Forestry

Summary


Preventing deforestation is a key part of fighting the climate crisis, but forestry carbon offsets suffer from a number of problems that make it difficult to know their true impact. It is difficult to measure the contribution of any forestry offset project, as there is limited rigorous evaluation of the effectiveness of forestry interventions. Of particular concern is “permanence”, which refers to the fact that in order to keep CO2 out of the atmosphere, trees must stay alive for many years. This adds an additional layer of uncertainty to any forestry project that is very difficult to resolve. At this moment, we have not found any forestry offsets that we feel confident recommending, but we continue to search for high-quality projects that can resolve these difficulties.



Given the limited evidence on the effectiveness of forestry interventions and concerns over leakage and permanence, we have not yet been able to find any forestry offsets we can recommend with confidence. But we are continuing to look for high-quality forestry offset projects.

Forestry as a carbon offset


Forestry offset projects generally fund NGOs working to increase forest cover. There are two main types of projects. The first are forest conservation projects. These projects work with local communities to prevent deforestation, through establishing forest management plans, providing alternative livelihoods, or simply offering cash payments (known as “payment for ecosystem services”, or PES). The second type of project involves increasing forest cover by planting trees (also known as “afforestation” or “reforestation”).


Causality


Planting trees seems to be an obvious way to reduce atmospheric carbon dioxide: photosynthesis pulls carbon dioxide and water from the environment and produces oxygen and glucose in return. Much of this carbon dioxide is stored in the wood of the tree, sequestering it from the atmosphere as long as the tree is alive. (Once a tree dies its biomass eventually decomposes, releasing some carbon back into the atmosphere.) The reduction in CO2 suggests that tree planting should be a clear winner for carbon offset markets.


Unfortunately, it is hard to know the net contribution of any tree or forest to global carbon dioxide or global warming. This recent article in the journal Nature discusses the difficulty of assessing the effect of trees on climate change. While direct carbon capture likely has a cooling effect, trees emit other gases into the atmosphere, some which may have warming effects. Additionally, trees can affect warming through changing the earth’s reflectivity of sunlight (known as an “albedo” effect). For example, conifers with dark leaves in far northern forests tend to absorb a lot of heat relative to highly reflective snow cover, reducing or even eliminating the positive effects of their carbon capture.


This research is highly controversial, and many climate scientists believe that increasing forest cover is a key tool in fighting climate change. However, it is safe to say that our understanding of the relationship between trees and climate is still evolving and will improve with more direct measurement.


Even under the assumption that increasing the number of trees unambiguously fights warming, establishing the causality of any given forestry project on the number of trees can be difficult. For example, some forestry offset projects aim to prevent deforestation by paying landowners to not cut down their trees - but how can you really know that they would have cut down the trees without the credit? Organizations like Gold Standard that sell offsets set detailed standards and require projects to document the history of the land and suggest what would have happened in the absence of credits. But there is limited rigorous evidence using valid counterfactuals on the effect of forestry interventions. Without a convincing counterfactual it is hard to trust claims of the amount of change in forest cover.


Forestry projects can also suffer from “leakage” – the concept that preventing deforestation in one area may just cause it to increase in other areas. This is likely true if the underlying demand for non-forested land is not addressed. For example, a project in Brazil might seek to protect a certain forested area from being converted to pasture land, but if the ranchers’ demand goes unmitigated they will likely just shift their activities to another forest where the project is not operating. Whether or not there is leakage in a given project depends heavily on the underlying reason for deforestation, as well as the outside options for the people who are demanding the deforestation.


Forestry carbon offset projects do not try to directly measure greenhouse gas emissions or quantify other contributions to warming, presumably because doing so would be prohibitively expensive. Instead, program staff model carbon capture based on the number and type of trees planted. But project implementers face the incentive to exaggerate claims about the number and type of trees, as well as various forest management practices that affect net carbon reduction. Agencies such as Gold Standard address this by requiring periodic audits, but these are generally contracted by the program implementer, which presents a conflict of interest.


In the public policy literature, there are few rigorous impact evaluations of forestry interventions. One exception is a recent RCT by Jayachandran et. al. (2017) published in the journal Science. This RCT studied a program in Uganda in which farmers were paid to not cut down their trees. They indeed found decreased deforestation compared to control areas, and established that leakage was unlikely to be occurring.


Overall, it is difficult to validate the causality of any given forestry project. Forestry projects are likely to actually cause GHG reductions in the following cases:


  • They take place in tropical climates where the albedo effect is less worrisome.

  • The project is planting trees in land without current forests OR is guarding against a clear counterfactual of deforestation.

  • Based on the analysis of the causes of deforestation, there is little chance of “leakage”, in which deforestation demand is satisfied outside of the project area.


Project-level additionality


In general, forestry conservation programs are run by NGOs dependent on outside funding. In these cases, it seems reasonable to assume that income from offsets is directly fueling project operations, allowing more activities than without them. However, sometimes forestry offsets are related to enterprises hoping to make a profit by selling lumber. In these cases, it is possible that the enterprise was profitable without offsets, and therefore may not satisfy project-level additionality.


