Two weeks ago, HBO TV host and comedian John Oliver did a 23-minute segment on his take on carbon offsets. As a comedian, Oliver satirized the concept of carbon offsets. He brought forward a few examples of failed projects that have been in the media recently. If you have a few minutes, it is worth watching.
Soon after the episode aired (which picked up traction on LinkedIn), the American Carbon Registry (ACR) published a response to Oliver’s comedic critique. According to their website, ACR is “a nonprofit enterprise of Winrock International … founded in 1996 as the first private voluntary greenhouse gas registry in the world.”
The response gives a bit of background:
We believe that well-designed carbon markets can unlock a broad range of transformational actions to help achieve ambitious national and global climate goals. U.S. forests and forest products currently absorb and store almost 15% of the country’s carbon emissions from burning fossil fuels, but have the potential to capture nearly twice as much if we take actions such as planting more trees and employing climate-smart practices to conserve and manage forests.
The U.S. forest carbon market includes over 200 projects on more than 7 million acres across the country that have issued 218 million tons of CO2 emission reductions and removals in the last decade. ACR has issued two thirds of these credits under a combination of the California market and our own ACR program.
The rules underpinning quality in the carbon market are nuanced and have not been well conveyed in media coverage to date. Enrolling a forestry project on ACR represents an immediately effective, legally binding, and public-facing commitment to long-term carbon sequestration where it previously was absent…
Like anything else, as the market grows, our methodologies and standards continue to evolve and strengthen based on real world experience. In fact, last month ACR released an updated version of our IFM methodology that included updates to additionality safeguards; increased reporting requirements; and further specificity in project accounting, modeling, and verification, among other updates.
Regarding the specific projects Oliver highlighted, ACR states that those “together represent less than .01% of registered U.S. forest carbon projects and less than .25% of total volume of issued U.S. forest carbon credits – that were the subject of prior, deeply-flawed reporting.”
One point I found particularly interesting about long terms forest (and offset) management is ACR’s differentiation between conservation programs and land managed under an ACR:
Conservation is not guaranteed, regardless of current ownership class or management intent. Outside of a conservation easement, it is not common for a landowner with mature timber to make a long-term, legally-binding commitment (40 years for ACR) to light harvesting and to legally forgo the opportunity to do so. Forest management is long-term and cyclical based on financial needs, market conditions, agency priorities, mill conditions, and other factors. Carbon projects typically provide a minimal cost recovery in comparison to the forgone revenues and opportunity cost associated with harvest deferral and managing for carbon sequestration. Carbon projects do, however, provide legal certainty where it was previously absent that the project area will increase its carbon stocks over time and that the property will be managed to a standard that far exceeds that previously allowable.
Absent a legally binding constraint to how a particular land can be managed, management priorities can and do change. The sale of forest land for conversion to another use or commercial timber harvest on lands that don’t have restrictions is not unusual. ACR projects ‘lock in’ a conservative and sustainable management regime associated with carbon sequestration and its associated climate benefits.
That carbon offsets were even a topic for a 20 minute comedy talk show monologue is quite something in itself. I’m sure it brought the concept and issue front and center to more people than perhaps any other 20-minute period of time in history. Highlighting program and project flaws in this way could impact how companies themselves view their use of offsets, which I think is appropriate.
We have an entire session dedicated to carbon accounting and offset risks in the 1st Annual Practical ESG Conference next month. There is still time to register but time is getting short! Don’t forget that our 2022 Proxy Disclosure and 19th Annual Executive Compensation Conferences are the same week. Attend both sets of conferences virtually and save.
