Author Name: ProPublica
This story was originally published by ProPublica. [1]
The Climate Solution Actually Adding Millions of Tons of CO2 Into the Atmosphere
Date: 06, 2021
The regional average for mixed conifer forests in the inland region is much lower than the average for similar forests in the coastal region.
The inland region was created by combining three different ecological regions, as defined by the U.S. Forest Service, some of which have far higher carbon levels than others.
Most of Northern California’s offset projects are clustered along the western edge of the inland region, where projects are most likely to benefit from inflated credits.
Sources: California Air Resources Board, Forest Inventory and Analysis Program Credit: Lucas Waldron, ProPublica
A large share of those credits came from a single project outside California that profited from a glaring mistake in the rules. New Forests’ affiliate, Forest Carbon Partners, helped the Mescalero Apache Tribe develop a forest offset project in New Mexico. The project earned 3.7 million credits worth more than $50 million, largely because it was located in an area where the Air Resources Board had set an erroneously low regional average.
Another form of cherry-picking involves tree species: Developers can seek out tracts with particular trees that store far more carbon than the surrounding region.
According to the study, one project in Alaska consists almost entirely of giant Sitka spruces, yet the local regional average was calculated from a wide mix of trees, including species like cottonwoods that store far less carbon. The project earned significantly more credits than it should have due to the flaws in the system, the study said. The project owner didn’t return requests for comment.
Preserving especially carbon-rich forests is good for the climate, in and of itself. But when the trees in the project area bear little resemblance to the types of trees that went into calculating the regional average, it exaggerates the number of credits at stake, CarbonPlan’s study found.
Mark Trexler, a former offsets developer who worked in earlier U.S. and European carbon markets, said the board should have anticipated the perverse incentives created by its program.
“When people write offset rules, they always ignore the fact that there are 1,000 smart people next door that will try to game them,” he said. Since the board set up a system that “incentivizes people to find the areas that are high-density, or high-carbon, that’s what they’re going to do.”
To estimate the extent of overcrediting in California’s program, CarbonPlan calculated its own version of regional averages for each project. The researchers drew on the same raw data used by the Air Resources Board, but only used data from tree species that more closely resemble the particular mix of trees in each project area.
In total, 74 such projects had been established as of September 2020, when CarbonPlan began its research. CarbonPlan was able to study 65 projects that had enough documentation to make analysis possible. All received credits for holding more carbon than the regional average.
The researchers found that the vast majority of projects were over-credited, but about a dozen would have received more credits under CarbonPlan’s formula. Those included two New Forests projects, which would have earned as much as an additional 165,000 credits.
The news organizations sent officials at the Air Resources Board a copy of the study and its detailed methodology weeks before publication. Clegern declined multiple requests to interview board staff and responded only in writing.
He did not address CarbonPlan’s calculations. “We were not given sufficient time to fully analyze an unpublished study and are not commenting further on the authors’ alternative methodology,” he wrote.
The outside scientists who reviewed the research on behalf of ProPublica and MIT Technology Review praised the study.
“It’s a really analytically robust paper and it answers a really important policy question,” said Daniel Sanchez, who runs the Carbon Removal Laboratory at UC-Berkeley. While close observers are well aware of numerous problems with California’s forest offset rules, “they’re revealing a deeper set of serious methodological flaws,” he said.
None of the reviewers pointed out any major technical or conceptual flaws with the paper, which has been submitted to a journal for peer review.
Connor Carbon likes trees and he wants to help the climate. Can he make money from forest carbon offsets and fight climate change at the same time? Read on to see!
Forest owners can earn carbon credits from California if they manage their lands in ways that store more carbon, such as reducing logging or thinning out brush to increase overall growth. The goal of the program is to encourage landowners to draw down or preserve more carbon than they otherwise would have.
Every carbon credit created by Connor’s project can be sold to a power plant or other polluter in the state, allowing it to emit one more ton of CO2 than it would otherwise be allowed to. In theory, the exchange should result in no net increase in total carbon emissions.
Connor is a consultant who helps landowners who want to join the program. If Connor locates the right piece of land, Connor could keep 25% of the eventual revenue for managing the project.
He soon finds two pieces of land in Northern California, each about 10,000 acres with roughly the same types of trees.
