“It was really exciting to see, in this moment where it’s hard to find any positive news on climate change, here’s this very small program that looks like it’s actually working so far,” said Christa Anderson, a PhD student in environment and resources at Stanford University and the new study’s lead author. Anderson conducted the study with Stanford colleagues Christopher Field and Katharine Mach.
The program is built into California’s existing cap-and-trade system, a carbon-pricing initiative that aims to reduce greenhouse gas emissions by placing a ceiling on the amount of carbon companies are allowed to emit and penalizing those that exceed the limit. The cap-and-trade system also establishes a market for the buying and selling emissions permits, creating a financial incentive for companies to reduce their own emissions and sell the extra savings.
As part of this trading framework, companies may also buy offsets from forest managers all over the country, guaranteeing that they’ll preserve their trees and allow them to store up carbon dioxide. By buying these offsets, companies can adhere to California’s emissions-cutting policies without reducing their own carbon output directly.
The program is controversial among some state residents and environmental groups, who argue that it allows companies to slack off on their own emissions reduction efforts and continue polluting California’s air. They’ve also suggested that the forests selling offsets would likely be storing up carbon regardless and that the program may not actually produce any climate benefits.
The controversy has resulted in some recent adjustments to the program. Just last month, California lawmakers approved a 10-year extension of the cap-and-trade scheme, which was originally slated to terminate in the year 2020. The post-2020 system will include tighter limits on the amount of forest offsets the market will offer.
Now the new study, published last week in the journal Frontiers in Ecology and the Environment, suggests some of the concerns surrounding the program may not actually be cause for worry — at least for now.
For one thing, forest offset credits only account for 2 percent of all credits in California’s cap-and-trade system, the authors note. Currently, the program allows this percentage to climb to a maximum of 8 percent, a level that might be cause for concern, Anderson suggested. But at 2 percent, the use of forest offsets remains a relatively minor component of the system.
“So that question of are offsets allowing greenhouse gas emitters to avoid responsibility of reduction — probably not in this case,” Anderson said.
The authors also conclude the program does, in fact, reduce emissions that wouldn’t have otherwise been cut. Only about a quarter of the forests participating in the program are already owned by conservation groups, meaning the majority of participating forest managers would not necessarily have opted to preserve their trees without the purchase of offsets. In fact, the authors note, more than half of the participating forests were actively being logged before becoming part of an offset project.
The researchers also point out the offsets account for uncertainty about the future of preserved forests, whose carbon-storing potential could be affected by a variety of factors, including wildfires or disease outbreaks. This ensures that program doesn’t overestimate the value of a credit.
Overall, about 25.5 million tons of carbon have been credited as part of the forest offset program since it was first developed, according to Anderson. And the program comes with various side benefits as well — namely, the conservation of forests that might otherwise have been destroyed and the preservation of habitat for wild plants and animals.
“I think this kind of work is really important in the sense that it’s looking closely at what is actually happening as we develop carbon markets,” said Michael Wara, a former climatologist and environmental law expert at Stanford University. Wara was not involved with the new research, but helped advise the development of the proposal that extended California’s existing cap-and-trade scheme.
But while he acknowledges the evidence suggests the program is working so far, he said there are still some uncertainties that should be further explored.
For instance, he noted, the program offers higher initial payments for forests that have greater amounts of carbon already stored in them before the offset project begins. This aspect of the program could introduce a kind of participation bias, in which forest owners with greater amounts of carbon already stored on their land are more likely to opt into the program in the first place. Without further studies, it’s difficult to say whether participation in the program and overall emissions reduced would be greater or smaller without such a bias.
“I don’t think there’s enough evidence in this paper to know whether it’s a good thing or bad thing,” Wara said.
Anderson also suggested the program could do a better job of accounting for the future impact of climate change when considering the uncertainties facing future forests’ carbon-storing potential.
“You could imagine the state adding in some kind of metric and saying because of climate change in this area we think we have a greater risk of fire, or bark beetle disease and death in trees,” she said. “And so we need to account for that risk and deduct credits based on that higher risk.”
Wara pointed out critics of the program still have some valid concerns, emission reductions aside. While it’s true that forest offsets make up a fraction of the credits used in California’s cap-and-trade scheme, it does mean that some companies are using it to put off reducing their own emissions, meaning they’re probably not reducing their production of other air pollutants either.
“In some sense, forest carbon is trading one kind of co-benefit for another kind of co-benefit,” Wara said. “It’s not strictly a benefit, it’s a trade-off, because we’re going to burn more carbon in California in exchange for storing more carbon elsewhere.” Some of the fiercest critics of forest offsets are often people who live in or advocate on behalf of communities that are disproportionately affected by air pollution, he added.
But despite these concerns, the new research suggests the program has probably been effective at producing its primary intended outcome — reducing greenhouse gas emissions overall. And that’s encouraging news for a state that has gone to great lengths to establish itself as a leader on climate change under the Trump administration.
The concept of a carbon offset is “a super complicated thing to get right,” Wara noted. “And it’s something that it appears, based on the evidence in this paper, that California may have gotten mostly or more or less right. I don’t think it’s an open and shut case, but this paper has evidence that’s suggestive of that fact.”