California's Pacific Gas and Electric Company (PG&E) has announced the purchase of 214,000 metric tons of carbon credits standardized through the California Climate Action Registry (CCAR) project protocols – the first sale of offsets certified to these standards, and a significant step forward for the domestic US carbon markets.
Although it is not decided yet whether California legislators will proceed with a cap-and-trade system, the CCAR protocols are expected to be the carbon standards to which such offsets must comply.
Unveiled at the Carbon America Forum in San Francisco on February 27, the credits will be used to fulfill customer orders under PG&E's "ClimateSmart" initiative, a voluntary program that makes it possible for customers to offset their greenhouse gas emissions from energy use. Of the total, 200,000 tons will be generated by the Conservation Fund through sustainable forestry in the Garcia River Forest and 14,000 tons of will come from Sempervirens Fund's Lompico Headwaters Forest, located in Santa Cruz County.
Laura McLendon of Sempervirens Fund sees the carbon finance flowing from the protection of redwoods as placing value for the first time on the non-extractive uses of a forest. In terms of dollars and cents, a forest's value is usually measured by what can be taken out or how it can be developed. As humanity wakes up to the fact that it is causing climate change through the release of greenhouse gasses such as CO2, endeavors that keep carbon locked in the trees and soil of an intact ecosystem have a whole new business case.
With the California Air Resources Board's adoption of the CCAR Forest Protocols, forest-based climate change projects have taken another step forward in market acceptance. Indeed, it is this certification and backing that PG&E required for admitting offsets into their ClimateSmart program.
"It is our responsibility to show that forest projects are a legitimate part of the solution" says McLendon. "As consumer confidence increases, I think there will be a shift to include more forest projects and get beyond the skepticism. This is just the beginning. As the market evolves, the value of forests doing what they naturally do, will increase."
According to the Intergovernmental Panel on Climate Change (IPCC), land use change, primarily deforestation, has caused a third of anthropogenic greenhouse gas emissions since 1850, while the World Resources Institute calculates that deforestation and forest harvest currently contributes to just over 20% of annual greenhouse gas emissions. This adds up to both a massive debt and an excruciating deficit in the earth's ability to store carbon dioxide in its living systems.
The Kyoto Protocol's Clean Development Mechanism (CDR), the International Organization for Standardization's ISO 14064-2 and the Voluntary Carbon Standard, launched jointly by The Climate Group and the International Emissions Trading Association (IETA) all include forest-based projects as an offset-generating activity. California's voluntary offset system, which would form the basis of any future regulatory cap and trade system in that state, does so as well. Based on the fact that deforestation causes more greenhouse gas emissions than any sector other than electricity generation, and that its remedy is admitted under the major compliance and voluntary mitigation regimes, it is fair to say that forest-based carbon offsets must play a major role in human efforts to combat climate change.
Critics raise concerns about science's ability to measure forest carbon uptake and offset permanence – views which may have been valid a decade ago, but have since been eclipsed by new technologies.
Modern advances in CO2 modeling, such as CO2fix, allow accurate projection of the atmospheric benefit of forest projects by calculating carbon content of tree leaves, branches, trunks, roots, woody detritus and soil, plus how this carbon will be stored and released over time. The CO2fix model is part of the "Carbon sequestration in afforestation and sustainable forest management" (CASFOR) project jointly undertaken by ALTERRA in the Netherlands, Instituto de Ecologia from the National University of Mexico, the Centro Agronomico Tropical de Investigation y Ensenanza (CATIE) in Costa Rica, and by the European Forest Institute in Finland. The model uses annual tree-growth increment, species growth ratios, temperature and moisture data in order to accurately determine carbon storage in the forest.
Permanence of an ecosystem-based offset is critical to assess, but in most cases is made out as much more of a boogeyman than is warranted by the facts. Planting site-appropriate species, geographical diversity of project sites (to mitigate risk of catastrophic losses) and implementation of a healthy buffer of unsold carbon benefits can be designed into all projects that rely on sequestration of biological carbon.
In reality, most of the objections raised regarding forestry carbon offsets are pertinent to project design rather than an indictment of the sector itself. With the entrenchment of high quality standards for forestry offsets, the earth and atmosphere can look forward to progressive deployment of rigorous, effective forest projects. The Sempervirens Fund, The Conservation Fund, PG&E and all the people working towards climate change solutions are to be congratulated.
Joseph Pallant, B.Sc., MBA, founded Carbon Project Solutions in 2006 to help companies develop and standardize carbon offset projects for voluntary and compliance markets. He has helped originate and develop projects under the Kyoto Clean Development Mechanism and authored ISO 14064-2 Validated project methodologies. His current focus includes assisting companies to set up their business interaction with the carbon market, and designing the recently announced Globe Carbon Registry.