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Good practice Imported

California Compliance Offset Program — U.S. Forest Projects Protocol

United States of America · Sacramento · See the United States of America profile · See the Sacramento profile

Evidence: Quasi-experimental Top 96% 20/100 · Ask Evidence Copilot about this practice

California's CARB cap-and-trade offset market has credited ~74 improved-forest-management projects with 130M+ carbon credits since 2013 — but peer-reviewed research found ~29% were over-issued 'phantom' tons, raising serious doubts about real climate benefit.

74 projects
Improved forest management projects credited (by ~2020)
4000000 acres (over)
Acreage credited
130000000 credits (over)
ARB offset credits issued
1.8 USD billion
Estimated market value of credits (2020 prices)
29.4 %
Over-credited 'phantom' tons share (2022 study, 65 projects)
30000000 tCO2e
Phantom tons volume (approx.)
410000000 USD
Estimated value of phantom tons (approx.)

Details

Maturity
Established
Promoter
California Air Resources Board (CARB)
Period
2011-present
Keywords
forest carbon, cap-and-trade, compliance offsets, improved forest management, carbon markets

Context

California's Compliance Offset Program was created under the Global Warming Solutions Act of 2006 (AB 32) and began operating under the state's cap-and-trade regulation on 1 January 2013. The California Air Resources Board (CARB) adopted its U.S. Forest Projects compliance offset protocol on 20 October 2011 (revised 25 June 2015), issuing its first offset credits that September.

Objectives

The protocol allows regulated entities to meet part of their cap-and-trade compliance obligations by purchasing verified forest carbon offset credits from improved forest management (IFM) projects.

Activities

By around 2020, roughly 74 IFM projects covering more than 4 million acres had been credited under the protocol, generating over 130 million ARB offset credits (ARBOCs) — about two-thirds of every compliance offset ever issued in California, worth an estimated USD 1.8 billion at prevailing 2020 prices. Each project must be verified by an independent third party through an approved registry (Climate Action Reserve or American Carbon Registry), with site visits required at least every six years and a 100-year monitoring commitment. Projects contribute a share of credits to a shared Forest Buffer Account intended to insure against reversals from wildfire, disease or pest outbreaks.

Results

The programme's credibility has been seriously challenged by peer-reviewed research. A 2022 Global Change Biology study (Badgley et al., building on CarbonPlan analysis) found that comparing projects to overly broad regional carbon-density baselines led to systematic over-crediting: about 29.4% of credits from 65 IFM projects — roughly 30 million tCO2e, worth about USD 410 million — were 'phantom' tons with no real emissions benefit.

Conclusions

A separate 2022 study found the wildfire buffer pool undercapitalized relative to actual reversal risk, and a 2023 follow-up found little evidence that credited projects changed their forest management.

Implementation
Indicative cost
Very high (> €5M) — Over 130 million credits issued, estimated worth USD 1.8 billion at 2020 prices; ~USD 410 million of that attributed to over-credited 'phantom' tons.
Time to results
Long (> 3 years) — Protocol adopted 2011, credits issued from 2013; each project carries a 100-year monitoring commitment.
Staffing & skills
California Air Resources Board (CARB), Independent third-party verifiers (Climate Action Reserve, American Carbon Registry), Forest project owners/developers

Conditions for success

  • Accurate regional carbon-density baselines for crediting
  • Mandatory third-party verification and registry oversight
  • Adequately capitalized wildfire/reversal buffer pool

Common failure modes

  • ~29.4% of credits identified as 'phantom' tons with no real emissions benefit (Badgley et al. 2022)
  • Wildfire buffer pool found undercapitalized relative to actual reversal risk
  • 2023 follow-up found little evidence credited projects changed forest management practices

Commonly funded by

National / regional programmes

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Data sources

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