One 10,000-acre tract is just inside Region A, where the program estimates regional average carbon levels are the equivalent of 90 tons of CO2 (but we’ll just call it “carbon”) per acre.
The other tract is just over the border in Region B, where the regional average is 50 tons per acre. (That’s because, while the tracts themselves are similar, more of the forests in this region are made up of sparser and thinner trees.)
Connor knows he can make more money if the carbon in the tract he chooses is significantly higher than the regional average, so he picks the land in Region B. Frances Forestowner, who owns the land, is happy to join in.
Connor is pretty sure the carbon levels on the land are about 100 tons per acre, based on Forest Service data he’s analyzed. If so, that means every acre holds 50 tons more than the regional average, which could add up to 500,000 credits.
“Uh-oh,” thinks Connor.
Connor, who has already invested his time and money into the project, explains that the rules allow Frances to submit a future logging “scenario” that shows she could chop down her trees to the average carbon levels in Region B. If so, they can earn all those half-million credits — and protect the forest for the next 100 years.
“Great,” thinks Connor.
Connor hires a forester, Terry Treecounter, who confirms the carbon levels on the land are 100 tons per acre. They decide to file that logging scenario and earn those credits, which are worth $5.5 million. That’s nearly $1.4 million just for Connor.
But in quieter moments, when Connor is really honest with himself, he wrestles with several things.
Frances’ land didn’t really hold 50 tons per acre more than similar forests in that area. The program set broad regional averages that don’t match the carbon reality and typical practices for Frances’ land. This inflated her credits and the climate benefits.
And if she never would have ended up logging at those levels, the project earned far more credits for carbon than it actually preserved.
But the power plants and other polluters that buy those credits will get to emit 500,000 more tons of carbon dioxide. Those emissions will be real even if the carbon credits weren’t.
So while Connor is now a millionaire, and he had genuinely hoped to use trees to ease global warming, he now doubts the climate really came out better for the deal.
‘A Significant New Commodity Market’
In early 2015, an offsets nonprofit hosted a webinar highlighting how Native American tribes could participate in California’s program.
One speaker was Brian Shillinglaw, a Stanford-trained lawyer and managing director at New Forests who oversees the company’s U.S. forestry programs. The company manages the sale of carbon credits, sells timber and on behalf of investors manages more than 2 million acres of forests globally, a portfolio it values at more than $4 billion.
New Forests also manages its affiliate, Forest Carbon Partners, on behalf of an institutional investment client it declined to name. Forest Carbon Partners finances offset projects and shepherds landowners through the process of applying for California’s offset program.
“The bottom line is the California carbon market has really created a significant new commodity market,” Shillinglaw said during his presentation. He said the program is something “many Native American tribes are very well situated to benefit from, in part due to past conservative stewardship of their forests, which can lead to significant credit yield in the near term.”
Translation: Because many tribes have logged less aggressively than their neighbors, their carbon-rich forests were primed for big payouts of credits. Under Shillinglaw, New Forests or Forest Carbon Partners have helped to secure tens of millions of dollars’ worth of credits for native tribes.
Among the 13 New Forests projects that CarbonPlan researchers were able to analyze, between 33% and 71% of the credits don’t represent real carbon reductions. That’s nearly 13 million credits at the high end.
“Although we cannot prove that New Forests acted deliberately on the basis of our statistical analysis, in our judgment there is no reasonable explanation for these outcomes other than that New Forests knowingly engaged in cherry-picking behavior to take advantage of ecological shortcomings in the forest offset protocol,” said Badgley, the lead researcher.
New Forests managed the first official project in California’s program, registering 7,660 acres of forest land on or near the Yurok Reservation, which runs more than 40 miles along the Klamath River near the top of that West Coast cluster of projects. The state issued more than 700,000 credits to the project for its first year, worth $9.6 million at recent rates.
State officials have pointed to the tribe’s participation as a triumph of the program. In 2014, the board released a promotional video that showed the meticulous work of measuring trees in the Yurok project. James Erler, the tribe’s then-forestry director, explained how offsets enabled the tribe to reduce logging. Near the end of the video, Shillinglaw appears in a sunlit forest, wearing a collared shirt and a New Forests-branded jacket.
