Inclusion of forestry offsets in emission trading schemes: insights from global experts

Emissions trading schemes (ETSs) have been a central component of international climate change policies, as a carbon pricing tool to achieve emissions reduction targets. Forest carbon offset credits have been leveraged in many ETSs to efficiently meet emission reduction targets, yet there is little knowledge about the perceptions, experiences, and challenges associated with the forest carbon offsetting in existing and pilot ETS. Given that the future inclusion of forest carbon offset in ETS management activities and policies will require strong support and acceptability among the institutions and experts involved in ETS, this study explores the experiences and lessons learned with 16 globally engaging experts representing major existing ETSs (North America, Europe, and New Zealand) and Chinese pilot ETSs towards the inclusion of forestry offsets, major concerns and challenges with existing implementation models. Findings revealed that many respondents particularly from North America, New Zealand, and Chinese pilot systems portrayed positive attitudes toward the inclusion of forestry carbon offsets and its role in contributing to a viable ETS, while European experts were not supportive. Respondents cited leakage, permanence, additionality, and monitoring design features as the major challenges and concerns that inhibit the expansion and inclusion of forest carbon offsetting. Respondents from Chinese pilot schemes referenced a unique set of challenges related to implementation, including the increasing cost of afforestation and reforestation projects, the uncertainty in the future supply and demand for their national Certified Emissions Reduction (CER) scheme and landowner engagement. Existing and future ETSs should learn from and address the challenges experienced by global experts and carbon pricing mechanisms to design, evaluate, or enhance their forest carbon offset programs for an effective and viable system that successfully contributes to GHG mitigation practices globally. We recommend inclusion of forest carbon offsets at the early stages of ETS improves the perceptions and experience of policy makers and practitioners toward the success and potential of forestry offsets in ETS ensuring familiarity and confidence in the mechanism.

Automated summary

ETSs have been central to international climate change policies as a tool for achieving emission reduction targets through carbon pricing. Forest carbon offset credits have been used in many ETSs to efficiently meet these targets, but there is little knowledge about the perceptions, experiences, and challenges associated with forest carbon offsetting. Respondents from North America, New Zealand, and Chinese pilot schemes generally support including forestry carbon offsets in ETS, while European experts are not supportive. Major challenges cited include leakage, permanence, additionality, and monitoring design features, with Chinese pilot schemes facing unique challenges related to implementation.