The Climate Trust

California’s Air Resources Board Approves First Forest Carbon Offset Project Under its Cap-and-Trade Protocol


Source: The Climate Trust

April marked a milestone for forest carbon projects when California Air Resources Board (ARB) issued the first forest carbon offsets to a project developed under the California Compliance Offset Protocol-U.S. Forest Projects.

The Yurok Tribe Sustainable Forest Project improves forest management on approximately 8,000 acres of tribal forestland in Humboldt County. By registering the project and selling carbon offsets in California’s cap-and-trade system, the Yurok Tribe has made a long-term legal commitment to not only maintain forest carbon stocks, but to increase carbon sequestration through improved forest management; enabling sustainable timber production, and preservation of cultural values and ecological function. Improved management is also key to preserving important habitat for Coho and Chinook salmon, with additional benefits to other imperiled species.

The sustainable forest project is notable as a pioneer in this sector; demonstrating the complex and varied demands we place on forests. The project exemplifies the important role carbon finance can play to diversify revenue and to tip the balance toward sustainable management with both local and global benefits. We need healthy forests. The U.S. Environmental Protection Agency reports that the U.S. forest products industry produces $200 billion in sales each year and employs about one million workers. At the same time, healthy, ecologically sound forests are among our most important carbon reservoirs; removing CO2 from the atmosphere and storing it for the long term, ultimately helping to lower emissions globally.

While the verification of this project is a critical step in the maturation and growth of the young California carbon market, voluntary carbon market standards continue to play a vital role for forests. Although the Yurok project is the first project to produce offsets under the compliance protocol, other forestry projects, called Early Action projects, have already been issued California Compliance Offsets (CCOs) by converting offsets that were first generated and qualified under voluntary standards.

All together, the Yurok project and Early Action projects (with offsets issued by ARB) currently only cover about 67,000 acres of forest. While other Early Action and compliance projects are working their way through the ARB carbon market process, well over 750 million acres of forest in the U.S. alone face multiple demands that can lead to forest degradation and loss. Diverse options that can support improved management and conservation are needed. There is also a need for innovative and quality standards that open the market’s potential to serve new groups-like state and municipal forest watershed resource managers-or that streamline participation by small forest owners. Protocols of this kind are being developed and vetted under the American Carbon Registry, Climate Action Reserve, and Verified Carbon Standards. Globally, carbon finance from varied standards impacted nearly 28 million acres of forests in 2012.

Carbon markets, like forest management, require balancing many demands from buyers; from environmentalists’ need for assurance of scientific rigor and environmental integrity of offsets, to the practical demands of ensuring that project transaction costs and management requirements are not so rigid that they prevent adoption of improved management and conservation supported by carbon finance. It's not an easy balance, but by bringing together diverse voices and the insights of land managers, academics, offset buyers, industry and policy makers, and learning from successful projects and challenges in voluntary and compliance carbon markets, more good, innovative forest projects can take root, branch out, and grow.

The Climate Trust is committed to partnering with both quality voluntary and compliance carbon offset projects to advance these scalable solutions for the betterment of our forests and planet.

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