A turn needed in the carbon industry: Offsets should embrace uncertainty

The forest carbon offset market is built on the idea that you can predict exactly how much carbon a project will lock away from the atmosphere. But exact predictions are a scientific impossibility, argues a new policy research paper in Science. Instead, the market should look to other sectors that successfully manage “unknown unknowns”.

Carbon offset projects are constantly criticized. Oftentimes the criticism rightly focuses on the question of whether offset schemes rightfully can claim how much carbon they have stored.

Many suppliers of offsets have responded to this criticism by using more and more sophisticated methods for measuring carbon sequestration. This is the wrong approach, according to a new policy paper published in Science.

In the paper, the authors argue that the carbon offset market should look at the bigger picture of creating resilient forest landscapes instead.

“There is no technological fix for the forest carbon offset market. Carbon offsets are part of an unpredictable world, and chasing ever more sophisticated measurements is just a distraction from the market’s fundamental issues,” says lead author Geoff Wells researcher at Stockholm Resilience Centre at Stockholm University, McGill University, and University of Edinburgh.

He and his co-authors argue that buyers should stop trying to use offsets as a direct substitute for their emissions and instead use them as a broader commitment to addressing climate change by building resilient forest landscapes and the communities that can protect such landscapes and so doing secure the efficacy of the carbon projects.

Measuring the carbon stored in forests over time is highly complex. For a carbon offset project to be viable in a traditional sense, it has to show that (1) the carbon stored is additional to what would have been stored without the project, (2) the efforts do not increase emissions elsewhere, and (3) that the storage will be intact for decades and centuries to come.

These three principles, additionality, leakage, and permanence, form the backbone of the carbon offset market as it is today. When it comes to assessing them, a lot of weight is put on estimates of biomass and tree cover changes in combination with detailed risk analyses.

However, these analyses often fall short because they only take into consideration risks that are already known.

“Many forest landscapes are subject to deep uncertainty. It’s a world of unknown unknowns. Not only do you not know the state of key parameters – you don’t even know what the key parameters for successful carbon offsets are,” says co-author Unai Pascual, Ikerbasque research professor at BC3, and co-Chair of the Values Assessment of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). “Moving away from the idea that commodifying carbon is a panacea to address climate change is urgently needed, especially so in order to address the social injustices that the carbon industry forges around the world, especially in the Global South.”

This does not mean that the carbon offset market should be abandoned altogether. Other sectors have found ways to operate under similar types of uncertainty without getting bogged down in the same problems.

In the paper, the scientists draw analogies to internet service providers, who agree to do their best to provide a reliable speed and stability of service, even if the actual level may fluctuate.

Such a “best efforts”-approach could also be applied to the carbon offset market, according to the researchers.

“Some degree of measurement and assessment is obviously important. But spending money chasing ever more complicated or precise measurements of forest carbon change is a red herring” says co-author Casey Ryan, professor at the School of Geosciences at the University of Edinburgh. “Complicated measurements can mean little to the communities involved in managing the forests and can impose unfair costs on those involved, without adding any meaningful benefit” added Professor Ryan.

The best way a carbon buyer can manage risk is not necessarily to find the project or rating agency with the most technologically sophisticated monitoring and modelling, but to look at the broader picture of whether a project is building strong, forest-friendly local economies that can withstand changes in climate, politics, social demographics and global markets.

“This broader trajectory is what matters in the end, even if there is uncertainty in the short term about the precise additional carbon sequestered,” says Geoff Wells.

Paper details:

Title: Confronting deep uncertainty in the forest carbon industry

Link: https://www.science.org/doi/10.1126/science.adh8117

Doi: 10.1126/science.adh8117

Authors: Geoff Wells et al. 2023

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