“It’s a beautiful watershed,” Shillinglaw said over footage of a running stream and an elk standing before a thicket of trees. “This is the Yurok Tribe’s ancestral homeland, and in part due to the carbon market will be managed through a conservation approach.”
CarbonPlan estimates the project earned more than half a million ghost credits worth nearly $6.5 million.
Here’s why the researchers say it was over credited:
The boundary dividing California’s coastal and inland regions runs through the middle of the reservation. The carbon-rich forests on either side of that line are similar, filled with large Douglas firs like most of the coastal region. But more than 99% of the forest designated for preservation falls within the inland zone, where average carbon levels are much lower. The fact that the project was located in the most carbon-rich area of that zone enabled the landowners to earn an exaggerated number of credits.
The Yurok Tribe worked with New Forests to develop a 7,660-acre offset project on the eastern side of its land. The fact that the carbon-rich project fell into a region with far lower carbon averages may have produced more than half a million credits of dubious climate value. Sources: California Air Resources Board, CarbonPlan Credit: Lucas Waldron, ProPublica
At least one person involved in the Yurok Tribe’s forest offset efforts was aware of how geographical choices swing the credits that can be earned.
Erler said during a 2015 presentation at a National Indian Timber Symposium that the tribe had the “distinct pleasure” of having the boundary run through its territory.
“You can take the same inventory data and apply it to the California Coast” — the region to the west — “and it doesn’t come out with the same numbers as you do if you cross the street,” Erler said at the conference, captured in a YouTube video posted to the Intertribal Timber Council’s channel. “Vegetation may be the same, but it changes.”
Badgley said that while the researchers can’t speak to the intentions of any actors involved, it’s clear that this project “benefited from over-crediting and that the Yurok Tribe’s forester was aware how the specific aspects of the protocol rules our study criticizes led to beneficial outcomes.”
Erler didn’t respond to a list of emailed questions.
In an emailed statement, Yurok spokesperson Matt Mais said that the property was the only land the tribe had available to enroll at the time and strongly denied the tribe engaged in any sort of gaming of the system. He didn’t respond before press time to a subsequent inquiry asking why the rest of the tribe’s land wasn’t available for the offset program.
Over the last decade or so, the tribe has slowly reacquired tens of thousands of acres of its ancestral territory, in and around the watershed of Blue Creek and other streams that sustain migrating salmon, from the Green Diamond Resource Company, a major Seattle-based timber business. The complex multistep land deals were done in partnership with the nonprofit Western Rivers Conservancy and financed through government grants, philanthropic donations and the sale of the tribe’s offset credits.
“As we have recovered additional forestlands, we have enrolled additional acreage in California’s climate programs in support of our Tribe’s strategic goals including protecting salmon habitat, sustaining the revitalization of our cultural lifeways, and facilitating economic self-sufficiency,” Mais wrote.
“It’s insulting to claim that the Yurok Tribe has ‘gamed’ or ‘exploited’ California’s climate regulations,” he added. “Equally important, it’s concerning that elite institutions now criticize us for legally and ethically using a program that was created to protect mature forests and then using those funds to purchase and restore more forest land that was, at one point, ours.”
New Forests defended its practices in emailed responses to questions, arguing its projects have preserved existing carbon stocks and removed CO2 from the atmosphere through subsequent tree growth “as confirmed via third-party verification.”
In a statement, the company said it has worked on projects in numerous areas, not just along the program’s regional boundaries. The company said its projects “have protected and will enhance carbon storage on hundreds of thousands of acres of forests,” adding that one project with the Chugach Alaska Corporation enabled the permanent retirement of a significant portion of the coal reserves in the Bering River Coal Field in southeastern Alaska.
New Forests follows the board’s “scientifically-accepted regulations to both the spirit and letter of the program,” the company said in a subsequent statement. “New Forests is proud of the forest carbon projects we have developed under California’s climate programs — they have generated positive environmental impact and furthered the economic and cultural objectives of the family forest landowners and Native American tribes with whom we have worked.”
New Forests didn’t respond to numerous additional inquiries, including direct questions about whether it was gaming the rules of the program.
In an emailed response, CarbonPlan stressed that its paper criticizes the design of the program — not the Yurok Tribe or other landowners. Nor does it allege anyone has broken the rules. Its analysis doesn’t consider or depend on the intent of any forest owners, who can benefit from flaws in the rules whether they intended to or even know about them.
