Status of the forest carbon offset markets in the United States

Here is the abstract:

Nature-based climate solutions are gaining international policy attention–with forests highlighted as a primary pathway for storing carbon. However, evaluations of additional carbon benefits and the permanence of forest carbon offset projects remain scarce. In response, we compiled a novel database to analyze trends in existing forest management projects from the two offset project registries (Climate Action Reserve and American Carbon Registry) who list, report, and verify forest carbon offsets in California’s Compliance Offsets Program, part of the state’s Cap-and-Trade Program. We found that improved forest management projects represent 96% of all credits from forestry projects and 80% of all offset credits to date and span a diverse set of forest management practices with different potential for carbon storage. Our results show that 26% of existing forest carbon offsets in the United States face the hazard of wildfire. From a policy perspective, these findings underscore the need for a robust framework to monitor and evaluate cumulative and future carbon benefits of forest-based offset projects, and for assessing the risk of reversal associated with each project.

Table 1 has some more detail about what "forest management" means, but I'm still a bit vague on what's going on. Some examples might be nice?

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Companies owned 75% of forest carbon offset project area and received 69% of all offset credits issued (Fig 2, S2 Table); four projects owned by Alaska Native Regional Corporations received 17% of all private company offsets and comprised 12% of all private company acres. These four projects were not managed for large-scale, commercial forest harvest. Native American tribes owned comparatively few projects but owned the next largest amount of project land (15% of acres) and received 21% of offset credits. Non-governmental organizations owned 9% of offsets and 10% of project acres. Government organizations or municipalities owned few projects and acres but received over one million credits (0.6% of acres and offsets). Less than 0.3% and 0.7% of projects acres and offsets respectively were owned by individuals or universities combined. We found that most of the forest offset projects are owned by private companies (Fig 2, S2 Table). These projects had no management or no commercial harvest listed in almost half the projects, with one-third of the projects applying uneven-aged management.

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While our analysis did not find any existing projects with very high or high wildfire hazard potential we did, however, find a project in California with a high wildfire hazard potential, which had been issued 847,985 offset credits, but had been terminated in 2019 due to a wildfire.

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In operational forestry, improved forest management is not well-defined, and the long-term carbon benefits of most of these practices remain to be tested [10, 11]. At the same time, markets are certifying forest offsets projects but offer limited accountability and transparency on additionality [13, 36, 37]. Further, large quantities of offset credits are awarded to projects at the start of the project (i.e., initial tracking period), particularly for improved forest management projects thus potentially disincentivizing future forest management activities [37, 38]. Currently, there are no policy instruments or regulations in the California offset credit market that focus on oversight and accountability of forest offset projects, and the governance for environmental integrity is focused on the development (i.e., the protocols) and start of the forest project [39]. The current mechanism of issuing, verifying, and accounting for forest carbon offsets has put into question the added carbon benefits of these projects [37].

Yes, paying in advance seems very bad for projects where the future is uncertain. It would make more sense to set up funds that pay out every year as the project is underway.