A new study examining the efficacy of paying to preserve forests finds that carbon offsets do produce genuine emissions reductions.
The study, published in the journal Frontiers in Ecology and the Environment by three Stanford University researchers, examines California's carbon offset program. It allows businesses to fund forest preservation in lieu of turning in some of their allowances under the state's cap-and-trade system for greenhouse gases.
The market currently lets businesses use offsets for up to 8 percent of their total emissions under the cap, although that percentage is set to decrease after 2020 under the cap-and-trade extension bill, A.B. 398, signed by Gov. Jerry Brown (D) last month.
In California's program, offsets from forests totaled 1 percent of emissions under the cap in 2015, or roughly 4.7 million metric tons of carbon, according to the study. The credits were distributed among 39 forestry projects, 16 of them within California.
The study evaluates the “additionality” of the projects: whether their emissions reductions would have occurred without the financial incentives provided by the sale of offset credits.
It points out that most projects are owned by profit-seeking entities, rather than conservation-minded nonprofits that might be expected to have preserved the forests anyway. Nonprofits own 26 percent of forestry projects, while timber companies own 36 percent, investment firms 15 percent, individuals 13 percent and Native American tribes 10 percent.
The study says 64 percent of projects are on land that is or has been actively logged just prior to the project's start date, indicating that the projects would indeed not have happened without the financial incentive of offsets.
“Forests without active logging could enter the offset program without major adjustments to their forest management, but associated emissions reductions would also be less likely to be additional,” the authors wrote.
Offsets have come under fire from forest advocates who say they give a misleading impression that forest preservation should be relegated to a subset of market-based policies, as well as from environmental justice groups that want carbon reductions to be accompanied by decreases in localized air pollutants. A.B. 398 requires half of offsets used after 2020 to be sourced from projects that “provide direct environmental benefits in state.”
The study also examines the question of whether offsets “resemble the purchase of indulgences,” easing businesses' perceived need to reduce emissions internally. It concludes that they do not, at least so far, because their use is relatively limited.
“Although their total use is constrained, offsets could still act as indulgences if overused in the early stages of the program,” the authors wrote. “If the program approaches the 8 percent maximum, then it would be appropriate to reassess whether offset credits have too great an impact on other emissions reductions.”
It also finds that offset projects include several environmental “co-benefits,” according to voluntary reporting by property owners. Ninety-two percent of project owners reported at least one type of co-benefit; improved water quality and recreation were the most often cited.
The study was funded by the S.D. Bechtel Jr. Foundation, the Alexander von Humboldt Foundation, and Stanford's Anne and Reid Buckley Fund and Dachs Fellowship.
Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.