“We recognize the injustices experienced by the Yurok Tribe, including the seizure of their historical lands by the United States government and its citizens,” the nonprofit stated. “We also recognize the Yurok Tribe’s legitimate interest in securing resources to repurchase lands that previously belonged to the Tribe and its people.”
Credit: Jon Han, special to ProPublica/MIT Technology Review
An Open Secret
Chris Field, an environmental studies professor at Stanford University, was co-author of a 2017 study that found California’s program was helping to prevent emissions on balance by reducing logging. About 64% of the 39 projects studied were “being actively logged at or prior to project inception.”
Field said the state program is “relatively well-designed to address key issues,” but said it can and should be improved.
He added that there are firm limits on the role that offsets can play in California. From now through 2025, state polluters can only buy offsets to cover as much as 4% of their carbon emissions; from 2026 to 2030, that ceiling rises to 6%.
But those numbers understate the critical role of offsets in California’s cap-and-trade program, viewed by some as a model for market-based climate policy.
Under that program, California sells permits that allow certain industries to emit greenhouse gases, with each permit worth one metric ton of CO2. The state also regularly gives away a certain number of permits to various regulated companies. The total number of permits, called a “cap,” declines over time.
Polluters can also purchase permits from other companies with extras to spare, which constitutes the “trade.” Or they can buy carbon offset credits, which cost slightly less than permits.
To participate in the offset program, landowners must hire technicians to survey the trees on their land, then take data such as tree type, height and diameter and plug it into equations to estimate the carbon stored per acre.
Most of the credits are distributed during the initial stages of a project, which can help to repay setup costs. Projects can also earn additional credits over time as the trees grow and absorb CO2, but those credits accrue slowly, and are dwarfed by the initial credits given to forests with more carbon than the regional average.
The type of forest projects that CarbonPlan analyzed account for 68% of all credits issued by the Air Resources Board since the program’s launch, far eclipsing other types of offsets like capturing methane from dairy farms or coal mines, CarbonPlan found.
Cap and trade is designed to slash the state’s carbon footprint by 236 million tons of CO2 over the next decade, about a third of the cumulative reductions needed to meet the state’s emissions targets over that time.
Barbara Haya, who leads the Berkeley Carbon Trading Project at UC-Berkeley and is a co-author of the CarbonPlan study, calculated that up to half of those cap-and-trade emissions cuts could come via offsets.
Haya said these cherry-picking practices have been an open secret. The study is “revealing to everyone what a lot of people in the industry understand,” she said.
Conservation vs. the Climate
Supporters of forest offsets say no system is perfect, and that focusing solely on the carbon math overlooks the incentives offsets create for protecting forests.
Field said offset systems should balance two goals: ensuring real emissions cuts, and creating ways to fund forest conservation. If CarbonPlan’s study shows projects are gravitating toward high-carbon forests, then those are exactly the types of trees you’d want to save “if you have a conservation agenda,” he said.
Cody Desautel, president of the Intertribal Timber Council, a Portland-based nonprofit consortium of native tribes, said that offset programs have provided critical financial flexibility for tribes. They’ve allowed them to buy back historic land, build needed infrastructure, create jobs for members or simply save up money for financial security. But above all, they’ve created incentives to manage forests in sustainable ways, he said.
“Tribes are very conservation-minded,” said Desautel, who is also the natural resources director for Washington’s Confederated Tribes of the Colville Reservation, which operate an offset project under California’s system. “Their practices are largely based on what’s best for the ecosystem, not what makes the most sense economically. And there’s never been any value to that management approach in the past. These carbon projects provide an opportunity to value that.”
He added, “If there’s no value to owning forest land, it probably won’t be forest land long into the future.”
The Yurok Tribe’s offset projects have clearly helped in these sorts of ways, even if they didn’t provide the full promised carbon benefit.
The tribe has said it is using the acquired land and funds to restore its old-growth forests, produce traditional foods and basket-weaving materials, create a salmon sanctuary and improve habitat for endangered or culturally important species like the coho salmon, northern spotted owl, blacktailed deer and Roosevelt elk.
