The realist’s road to zero: #4 Nature-based offsets

In a hot, wet world, 300 million years ago, swampy forest spread across much of the globe and pulled vast amounts of carbon from the atmosphere. As the trees lived and died, dead vegetation was compressed and became coal and oil. Eventually so much CO₂ was removed from the air that its greenhouse effect was reduced, the world cooled, and the forests died back in what is now known as the Carboniferous rainforest collapse. Modified remnants like the Amazon survive today in tropical regions.

This is the long-range historical context for the current market in forestry-based carbon offsets that seek either to preserve the carbon still stored in the world’s 3 trillion trees or, by planting trees at scale, put back into forests some of the carbon we have released by burning their fossilized ancestors. 

Today, such offsets seem to be everywhere. Airlines, oil majors, banks, toilet roll manufacturers, NGOs and many more are all buying offsets to mitigate their carbon footprint. Organizations can purchase an offset based on forest protection, reforestation (restoring damaged or depleted forest) or afforestation (planting trees where none were before). Tree-based offsets co-exist with other carbon offsets such as renewable energy projects — including those which involve burning woody biomass as biofuel — and are traded either as voluntary carbon credits or as part of legal requirements in compliance markets such as the European Union’s Emission Trading Scheme.

But it took many millions of years for the great forests of the past to sequester carbon in the form of coal and oil. Does that tell us something about how far we can mitigate our current problems by planting new trees? The message from climate scientists is that we do not have much time. So to what extent, realistically, can trees help us mitigate climate change? And if an organization buys a forestry-based carbon offset, what is it really achieving?  

Deep-rooted concerns

Experts agree that offsets are only ever a last resort, after we have done everything we can to avoid emitting CO₂ in the first place. “Carbon offsets can be a cost-effective and necessary step on the path to climate-change mitigation, but they shouldn’t be used in place of minimizing an organization’s emissions,” says Darius Tolkien-Spurr, decarbonization advisor with WSP in British Columbia. “When it comes down to establishing what you are achieving, and getting carbon credits verified, it can get much more complicated.”

Planting trees is a simple concept, easy to relate to and easy to market. But while planting a tree may be a good thing, it does not necessarily amount to an offset, says Tolkien-Spurr. One clue is in the price: it costs as little as 50 cents to plant a tree. Forestry-based offsets, however, can be anything from US$5 to US$20 per tonne and sometimes much more. That is, in part, because to be a legitimate source of carbon credits, projects must be quantified, verified, validated and monitored. This can be an expensive and cumbersome process, he says, but it is a necessary one. 

A key concern is the question of “additionality”: to count as an offset, the developer has to prove that its trees would not have been planted anyway. But proving that something was not going to happen immediately involves an almost quantum level of ambiguity, and the picture can get murkier still when it comes to offsets derived from protecting existing forest. Schemes like this fell into some disrepute following a Bloomberg exposé of offsets claimed for forests that were never in danger. One landowner candidly admitted they never had any intention of felling the forest concerned. The intention had been conveniently assumed by others.

Of course, there is the risk that such protection schemes act as a perverse incentive for the owners of forested regions to invent a plan to fell them, in order to access offset money. On the one hand, this may indeed safeguard the future of some trees. On the other, it creates a scenario in which forests are almost held to ransom. And the fact that, by simply changing their mind, a landowner in the tropics can determine whether or not a tree counts as an offset for a company in California, is a problem with which Schrödinger’s cat might sympathize.

“Carbon leakage” is another issue, says Tolkien-Spurr. “This is a common concern with avoided deforestation projects. If you protect one area, does it intensify harvesting somewhere else and shift the location of emissions? It can be difficult to accurately audit the situation to ensure the offset results in a genuine net decrease in emissions.”

And then there is the question of permanence — or lack of it. How long will the trees be there? This is not just about guaranteeing that they won’t be felled, for example due to a change in local politics. There are also natural risks.  “Fires release carbon and disease can too,” says Tolkien-Spurr. “Wildfires and insect outbreaks can cause forests to shift from a carbon sink to a net carbon source, and climate change is further increasing the risk that the benefits accrued by forest carbon offsets will be reversed.” For example, a sustained attack on Canada’s forests by the mountain pine beetle in recent years has resulted in such a huge volume of dead and decaying wood that they have emitted more greenhouse gas than they have absorbed.

Money trees

Trees remain a cheap and effective way to absorb CO₂ from the atmosphere, and these issues should not discredit the fundamental idea of forestry-based offsets. Tolkien-Spurr advises seeking out higher-quality offsets with genuinely additional projects involving well-managed forests, ideally with multiple benefits. “It’s important not to look at carbon sequestration in isolation from other ecosystem services. Nature-based solutions to climate change have the advantage, if implemented properly, that they also enhance the many co-benefits of forests — biodiversity in particular.”

