Aug 02 2023

Another buffer pool update

Grayson Badgley 
Grayson Badgley

New reporting from Oregon Public Broadcasting provides strong evidence that the wildfire component of California's forest carbon buffer pool has almost surely been depleted. The reporting confirms that Klamath East (ACR273), which burned in the 2021 Bootleg Fire, will be terminated. Somewhat unexpectedly, they report that the Warm Springs project (ACR260), which burned in the 2020 Lionshead Fire, might also be headed for termination. To our knowledge, this is the first public disclosure by the project owner about the potential magnitude of the project's pending reversal.

We've estimated the potential magnitude of the Lionshead reversal on two previous occasions. First, as part of tracking the Lionshead Fire in 2020, we made a back-of-the-envelope estimate that the fire might reverse 0.96 million credits. Later, as part of a more detailed review of the effects of wildfire on offset projects, we estimated the minimum size of the reversal at 1.38 million credits. This new reporting on the possible termination of ACR260, which would trigger the retirement of at least 2.67 million credits, strongly suggests our previous estimates were conservative.

These new details about ACR260 allow us to provide a comprehensive update on the potential magnitude of the wildfire reversals we've previously analyzed (Table 1).

ProjectMagnitude of reversalSource
Eddie Ranch
3.95Project paperwork
Klamath East
1.14Project paperwork
Warm Springs
2.68New reporting
table 1

Magnitude of, and source of current information on, wildfire reversals that have burned six of California's forest carbon offset projects. Magnitude denominated in units of million tCO₂. We know about the status of reversals from three different sources: reversals verified by the California Air Resources Board (3 projects), reversals with project paperwork quantifying the magnitude of pending carbon losses (2 projects), and new reporting on the possible termination of ACR260.

Under the worst case scenario, wildfire-caused credit losses through the end of the 2022 fire season could total as much as 9.11 million credits. That total far exceeds the approximately 6.5 million credits set aside in the buffer pool to insure against carbon losses due to wildfire. With the program's wildfire reserve likely exhausted, California's regulator will need to compensate future wildfire losses using credits that were initially set aside to protect against other risks, like drought and disease.

Looking to the future, it's unsettling that tens of millions of additional credits have been issued to fire-prone forests throughout the West, including arid forests in Arizona and New Mexico, eastern Washington, and northern California. Wildfires in these projects are all but inevitable, posing an existential threat to the solvency of the buffer pool and the continued operation of California's forest offsets program.

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