“Our partnership with New Forests will provide the Tribe with the means to boost biodiversity, accelerate watershed restoration, and increase the abundance of important cultural resources like acorns, huckleberry and hundreds of medicinal plants that thrive in a fully functioning forest ecosystem,” Thomas P. O’Rourke Sr., then-chairman of the Yurok Tribal Council, said in a statement at the time.
But if the societal goal is preserving forests, it would be simpler and more effective to describe it accurately and fund it directly, said Haya, the UC-Berkeley expert. As soon as these forests get tied up in an offset program, the carbon math does matter, because every additional ton purportedly preserved in trees enables polluters to purchase the right to generate an additional ton of CO2.
Forest offsets appeal to the public partly because of what academics call “charismatic carbon” — they offer a feel-good story of environmental and social good.
“Any good conservation advocate would tell you there’s a desperate need for more funding, and we agree entirely,” CarbonPlan’s Cullenward said in an email. The “problem isn’t that conservation is bad, it’s that the system of carbon offsets channels these real needs and sincere hopes into a system that grinds it all up and spits out garbage on the other side.”
“The Best Bang for the Buck”
California’s Air Resources Board approved the forest offset program’s official rules in 2011, after years of discussions with dozens of experts, including government scientists and staff from conservation groups.
In adopting it, the agency relied heavily on Climate Action Reserve, a nonprofit that created programs with voluntary offset credits. The nonprofit, which continues to advise the agency, led an effort to calculate regional carbon averages as part of an initiative to update its voluntary offset rules.
To do so, the nonprofit used data from the U.S. Forest Service, which surveys tens of thousands of forest plots nationwide. The nonprofit grouped data from different tree species and combined data from various geographic zones into larger regional areas called supersections. This simplification allowed the Climate Action Reserve to create a set of common baselines that estimated the amount of carbon stored in typical privately owned forests. The baselines take into account such forest uses as logging.
But the use of these broad averages obscured real differences on the ground. Some industry insiders and researchers began to notice that landowners and developers routinely located their projects in areas where the specific tract of forest differed greatly from the regional averages.
Zack Parisa, chief executive of the carbon offsets company SilviaTerra, previously consulted for project developers and landowners enrolling forests in California’s system. But he said he stopped out of frustration, after seeing the ways it was regularly being gamed, including the cherry-picking techniques CarbonPlan highlighted.
Parisa said he doesn’t blame landowners or project developers, who are acting out of rational self-interest.
“If someone shows up and is offering a contract to buy carbon and it doesn’t require them to change anything about how they manage the forests, that’s free money and they’d be stupid not to take it,” he said.
“I’m not hunting for a villain here,” Parisa added. “Of course they look for the best bang for the buck.”
In addition to New Forests, other developers also worked on projects where favorable boundaries and forest types boosted the credits that could be earned, according to CarbonPlan. Those include Bluesource and Finite Carbon, which BP purchased a majority stake in late last year. The researchers found that those two developers’ projects, taken together, generated up to 24 million credits that don’t represent actual carbon reductions.
New Forests, Finite Carbon, Bluesource and other subjects of this article were provided the full study and an accompanying paper describing its methods.
Finite Carbon declined to address detailed questions, but stressed that the Air Resources Board and an independent auditor found that their projects were in compliance with the rules.
In a statement, the company said there were “unanswered questions” about the CarbonPlan study’s methodology, adding, “however we cannot comment further on it as the underlying raw data is not currently available for public review.”
Emily Six, the marketing and communications manager for Bluesource, denied the company had gamed the rules in any way.
In an email, Six said California’s program actually undercounts the carbon preserved through projects by not crediting the amount stored in other parts of the forest like soil, shrubs and foliage. She also stressed that without offsets, some landowners could have chopped down their forests to carbon levels well below the regional average.
“Deliberately overstating climate benefits would run counter to our very purpose for existence,” she wrote. “Bluesource exists to improve the world by improving the environment.”
The experts who wrote the original offset rules relied on the only national forest dataset available, from the U.S. Forest Service’s Forest Inventory and Analysis Program, said Constance Best, co-founder of the Pacific Forest Trust. The conservation nonprofit was closely involved in the creation of the early program and participated in it.
