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

John O Nile,Guangyu Wang,Sarah Eshpeter,Jinliang Li,Nuyun Li,Anil Shrestha

doi:10.1007/s11676-021-01329-5

John O Nile, Guangyu Wang + Show 4 more

Open Access

https://doi.org/10.1007/s11676-021-01329-5

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Abstract

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.

Highlights

The increasing concentration of atmospheric greenhouse gases (GHGs) and consequent climate change is an urgent global issue with potentially catastrophic impacts on societal and environmental systems
Experts from the Chinese pilot systems, on the other hand, were enthusiastic toward forest carbon offsetting in China and suggested that forest carbon offsetting should be a mandatory mechanism for a robust carbon market
This study investigated the perceptions, attitudes, and challenges experienced by experts participating in established emissions trading schemes (ETSs) globally and revealed that while the incorporation of forestry offsetting embodies great GHG reduction potential, there are design and implementation challenges that should be addressed to ensure viable systems

Summary

Introduction

The increasing concentration of atmospheric greenhouse gases (GHGs) and consequent climate change is an urgent global issue with potentially catastrophic impacts on societal and environmental systems. Under ETSs, a government places a cap on aggregate emissions for equivalent tons of CO2 and issues permits (or allowances) for participating entities to use or trade the permits (Ellerman et al 2010; Doda 2016). These permits or allowances are tradable in the carbon market created by the cap, setting a market-based price per unit of pollution that provides an incentive for emissions reductions (Ellerman et al 2010)

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