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Carbon Offsets: New Boon for Business? Or Trouble for the Forests?

| Friday July 17th, 2009 | 0 Comments

By Deborah Fleischer, Green Impact
No matter how you feel about carbon offsets, if the The American Clean Energy and Security Act becomes law, offsets, both domestic and international, will be a central component.
According to Carbon Positive:

The US cap and trade bill currently stands to deliver a huge stimulus to the clean energy and forest carbon sectors in North America and in the developing world. Whatever final form the scheme takes, it will produce the world’s biggest single carbon market from 2012, eclipsing the EU ETS. And it’s already clear generous international carbon offset provisions and linkages with other national emissions trading schemes will ensure the carbon market spreads well beyond U.S. borders. This is particularly so for the emerging avoided deforestation, or REDD, sector.

Reforestation and protection a key solution
Tropical deforestation accounts for twenty percent (20%) of global greenhouse gas emissions. Therefore, the support of forest carbon projects that prevent forest loss or increase forest cover through reforestation is important.
In a recent piece in the New Yorker, James Hansen comments that in addition to a moratorium on any new coal plants and phasing out existing ones, reforestation practiced on a massive scale could begin to draw global CO2 levels down. While he thinks the Waxman-Markey legislation is a sham, and may not support offsets, he supports the concept that reforestation is a legitimate solution to climate change.
EPA would oversee international offsets
While farm-state Congress members won a transfer of domestic offsets responsibility from the EPA to the US Department of Agriculture, this change does not apply to the international offsets. Responsibility for the integrity of these offsets, set to be dominated by REDD credits, will remain with the EPA.
Global carbon market
According to Carbon Point:

A major benefit of such large offsets provisions would be its role in its contribution to building a global carbon market where the advantage of worldwide scale allows emissions to be cut more cheaply. Thus, there is big scope for carbon project developers in the US and worldwide to produce emissions reduction activities to earn carbon credits to standards that will be acceptable under the regulations of the US scheme.

Projects to avoid deforestation in vulnerable areas of forest in developing countries would earn offset credits recognized in the US. The intention in the bill is to have the US government approve host countries for participation for REDD offsets based on their implementation of a national forestry plan. The details on this portion of the bill are still being fleshed out and could change in the Senate.
The challenges
There are a variety of concerns regarding forestry-based offsets including:
1. The lazy factor: That offsets can encourage “same old behavior” where organizations indulge in their same behavior without making any changes, yet boast that they are carbon neutral.
2. Additionality: This is the concept that begs the question, “Would the project happen anyway, without the purchase of offsets?” If a project would happen anyway, the argument that one is offsetting does not stand scrutiny.
3. Certification: There is no one industry standard for certification of offsets. Therefore, it is difficult to compare different projects. The proposed requirement to have a national forestry plan could be difficult and timely to implement in developing countries.
4. Permanence: It is difficult to guarantee the permanence of the forests, which may be susceptible to clearing, burning or mismanagement.
5. Leakage: This concept is related to forestry-based projects that are working to protect existing forests. If the project does not work with the local communities to provide alternative forms of livelihood and new habits, it is possible that the impact to the forest will simply be transferred to an adjacent area, not resulting in an offset.
Forests and trees underpin livelihoods
According to SciDev.net, for REDD, one challenge is how to monitor and measure the impact of actions – in particular how to set baselines. Most natural forests in Africa, which accounts for 16 percent of the world’s forests, are under no form of management or administration, which makes it very difficult to determine how much carbon they hold.
Perhaps most importantly, making REDD work for Africa means recognizing the crucial role that forests and trees play in African socioeconomic development and addressing the underlying causes of deforestation and degradation. Forests and trees support key sectors in many African economies, including crop and livestock agriculture, energy, tourism and water.
So any strategy to address climate change must also enhance the livelihoods of forest-dependent populations. But it is not clear how the bulk of the African population that depends on natural forests for their livelihoods would access this, or receive alternative livelihood support, under REDD.
Deborah Fleischer is the founder and president of Green Impact, providing strategic environmental consulting services to mid-sized companies and NGOs who want to launch a new green initiative or cross-sector collaboration, but lack the in-house capacity to get it up and running. She brings expertise in sustainability strategy, program development, stakeholder partnerships and written communications. And you can follow her occasional tweet at GreenImpact.


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