Best said it was necessary to create carbon averages for larger regions and forest types because there wasn’t enough fine-grained data to ensure accuracy at highly local levels. She disputed CarbonPlan’s claim that its researchers had created a better way of calculating regional averages, since their method required relying on a smaller number of forest plots.
“The reason some super sections are large is to assure the data is more accurate,” Best said in an email. “So their solution creates more problems.”
In a separate note, she said: “The paper you shared has a strong editorial bias that undermines its findings and makes me question their data and analysis. It deliberately exaggerates what they present as smoking gun over-credited projects.”
In an emailed statement, CarbonPlan acknowledges that using fewer forest plots entails some uncertainty. But the researchers stressed they clearly accounted for it by providing a range of results, and maintained their findings are more accurate because they considered the specific mix of tree species in each project. CarbonPlan also shot back at the allegation of bias: “Having done our work on the basis of extensive public program records, and with fully reproducible methods, data, and code, we are confident that other researchers are capable of judging our paper on its merits.”
While the board has updated regional averages based on more recent forest data, critics say efforts to address more fundamental problems have been thwarted.
Researchers and activists also worry about the close ties between the Air Resources Board and the groups that now profit from the program.
For example, whenever a landowner wants to enroll a forest tract in California’s program, they open an account at Climate Action Reserve or two other nonprofits that have received the board’s blessing to review the documents.
If the project clears the Climate Action Reserve’s review and a subsequent audit by the state board, the nonprofit charges 19 cents for every credit issued. For one of the largest projects in the program, for instance, that would have added up to more than $1 million.
It “strikes me as a massive conflict of interest for an organization — whether nonprofit or not — that designed the system to have a financial stake in its operation,” David Victor, a professor at the University of California, San Diego, who has closely studied international offset systems, said in an email. (Victor recently co-authored the book “Making Climate Policy Work” with Cullenward.)
“In any other market, putting the market players in charge of key elements of its design would lead to ‘hollers’” over the conflicts of interest, Victor said. With the forest offset program, “everyone seems fine or even happy about the arrangement.”
Climate Action Reserve didn’t respond to multiple requests for comment.
Credit: Jon Han, special to ProPublica/MIT Technology Review
‘Too Good to Be True’
Hardy, drought-tolerant softwoods like junipers and pinyon pines dominate in the hot, dry landscape of central New Mexico, with smatterings of taller Douglas firs and spruces in the cooler, higher reaches of the mountains.
But under the initial rules of California’s program, those forests were considered to contain no carbon whatsoever.
The error stemmed from the fact that there was no available Forest Service data in that part of New Mexico when the Climate Action Reserve calculated regional averages, said Olaf Kuegler, a Forest Service statistician who provided technical assistance to the nonprofit on the federal database.
Consequently, the Climate Action Reserve set the regional average for an area stretching nearly 34,000 square miles at zero, which meant anyone who owned a few dozen trees could earn carbon credits.
Kuegler said he wasn’t aware of the mistake until early or mid-2014, when Air Resources Board employee Barbara Bamberger asked him about it. Bamberger, who leads the board’s work on forest offsets, later highlighted the error during an October 2014 webinar on offsets.
During her presentation, Bamberger said the board was updating the regional averages in ways that could lead to major changes in certain areas.
“This may be due to the fact that no data existed for some years in the original span from years 2002 to 2006,” she explained. “For example, in New Mexico data wasn’t collected until the end of that period.”
Almost exactly one year after Bamberger’s presentation, New Forests’ affiliate filed the paperwork for a nearly 222,000-acre project in New Mexico, stretching across the Mescalero Apache Tribe’s nearly half-million-acre reservation about ninety minutes west of Roswell. More than a third of the project’s trees were carbon-rich Douglas firs, according to the project’s paperwork. Shillinglaw signed the forms.
The erroneously low carbon calculation allowed the developer to claim they could have heavily logged the forest, boosting the amount of credits they could earn.
The project earned 3.7 million credits for its first year, worth more than $50 million.
When the California board’s updated rules went into effect two weeks later, it set a far higher regional average for most of the project area. If that standard had been in place earlier, it would have eliminated nearly every credit the project earned, CarbonPlan found. The project generated more ghost credits than any other in the nonprofit’s study, based on its more conservative calculations of regional carbon averages.