Marginal additionality


Forestry projects generally need continual revenue flow to keep operating and can use additional funding to expand their operations. We, therefore, believe that a well-functioning forestry project is likely to satisfy marginal additionality.


Permanence


Trees capture and store carbon as biomass as the tree grows. This carbon is not eliminated, but converted into tree matter and fixed to the soil, and if the tree dies and decays (or burns) it will be released back into the air. The ability of trees to reduce atmospheric carbon depends on their survival over decades.


If trees that are planted or conserved end up getting destroyed in the future, most benefits of the project are lost (except a delay in GHG emissions). However, most forest projects seem to have significantly shorter timelines, often just a few years or decades. Risks to permanence can be unintentional (such as fires and pests), or intentional (such as logging). To address the risks of such “reversals”, voluntary certifying agencies such as Gold Standard assign a risk score to forestry projects and require a risk-related proportion of credits to be put into a risk buffer pool. However, it is unclear whether future monitoring of reversals will be adequate, and if the buffer pool will be enough to account for them. For instance, this report by the non-profit CarbonPlan calls into question whether the buffer pool in forestry offsets in California’s cap and trade market is sufficient given increased susceptibility to forest fires.

Additionally, a recent article by the investigative journalism organization ProPublica looked into a myriad of forest conservation offset projects, and came to the following conclusion:



“In case after case, I found that carbon credits hadn’t offset the amount of pollution they were supposed to, or they had brought gains that were quickly reversed or that couldn’t be accurately measured, to begin with. Ultimately, the polluters got a guilt-free pass to keep emitting CO₂, but the forest preservation that was supposed to balance the ledger either never came or didn’t last.”

The conservation program studied in Jayachandran et al (2017) only lasted two years, so they address permanence questions in their article. The authors do not make a claim of permanence - instead, they assume that deforestation will likely resume once the program ends, and therefore the benefits of the project come from delaying the deforestation. While they do find that the program is cost-effective even when only considering a delay in deforestation, this conclusion comes from a complicated calculation relying on an assumed discount rate and evolution of the social cost of carbon over time. The parameters chosen in this calculation are controversial, and therefore we don’t have a high degree of confidence that a short-term program would be cost-effective. To permanently offset carbon emissions the program would have to be run in perpetuity, making the cost of the offset prohibitively high.


Overall, permanence is a persistent issue in forestry conservation projects, as it is very difficult to permanently guarantee an emissions reduction with a temporary project.


Co-benefits


Co-benefits to forestry projects may include ecosystem conservation, biodiversity, and recreation. However, conserving forests may also hinder income-generating opportunities from local inhabitants.


Assessment of forestry projects


Overall, our assessment of forestry projects puts us in a difficult situation. Conserving forests is a clear necessity in the fight against climate change, and there is no reason to believe that this conservation will happen based on market forces. Therefore, there is a need for additional funding for conservation, and the offset market could be a good way to achieve this funding. For a high-quality project, it’s likely that funding conservation is one of the most cost-effective ways to lower GHG emissions.


However, assessing the causal impact of any offset on GHG reduction is extremely difficult, and we do not believe that the certification procedures put in place by the offset certifiers give a high enough level of certainty to trust any specific project. We are not the only ones to come to this conclusion on forestry offsets. For instance, a guide to assessing the validity of carbon offsets by Broekhoff et al (2019) categorizes forestry offsets as being “higher risk” of being low quality due to concerns about additionality and permanence.


At this point, we have not been able to find any forestry offsets that have sufficient evidence for us to recommend with confidence. However, we intend to keep exploring this sector and hope to be able to find high-quality projects to recommend in the future.


This work is preliminary, and subject to change. Questions and comments are welcome at givinggreen@idinsight.org.



References


Broekhoff, Derik Gillenwater, Michael Colbert-Sangree, Tani Cage, Patrick “Securing Climate Benefit: A Guide to Using Carbon Offsets”, November 2019, http://www.offsetguide.org/wp-content/uploads/2019/11/11.15.19.pdf


Jayachandran, S., De Laat, J., Lambin, E. F., Stanton, C. Y., Audy, R., & Thomas, N. E. (2017). Cash for carbon: A randomized trial of payments for ecosystem services to reduce deforestation. Science, 357(6348), 267-273. https://science.sciencemag.org/content/357/6348/267


Popkin, Gabriel (2019) How Much Can Forests Fight Climate Change? Nature 565, 280-282 (2019) https://www.nature.com/articles/d41586-019-00122-z


Song, L., & Moura, P. (2019). An (even more) inconvenient truth: why carbon credits for forest preservation may be worse than nothing. ProPublica. https://features.propublica.org/brazil-carbon-offsets/inconvenient-truth-carbon-credits-dont-work-deforestation-redd-acre-cambodia/