throughout the 100-year project life. The citation’s author disputes the use of his research to support the claims noting that timber flow is not the same as carbon flow, and that land use change and project location cause the size of a leakage deduction to be highly variable.
First-year crediting and alleged “greenhouse gas debt”
A separate claim regarding an alleged “greenhouse gas debt” also warrants further discussion. It goes to the heart of an important decision that was made to incentivize the retention of forest stands that already support high carbon stocking.
First, a bit of context. Historically, a significant portion of California’s private forests have been heavily harvested, meaning that carbon stock has been reduced, in non-technical terms, “below the forest’s natural holding capacity.” For example, redwood and ponderosa pine stands on some private lands historically held, on average, more than 10 times more carbon than their current stocks. No incentive was in place to assist landowners in rebuilding those stocks, and many acres languished in depleted, understocked conditions. The “Improved Forest Management” offset protocol offered landowners the opportunity to rebuild carbon stocks by managing for higher productivity, growing bigger trees and on longer rotations. In an IFM project, the forest can still be periodically harvested, but at lower intensity, especially in early years. Over time, as carbon accrues in larger trees, harvest volume might actually increase while still retaining higher carbon stock than at the start of the project. Larger harvests diminish the effects of market leakage. Hence the importance of a long time horizon in evaluating project performance.
But in limited instances, some forests still do retain a relatively high level of carbon stocking. This indicates the landowner has undertaken low-intensity harvest in the past, in spite of prevailing economic advantages to harvest more. The result is an unusually carbon-rich forest compared to average stocks in the surrounding region. The decision was made that in these rare but ecologically important properties, initial year credits were permitted to be issued. Not crediting these important carbon sinks would create an incentive for aggressive harvest prior to initiating a project, with resulting emissions and many years needed to restore those formerly stored stocks back to their prior level, much less build more.
With respect to leakage from these high carbon sites, in one sense the market has already adjusted to, and reflects, the historically lower contribution of wood products from those sites. The so-called “leakage” has already occurred, so does it need to be charged again? This notion would need further discussion, but in any event, forest management is generally evaluated over a time span relevant to tree growth and harvest cycles, rather than point-in-time snapshots. Leakage and additionality must be assessed in light of the 100-year time frame of a project, not just the moment of project initiation, which the policy brief fails to do.
The challenge to protocol designers was to develop a standardized approach that anticipates future events but can’t know exactly when they will occur, such as increased harvest in response to market upticks, or to pay down debt. Rather than adopting a see-saw approach that issues credits and then charges reversals as each event occurs, it was decided to adopt an averaging approach that is based on comparison between modeled growth and actual on-site carbon stock and wood product production.
After project initiation, harvest volume and leakage deductions are reported every year. Recall that no credits are issued in advance of detailed, ground-based site inventory, baseline quantification, comparison to starting carbon stocks, and independent third-party verification.
Timing of forest climate benefits
The associated claim that forest carbon projects do not provide instant climate benefits appears to lack understanding of forest management. The timing of forest contributions to climate mitigation cannot be expected to be the same as the instant gains from destruction of methane or ozone depleting substances. If we want to incorporate forests into the suite of climate solutions at all, we need to recognize and accommodate the jagged line of forest growth and emissions over time, and judge success by the upward trend of additional carbon stocking that accrues over the life of the project.
It is noted that the literature on leakage rates is limited and a new review of leakage factors may be warranted. The Climate Action Reserve has a revised Version 5.0 of the protocols in the public comment process, and the “Offsets Compliance Task Force” pursuant to AB 398 offers another opportunity for discussion.
The Forest Protocols in bigger context
So—mischaracterizations happen, and it is understandable since forest carbon accounting is complicated. But since the leakage issue is out there, it’s worth taking advantage of the teaching moment to broaden the discussion. Many more aspects of protocol design are also worth further explanation.
An associated white paper (Tuttle, 2019) consolidates a review of the history, standards and purposes that underlie the 19-year development of California’s forest offset protocol. It is written through the eyes of a participant who was at the table during the first, early days of protocol development, and has since watched forest and climate policy develop in California and internationally.
The timing is right to refresh understanding of protocol details and restore confidence in their rationale and methodology. But equally important is to have an explanation on-hand to quickly help counter the serious misinformation on offsets that sporadically bubbles up. The white paper reviews the fundamental concepts that define an offset (real, additional, permanent, verifiable, enforceable), and the reasoning behind the decisions made in protocol design.
Protocol developers—comprised of diverse stakeholders and agency specialists—have worked hard to design a compliance tool that allows forests to participate in climate solutions and is feasible to use—though admittedly detailed and expensive to implement.