The Mescalero Apache Tribe’s president at the time, Danny Breuninger Sr., said the tribe welcomed the project.
“None of us had heard about the carbon credit program, and in a way it sounded too good to be true,” he said. “But it was a great deal. It worked out great for us.”
Breuninger referred further questions to the tribe’s current president, Gabe Aguilar. Neither Aguilar nor the tribe’s attorney, Nelva Cervantes, responded to repeated inquiries.
In a statement, the Air Resources Board said the project met all the requirements of the program at that time. The fact that the board was in the process of developing new regional averages using data that didn’t previously exist didn’t make the earlier figures “invalid or erroneous,” it added.
‘A Second Wave of Colonization’
Ghost credits matter because they allow other companies to purchase the right to continue emitting real greenhouse gases.
Credits from the Mescalero Apache Tribe’s project were sold to PG&E, Chevron and a company that drills for oil in Kern County, California, according to the latest figures available.
The Yurok Tribe’s 7,660-acre project generated credits that were obtained by a variety of energy companies like Calpine, PG&E and Shell.
Some tribal members are deeply uncomfortable with the idea of selling offsets to companies like this even if they are legitimate, fearing they’re effectively profiting from pollution.
The offsets, by definition, allow California companies to continue producing more CO2 than otherwise allowed — as well as the toxic pollutants like soot and heavy metals that frequently accompany such emissions — often near poor neighborhoods. Communities near refineries, cement kilns and power plants have frequently opposed offset programs.
Thomas Joseph, an activist and a member of the Hoopa Valley Tribe in California, said offset developers target tribal projects because tribes are in “dire need of revenue” and own vast tracts of mostly intact forest. He said his tribe has resisted multiple pitches from developers. “For us to use this as a means to allow corporations to continue to pollute,” he said, goes “against our cultural values.” He added, “I see it as a second wave of colonization.”
Desautel, the Intertribal Timber Council president, sees it differently. When the issue comes up among tribal members, he explains that polluters under cap and trade need to pay either the state for permission to pollute, or landowners through carbon offsets.
“The check is getting written one way or the other,” he said. “It’s just a question of where it goes and what’s being accomplished with that funding.”
SilviaTerra’s Parisa said that landowners and project developers will continue to respond to the incentives created in the program, in ways that overstate climate progress, until the program itself changes.
“We need better rules,” he said. “Let’s make sure the dollars we spend actually change things.
“Forests really can be a part of the solution for the climate, but we haven’t gotten it right yet.”
How We Calculated Offset Credits and Their Monetary Value The value of the credits throughout these stories was calculated using the fourth quarter 2020 average price for all offsets in California’s system ($13.67). The actual amount of money earned by landowners, developers and other actors in the system will depend on when the credits were sold, how many were sold and how many they had to contribute to the program’s insurance “buffer” pool. These are private transactions, and the specific terms aren’t provided to outsiders. When the Air Resources Board issues credits to a project, about 20% of those credits go into the pool. Credits in the pool can never be sold, but act as a kind of backstop in case of wildfires, drought and other events. For instance, if a fire burned up part of a forest located on a project site, resulting in one million tons of CO2 released into the air, then a million credits would be removed from the buffer pool to account for the loss. Our story includes buffer pool credits when describing the credits issued to a group of projects, as all of those credits affect the integrity of California’s offset program. We exclude buffer pool credits when calculating the credits earned by any single project and their monetary worth. How We Put Together Our Maps The first map depicts the common practice (per-acre regional average) for the Northern California Coast Supersection, Redwood/Douglas-fir Mixed Conifer assessment area (high site class), and the Southern Cascades Supersection, Mixed Conifer assessment area (high site class), based on the Air Resources Board’s 2015 Compliance Offset Protocol. The second and third maps show what is effectively the common practice for each ecosection within the Southern Cascades Supersection; CarbonPlan calculated the numbers using data from the Air Resources Board and the U.S. Forest Service Forest Inventory and Analysis Program. The third map omits one additional project on the California-Oregon border. That project had initial carbon levels below the regional average, and was not included in CarbonPlan’s study. How We Got the Story ProPublica and MIT Technology Review decided to collaborate on this project