Applying CATF’s Ground-Truth Forest Carbon Protocol Assessment to California
Earlier this week, Clean Air Task Force (CATF), alongside a team of leading U.S. forest carbon scientists, published a deep dive into the rules that govern a wide range of forest carbon credit certifications relevant to North America. The assessment examines rules of the road for quantifying carbon credits and identifies what works well, where there are weaknesses, and opportunities for improvements to ensure that forest carbon credits achieve their promised climate benefits.
It includes a scorecard for each analyzed protocol, including California’s U.S. Forest Projects offset protocol. From CATF’s perspective, California’s Cap-and-Trade Program should be reauthorized, as it is important for reducing emissions in the state and forest carbon credits play an appropriately limited role in the program. The Ground-Truth assessment provides recommendations for how the state could strengthen the protocol in the next regulatory update.
As the study notes, forests hold enormous potential to help mitigate climate change by absorbing carbon dioxide from the air and storing it away in trunks, branches, and soils. In fact, forests worldwide take up nearly 30% of annual carbon dioxide emissions every year.i But the continued strength of the forest carbon sink is uncertain due to deforestation, insect outbreaks, disease, fire, and climate change itself.
The sale of forest carbon credits, which are traded in voluntary and compliance carbon markets, is one important way to fund management activities that can protect and boost forest carbon storage. Most forest carbon credits are traded in voluntary markets where buyers purchase credits to satisfy self-imposed climate targets. Carbon credits in compliance markets, like the California Compliance Offset Program, are part of mandated emissions reduction systems and are subject to regulations that dictate how credits are quantified, issued, and used. This allows for greater scrutiny over quality than a voluntary system without comparable regulatory teeth.
In California, forest carbon credits generate funding for nature-based projects through the Compliance Offset Program, part of California’s broader Cap-and-Trade Program that is an important regulatory tool for drawing down carbon emissions. There are several qualifying offset project types in the California Compliance Offset Program, but roughly 80% of offsets issued to date are from the U.S. Forest Projects offset protocol.ii In California’s program, offset credits can only be used to satisfy a limited amount (4-6% depending on year) of a company’s overall compliance obligation under the California Cap-and-Trade program.iii The rest must come from emissions reductions within the covered sectors. California’s state-wide emissions declined by roughly 15% over 10 years following initiation of the Cap-and-Trade program in 2012.iv
CATF’s assessment scored some elements of California’s current forest protocol that lays out the requirements for carbon credit certification as robust, such as the 100-year monitoring period for stored carbon in forests, and others as weak, like the risk assessment procedure. While high-quality credits are possible under the current protocol, the bar needs to be raised to guarantee that credits are delivering on their promise. The assessment provides a set of recommendations to help improve protocols across the board to help to realize the full potential of forests to mitigate climate change.
The California Air Resources Board (CARB), the agency responsible for implementing the California Compliance Offset Program, will undergo a planned protocol update through a formal rulemaking process in the near future. This is an important opportunity to adopt improvements to the offset protocol that can lead to more reliably high-quality credits, within administrative and legal limits. CARB has engaged a contract for updated data and tools related to the risk assessment procedure for buffer pool contributions that will inform updates to the protocol.v
California’s Cap-and-Trade Program is currently up for reauthorization, prompting a comprehensive review by the Legislature—not just of the offset mechanism, but of the entire system. The question of forest carbon credit use was outside of the scope of the Ground-Truth assessment. CATF supports reauthorization of the program as a critical tool for reducing emissions in California, and forest carbon credits play an appropriately limited role in the program. The state should seize the opportunity to incorporate recent scientific advances that would strengthen their forest carbon crediting protocol through the rule-making process, to the extent allowed by law.
i Global Carbon Budget 2024 https://globalcarbonbudget.org/gcb-2024/. The total annual land uptake (primarily driven by forests) as a percentage of the sum of annual fossil fuel and land use change emissions is 29%. Value published on Slide 50 of Presentation.
ii ARB Offset Credit Issuance Table. https://ww2.arb.ca.gov/our-work/programs/compliance-offset-program/arb-offset-credit-issuance
iii Compliance Offset Program – About. https://ww2.arb.ca.gov/our-work/programs/compliance-offset-program/about
iv California Greenhouse Gas Emissions from 2000 to 2022: Trends of Emissions and Other Indicators. https://ww2.arb.ca.gov/ghg-inventory-data Figure 1. The 15% decline represents the change reported from 2012 to 2022 as a fraction of 2022 reported emissions.
v CARB Public Workshop US Forest Projects Compliance Offset Protocol, Nov 30, 2022. https://ww2.arb.ca.gov/sites/default/files/2022-11/nc-CARBslides20221130.pdf