As corporate and governmental net-zero commitments have proliferated, the market for “nature-based” carbon credits has grown by 450% since 2016, the bulk of these relating to forestry. And as quality issues have come to light, some buyers are seeking out carbon-removal schemes that are more solidly verifiable — those that involve planting new trees, rather than preventing the destruction of existing ones.

“Demand for high-quality, removal-based carbon offsets has grown dramatically,” says Dan Sobrinski, vice president in WSP’s sustainability, energy and climate change practice in Pennsylvania. “It stems from a realization that, even if we align carbon emissions with a 1.5°C pathway, we will still need a significant increase in carbon removal beyond our current capability.” The global 100 companies that his team advises are struggling to find removal offsets of sufficient quality — with the result that prices are rising.

This is not necessarily a bad thing. If offsets cost more, this should incentivize emission reductions. It also potentially means more money from the industrialized world flowing to the developing areas of the globe where a majority of offset projects are located. As Sobrinski points out, an objective of regulatory and voluntary offset schemes is to direct private investment into activities that are expensive to undertake but produce positive climate change benefits. On the other hand, if prices reflect a new scarcity in quality removal-based offsets, this might signal that the easy wins are beginning to come to an end.

Trees are not only a source of offsets, but of timber — another go-to solution for decarbonizing industries, reflected in the rising cost of lumber, with prices now at least double their longer-term average. Architects and engineers are being encouraged to specify timber as a low-carbon replacement for building materials such as steel that have high embodied carbon. At the same time, wood products are increasingly used as biomass to replace fossil fuels for heating, power generation and industrial processes including steelmaking. Both are valid strategies in the drive to reduce greenhouse gas emissions. But they do add to the mounting list of calls on timber as the saviour of a planet which, as recent academic research has highlighted, does not enjoy an infinite capacity to grow trees.

Dr Bonnie Waring, lecturer in climate change at Imperial College London, recently conducted a review of the available scientific literature to assess just how much carbon forests could feasibly absorb. She concluded: “If we absolutely maximized the amount of vegetation that all land on Earth could hold, we’d sequester enough carbon to offset about ten years of greenhouse gas emissions at current rates. After that, there could be no further increase in carbon capture.”

Rethinking the forest

It’s a sobering thought. Even if we planted trees on every spare hectare of the globe, the maximum time it could buy us, as we attempt to limit global warming, would be just one decade. Also, according to Waring, this could only happen over the course of a century.

So we will have to find other ways of removing carbon from the atmosphere. “Technological carbon removal will be needed in addition to natural removal,” says Sobrinski. “Engineered technologies like direct air capture are emerging but significant progress is needed to improve the cost-effectiveness of the process in order to make a meaningful impact on climate change.”

Other approaches to forestry may also help: it is an underappreciated fact that forests and other vegetation naturally produce significant quantities of greenhouse gases as they decay. “There’s definitely an opportunity to reduce carbon in the atmosphere through sustainable forest management,” says Tolkien-Spurr. “In commercial forestry, for example, better use could be made of the ‘slash’ — the typically underutilized parts of the tree, twigs, bark and so on. More effort could be made to turn this into longer-lasting wood products, or it could be used as biofuel to produce power for timber mills and local populations. It’s better than burning it in a slash pile, as often happens now.”

This is one of the limitations of a narrow focus on tree-planting schemes: when it comes to nature-based solutions to climate change, there can be greater benefits from looking at the whole ecosystem. Before we jump on the bandwagon of trying to plant more trees everywhere, we need to focus on the better management of forests generally. Of course, decaying matter is part of the nutrient cycle of forests and not all of it can or should be harvested — most forests are generally best left undisturbed. But more holistic practices could have considerable potential. This is a strategy of avoidance rather than removal, and no doubt auditing forest decay management for the offset market would present its own challenges.

Regardless of the difficulties, however, we are not in a position to ignore any process that plays such a significant role in our atmosphere’s carbon cycle. And, given the urgency of the climate crisis, if we can reduce emissions now rather than waiting for trees to grow and start sequestering carbon, that can only be a good thing.

This article is the fourth in a series focusing on the toughest targets for decarbonizing the built environment — steel and concrete — and the tough choices facing global policymakers on the most sustainable way to deploy finite resources. So far, we’ve looked at the potential of renewable energy, hydrogen and nature-based offsets – essential components of a net-zero future, but still not enough on their own. In the last part of the series, we’ll consider the missing piece of the puzzle, to which all decarbonization roads lead: carbon capture and storage. But there are currently fewer than 30 CCUS plants operational worldwide. How do we get from here to net-zero?