Grim Study Shows 10 Years of 'Carbon Offsets' in California Had No Climate Benefit

Many of the companies promising net zero emissions to protect the climate are relying on vast swaths of forests and what are known as carbon offsets to meet that goal.

Carbon offsets balance out a company's carbon emissions by paying for trees to absorb carbon dioxide from the air. The company can claim to have reduced its net impact on the climate.

Researchers have suspected for a long time that forest offsets might not be doing much for the climate.

When we looked at satellite tracking of carbon levels and logging activity in California forests, we found that carbon isn't increasing in the state's 37 offset project sites any more than in other areas.

The findings add to a growing list of concerns about forest offsets.

Studies show that projects are often overcredited at the beginning and may not last as long as expected. There is a lack of real climate benefit over the last decade of the program.

We are able to fix the problem.

How forest carbon offsets work

Trees capture carbon dioxide from the air and use it to build mass, locking the carbon away in their wood for the life of the tree.

Carbon credits can be given to property owners who keep their carbon stocks above a minimum level. The third-party verifiers help the land owners take inventory.

This process has only been about measuring carbon levels relative to baseline and not using satellite technologies that we explored.

Private companies can buy carbon credits from forest owners and use them to protect trees that would otherwise be cut down. Large oil and gas companies use offsets to meet up to 8% of their state mandated reductions in emissions.

During the UN climate conference in November 2022, forest offsets and other natural climate solutions received a lot of attention.

California has one of the largest carbon offset programs in the world, with tens of millions of dollars flowing through offset projects, and is a model for other countries that are planning new offset programs.

From the individual to the international level, offsets are playing a growing role in climate policy. They need the best science to back them up.

Three potential problems

Satellite data was used to track carbon levels, tree harvesting rates, and tree species in the study.

Satellites have a better record than on- the-ground reports. Since 1986, we've assessed all of California.

There are three problems that show a lack of climate benefit.

1. Carbon isn't being added to these projects faster than before the projects began or faster than in non-offset areas.
2. Many of the projects are owned and operated by large timber companies, which manage to meet requirements for offset credits by keeping carbon above the minimum baseline level. However, these lands have been heavily harvested and continue to be harvested.
3. In some regions, projects are being put on lands with lower-value tree species that aren't at risk from logging. For example, at one large timber company in the redwood forests of northwestern California, the offset project is only 4 percent redwood, compared with 25 percent redwood on the rest of the company's property. Instead, the offset project's area is overgrown with tanoak, which is not marketable timber and doesn't need to be protected from logging.

How California can fix its offset program

There are recommendations for California to improve its protocols.

Satellite data can be used to verify that forests are being managed to protect or store more carbon. Foresters could use it to create more realistic baselines.

Satellite data can be used to make carbon offsetting more transparent. California can not put offset projects on lands that are already being protected. Several projects owned by the groups had low harvests.

California could improve its offset contract protocols to make sure that it doesn't happen in the future. There is a penalty for doing so, but it might be too low.

If inflation exceeds the liability, landowners may be able to begin a project, receive a huge profit from the initial credits, cut down the trees in 20 to 30 years, pay back their credits plus penalty, and still come out ahead.

In wildfire prone California, forest offsets are vulnerable to climate change. According to research, California underestimates the climate risks to forest offset projects.

Even though multiple projects have been damaged by recent fires, the state requires only 2% or 4% of carbon credits to be set aside in an insurance pool. The insurance pool can account for lost carbon when there is a fire.

As the climate warms, the burned area in the pool may soon be exhausted. The insurance pool needs to be large enough to cover the bad weather.

Investing in solar and electrification projects in low-income urban areas may provide more cost-effective, reliable and just outcomes, considering our findings around the challenges of forest carbon offsets.

Without improvements to the current system, we may be underestimating our net emissions, contributing to the profits of large emitters, and distract from the real solutions of transitioning to a clean energy economy.

James Randerson is the Professor of Earth Science at the University of California, Irvine and is also a post-doctoral scientist.

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