because of our respective track records of reporting on carbon offsets. In 2019, ProPublica reporter Lisa Song wrote about problems with international forest offsets and California’s cap-and-trade program. Separately, Technology Review editor James Temple spent much of 2019 and 2020 reporting on the promises and challenges of carbon removal efforts, including the Air Resources Board’s compliance carbon offset program. Both Song and Temple had independently interviewed several co-authors of the CarbonPlan report for their respective stories. In late 2020, when CarbonPlan was partway through its analysis, study co-author Danny Cullenward pitched the study as a story to Technology Review. Temple then contacted Song to discuss a reporting partnership. We decided that such a complex, technical story would benefit from a newsroom collaboration. Cullenward, a lecturer at Stanford Law School and CarbonPlan’s policy director, had studied California’s climate policy system for years. In 2019, Cullenward and ecologist Grayson Badgley, his former colleague from the Carnegie Institution for Science, decided to analyze the state’s offset program in a comprehensive way after attending a workshop where they learned more about how the program’s rules were designed. (Cullenward is also vice-chair of the Independent Emissions Market Advisory Committee, a group of experts convened by the California Environmental Protection Agency to advise the Air Resources Board on cap and trade. Cullenward said his work at CarbonPlan doesn’t speak for the committee.) In early 2020, Cullenward joined the startup CarbonPlan. The nonprofit assesses the scientific integrity of carbon removal efforts. That includes various types of carbon offsets, as well as emerging technologies that remove CO2 from the air. CarbonPlan receives project-specific funding from companies and other organizations. For instance, Stripe paid CarbonPlan to evaluate different carbon removal options. Microsoft also paid CarbonPlan to study how climate change would affect the ability of forests to mitigate global warming. CarbonPlan used part of that funding to digitize the forest carbon offset project documents in California’s program. Badgley, a postdoctoral fellow at Black Rock Forest and Columbia University, digitized those records and was paid as a consultant by CarbonPlan. CarbonPlan then used separate unrestricted funding (from various individuals and foundations) to study those projects, working with Badgley and other scientists including Barbara Haya, who leads the Berkeley Carbon Trading Project at UC-Berkeley. Its study is focused on the primary form of forest offsets in California’s program, called Improved Forest Management. These IFM projects reward landowners for managing their forests in ways that prevent further emissions or absorb more carbon over time. In part because the study hadn’t been submitted to a scientific journal, which would include a formal peer review process, we took added steps to check its quality. First, we did a gut check and interviewed several forest experts about the report’s premise. CarbonPlan didn’t yet have final numbers on the scope of the over crediting, but academics we talked to said that using regional carbon averages created the possibility of awarding excess credits and incentivizing cherry-picking. Weeks later, when CarbonPlan completed a draft, we sent it to several outside scientists for a detailed review, including Heather Lynch, Professor of Ecology & Evolution at Stony Brook University, and a member of ProPublica’s data advisory board; Dan Sanchez, who directs the Carbon Removal Laboratory at UC-Berkeley; and David Valentine, Chair of the Department of Natural Resources and Environment at the University of Alaska-Fairbanks. These scientists are all experts on forests, climate change, the carbon cycle and/or carbon removal. They all have at least a general understanding of California’s offsets, but do not work for offset developers. We also sent the study to a fourth scientist, Hunter Stanke, a Ph.D. student in the School of Environmental and Forest Sciences at the University of Washington. Stanke developed the rFIA software that CarbonPlan used in its analysis. The software analyzes raw data from the Forest Service’s Forest Inventory and Analysis Program, often used by academics, government agencies and timber companies for purposes unrelated to offsets. Before the newsrooms sent Stanke the study, he had provided technical assistance on rFIA to the lead author of the CarbonPlan study, but he wasn’t aware CarbonPlan was using the software to study offsets. All four scientists praised the study and its methodology. They asked for clarification on several technical details, which we sent to CarbonPlan. The nonprofit incorporated some minor suggestions into its final draft, but said the changes didn’t alter the overall findings. CarbonPlan also conducted several analyses of its raw data on behalf of the reporters, including calculations of the level of excess crediting in projects that specific developers worked on.
[1] Url:
https://www.propublica.org/article/the-climate-solution-actually-adding-millions-of-tons-of-co2-into-the-atmosphere
