Key challenges and approaches to addressing barriers in forest carbon offset projects

Abstract

Forest carbon offset (FCO) projects play an increasingly important role in mitigating climate change through market mechanisms in both compliance and voluntary markets. However, there are challenges and barriers to developing an FCO project, such as carbon leakage and cost-effectiveness. There have been few attempts to summarize and synthesize all types and aspects of existing challenges and possible solutions for FCO projects. This paper systematically reviews and discusses the current challenges involved in developing FCO projects, and then draws on the experience and lessons of existing projects to show how those challenges were addressed in world-leading voluntary carbon standards, namely the Verified Carbon Standard, the American Carbon Registry, the Climate Action Reserve, and Plan Vivo. These voluntary markets have rich experience in FCO projects and are responsible for a significant share of the market. From the 53 publications used in this analysis, three broad thematic categories of challenges emerged. These were related to methodology, socio-economic implications, and implementation. Methodological challenges, particularly additionality, permanence, and leakage, were the focus of 46% of the selected research papers, while socio-economic challenges, including transaction, social, and opportunity costs, were addressed by 35%. The remaining 19% of the research articles focused on implementational challenges related to monitoring, reporting, and verification. Major voluntary standards adequately addressed most of the methodological and implementational barriers by adopting various approaches. However, the standards did not adequately address socio-economic issues, despite these being the second most frequently discussed theme in the papers analyzed. More research is clearly needed on the socio-economic challenges involved in the development of FCO projects. For the development of high-quality forestry carbon offset projects, there are many challenges and no simple, universal recipe for addressing them. However, it is crucial to build upon the current science and move forward with carbon projects which ensure effective, long-term carbon sinks and maximize benefits for biodiversity and people; this is particularly important with a growing public and private interest in this field.

Keywords

Forest carbon / Offset schemes / Market mechanisms / Challenges / Opportunities