Forest Carbon Offsets: A scorecard for evaluating project quality

John Gunn, Ph.D. Senior Program Leader Manomet Center for Conservation Sciences Brunswick, Maine 26 February 2008 06/08/09 Forest Carbon Offsets: A Scorecard for Evaluating Project Quality

Click here to offset your carbon footprint …
Forest carbon is clearly an important part of mitigating GHG emissions
What qualifies as a legitimate carbon offset?
The carbon market could be abused
Rigor and transparency are critical to ensure that the buyer, and atmosphere, are getting the offsets expected.
06/08/09

Outline
Overview of forest carbon offsets and affiliated jargon
The Manomet Forest Carbon Offsets Scorecard as a tool for evaluating offset projects
06/08/09

WHAT ROLE WILL MANAGED FORESTS PLAY IN FOREST CARBON OFFSET MARKETS AND GHG MITIGATION? 06/08/09

Volatility in CO2e markets now – drop in price related to concerns over “additionality and permanence” Carbon Equivalent ($/MTCO2e) Trading on the Chicago Climate Exchange (CCX) from May 2008 – February 2009 06/08/09

When gas is expensive, energy producers rely more on coal, which emits higher levels of CO 2 and boosts demand for carbon permits.

Global Voluntary and Regulatory Carbon Offset Market Value OTC forest offset market with huge variation in price: $1.80/tCO2e to one transaction at $300/tCO2e.

How forests play a role in markets
Afforestation
Reforestation/restoration
Avoided deforestation or conversion
Forest management
Enduring wood products/product substitution
06/08/09

Forests and Carbon – Market Entry Requirements Emerging:
Demonstrate that entity-wide forest holdings are sustainably managed.
Demonstrate long-term commitment to maintain carbon stocks.
Use of approved methods to quantify carbon stocks.
Independent third-party verification of carbon stocks.
06/08/09

Some key concepts that will define available carbon markets for managed forests (voluntary vs. regulatory)
Baselines
Additionality
Leakage
Permanence
06/08/09

Baselines
The bar you are measured against
Base Year
Practices (project level)
“Business-as-Usual”, or BAU
Regulatory
Stocking (e.g., FIA mean)
06/08/09

Baseline Examples BAU: Practices or Regulatory

Additionality (real & measurable)
Is CO 2 really being sequestered “additionally”?
More than what would have happened in absence of project or payment
Offsets for actual carbon emissions
06/08/09

Additionality

Leakage
Internal
Owner shifts activities within ownership
External
Carbon practices displace activities to other forests (local, global)
Difficult to measure
06/08/09

Permanence (enforceable)
Intentional Conversion or Natural Disturbance
Insurance/Reserves
Legal enforcement
How long?
06/08/09

Basic Elements of the Major Forest Carbon Offset Standards 06/08/09 Standard Baseline Additionality Permanence CCX Base Year =Growth – Harvest 15 years VCS 5-10 Years Prior Practices Permanent CCAR Regulatory Practices Perm. Easement RGGI Proposed FIA mean > FIA mean 99 years

What Is the Scorecard?
An easy-to-use tool for evaluating quality of forest projects.
43 questions addressing:
Contract structure
Baselines
Additionality
Monitoring, measurement, reporting, and verification
Permanence
Leakage
Transparency
Co-benefits/costs

How Can It Help You?
Guides users in understanding and addressing key quality components of offsets.
Provides a standardized reference point in an unstandardized marketplace.

Who Should Use It?
Project developers, offset buyers and sellers, anyone interested in understanding what creates high-quality forest offsets.

How Was It Developed?
Extensive reviewed of GHG registries, GHG accounting protocols, program requirements, project design and certification standards, and reports analyzing carbon markets and offset providers.
We distilled and synthesized carbon offset “best practices.”

3. Additionality Yes No 3.1 Will the project exceed regulatory requirements or other legal mandates? ___ ___ 3.2 Can it be demonstrated that carbon credits will not be generated retroactively from activities that have already occurred? ___ ___ 3.3 Can it be demonstrated that the project will result in a net reduction of GHG levels in the atmosphere relative to the baseline? ___ ___ 3.4 Can it be demonstrated that none of the project’s credits have been sold more than once? ___ ___ 3.5 Can it be demonstrated that the project’s credits will be permanently retired once they are sold? ___ ___ Subtotal (out of 5)=

5. Permanence Yes No 5.1 Is maintenance of additional carbon stocks contractually required for: At least 20 years? At least 50 years? At least 100 years? In perpetuity? ___ ___ ___ ___ ___ ___ ___ ___ 5.2 Have all the project’s carbon risks been identified and risk management strategies been enacted to guard against carbon loss during the project’s contractual obligation? ___ ___ 5.3 Must carbon stocks be restored or replaced if lost before the end of the project’s contractual obligation? ___ ___ Subtotal (out of 6)=

Uncertainty around these key concepts will define available carbon markets (voluntary vs. regulatory)
In particular :
Baselines
Additionality
Leakage
Permanence
06/08/09

For more information: www.manomet.org
Funded by:
Merck Family Fund
Roy A. Hunt Foundation
Davis Conservation Foundation
Henry P. Kendall Foundation
Authors: Julie Beane, John Hagan, Andy Whitman, & John Gunn

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