We cannot ignore the power of forests and landscapes in helping to counter growing CO2 concentrations in the atmosphere. It is hoped that better understanding of the offset standards for forests will help temper unwarranted attacks, and encourage forest owners to provide more real, additional and rigorously quantified forest offsets as part of a comprehensive set of climate solutions. The enormity of the climate change challenge means that forests must remain a strong contributor to our ‘all-hands-on-deck’ response.
Acknowledgement: Sincere thanks to the diverse team of protocol specialists who have reviewed and contributed to this response.
References:
California Air Resources Board, 2015. Compliance Offset Protocol U.S. Forest Projects. Adopted June 2015. https://www.arb.ca.gov/cc/capandtrade/protocols/usforest/forestprotocol2015.pdf
California Air Resources Board, 2019. U.S. Forest Offset Projects May 30, 2019 U.S. Forest Offset Projects https://www.arb.ca.gov/cc/capandtrade/offsets/overview.pdf
California Air Resources Board and CalEPA, 2019. Letter to Sen. Bob Wieckowski, June 13. https://www.pacificforest.org/wp-content/uploads/2019/07/Wieckowski-letters-2019.pdf
Climate Action Reserve, 2019 a. Forest Carbon Accounting for IFM Projects. http://www.climateactionreserve.org/how/protocols/forest/forest-carbon-accounting-for-ifm-projects/
Climate Action Reserve, 2019b. Key Accounting Principles for Improved Forest Management Projects within the Forest Protocol. May 22, 2019. https://www.climateactionreserve.org/wp-content/uploads/2019/05/Forest-Carbon-Accounting-Principles-for-IFM-Projects-May-2019.pdf
Fowlie, M., 2019. “Are Trees Getting Too Much Climate Credit…or Not Enough?” Energy Institute Blog, UC Berkeley Haas School of Business, June 10, 2019. https://energyathaas.wordpress.com/2019/06/10/are-trees-getting-too-much-climate-credit-or-not-enough/
Haya, B., 2019. “Policy Brief: The California Air Resources Board’s U.S. Forest offset protocol underestimates leakage”. Berkeley Carbon Trading Project Policy Brief, Center for Environmental Public Policy, Goldman School of Public Policy, UC Berkeley (May 2019) https://gspp.berkeley.edu/assets/uploads/research/pdf/Policy_Brief-US_Forest_Projects-Leakage-Haya_4.pdf
Haya, B. and W. Stewart, 2019. Response to comments by the California Air Resources Board, May 22 2019. July 12, 2019. https://gspp.berkeley.edu/assets/uploads/research/pdf/Response_to_comments_by_ARB_on_leakage_under_forest_protocol_2.pdf
IPCC, 2018. Summary for Policymakers. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. Masson-Delmotte, V., P. Zhai, H.-O. Pörtner et al. (eds.). World Meteorological Organization, Geneva, Switzerland, 32 pp. https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-global-warming-of-1-5c-approved-by-governments/
Murray, B. 2019. Letter to members of the California State Legislature, June 3. Duke University, Durham, NC. https://www.pacificforest.org/wp-content/uploads/2019/07/Murray-letter-20190603.pdf
Song, Lisa. 2019. An even more inconvenient truth. Why carbon credits for forest preservation may be worse than nothing. ProPublica, May 22, 2019. https://features.propublica.org/brazil-carbon-offsets/inconvenient-truth-carbon-credits-dont-work-deforestation-redd-acre-cambodia/
Temple, J., 2019. Landowners are earning millions for carbon cuts that may not occur. MIT Technology Review. Apr 18, 2019 https://www.technologyreview.com/s/613326/californias-cap-and-trade-program-may-vastly-overestimate-emissions-cuts/
Tuttle, A., 2019. Affirming California’s forest offset protocol: A climate tool tailored to a purpose. Pacific Forest Trust, Aug 23, 2019. https://www.pacificforest.org/wp-content/uploads/2019/08/tuttle-protocol-white-paper-20190823.pdf
Wear, D.N. and B.C. Murray. 2004. “Federal Timber Restrictions, Interregional Spillovers, and the Impact on U.S. Softwood Markets.” Journal of Environmental Economics and Management 47(2):307-330. https://www.sciencedirect.com/science/article/abs/pii/S0095069603000810
AUTHOR
Andrea Tuttle
Andrea Tuttle was Director of the California Department of Forestry and Fire Protection during the original development of the California Climate Action Registry and forest offset protocols. She has since tracked the development of California’s climate program, consulted on forest and climate policy domestically and internationally, and for 11 years attended the UNFCCC Conference of the Parties as an Observer focused on forests. She now serves on several forest and energy advisory boards including the U.S. Endowment for Forestry and Communities, the Schatz Energy Research Center, and the Pacific Forest Trust. She is twice a Cal alum with a BA in biological sciences and PhD in environmental planning.