Last month, an international team of experts published a study in Nature. They found carbon markets are overestimating how safely U.S. forests can store carbon as climate change increases the risk of fire, drought, and insect damage.
One of those experts was William Anderegg, a professor in the School of Biological Sciences at the University of Utah who studies how climate change, drought, wildfire, and other disturbances affect forests.
“Forests in the U.S., and especially in the West, are facing increasing risks from climate change, and this has huge implications for how you design carbon market protocols to adequately account for those risks," Anderegg said.
“It's a fairly complicated business to put together all the pieces of the story that were combined in this really powerful piece of work," said Christopher Williams, who also contributed to the study. Williams is a professor of earth system science at Clark University's School of Climate, Environment, and Society who studies forests, climate, and land use.
The study's finding is concerning because carbon markets rely on the promise that forests will keep storing carbon for decades, but climate change is making that promise harder to keep. However, to understand the problem, it helps to understand how these markets are supposed to work.
“So, people create carbon credits, and other groups, often companies, really folks who are creating emissions, then buy those credits and use them," Anderegg said.
Carbon credits are supposed to represent carbon kept out of the atmosphere, often by storing it in forests, soils, or other natural systems. Polluters can buy those credits to compensate for emissions they still release. A carbon market is the system where those certificates are bought and sold.
Most of these markets already have some kind of carbon insurance, known as a buffer pool. That’s where extra credits are set aside in case some projects lose carbon later.
“A buffer pool is a fairly simple self-insurance type mechanism or risk transfer mechanism, where you're holding a few extra carbon credits in reserve in case you happen to have a reversal," Anderegg said. "If a reversal happens, that buffer pool is then used, and those credits are canceled.”
A carbon reversal is when the carbon behind those carbon credits is lost, for example, when trees die from pests or wildfires spread through an area. That’s a major part of what Anderegg and Williams studied.
They found that the current buffer pool for the largest forest climate mitigation program in the contiguous U.S. is only about 16% as large as it needs to be. In other words, the backup supply of extra carbon credits may fall about 84% short of what is needed to cover likely forest carbon losses from fire, drought, insects, and other climate-driven risks.
“In part, that's because the numbers are too small of the percentages of credits they put aside, and in part that's because there are many projects in very, very high-risk areas, like in California, Oregon, and lots of the western U.S.," Anderegg said.
This means that the issue is twofold. One, carbon markets are not setting enough credits aside into their buffer pools. And two, some of the projects they’re backing are in places where forests are already much more likely to burn, dry out, or die.
“We knew that climate change would place U.S. forests at greater risk from wildfire and droughts and insect attacks, but one of the things that this study does that's really new is to connect that increased risk due to climate change to how big of a buffer pool is needed to backstop forest carbon projects," Williams said.
This matters because carbon credits are supposed to make up for emissions that happen somewhere else. But if the forest behind that credit burns, dries out, or dies, then the atmosphere is stuck with both the original pollution and the increased carbon released from the failed promise to offset it.
Granted, Anderegg and Williams both recognize that current carbon markets have problems. They both stress that protecting forests is not a substitute for cutting emissions in the first place.
“This is probably not a panacea. It's not going to solve everything. It's really complementary with reducing our greenhouse gas emissions from fossil fuel and trying to reduce the speed of climate change itself," Anderegg said. "We need both more management to reduce the risk. And reducing the speed of climate change together.”
Regardless, their study makes one thing clear. If forest carbon credits are to be adequately used as climate solutions, their carbon markets need to account for the climate risks those forests actually face.
