With the North American fire season now in full swing, we’re starting to see multiple forest carbon offset projects burn.
Each year, we track wildfires burning in forests that are enrolled in California’s forest offset program. Under the program’s rules, California polluters can keep burning fossil fuels in exchange for protecting the carbon stored in these forests. That trade can sometimes make sense — but only if the forest carbon stays put. Wildfire poses a major challenge to this logic. When a credited forest burns, the carbon it’s meant to store returns to the atmosphere, on top of the fossil emissions it was supposed to offset. The California program has an insurance mechanism meant to account for this, but it’s increasingly clear that it won’t be able to cover the significant and growing losses wildfire is now causing.
We’re currently tracking wildfires burning in two California-enrolled forest offset projects — Opal Mountain (ACR554) in Central Oregon and Colville (ACR255) in Eastern Washington. Drought conditions, combined with a region-wide lightning storm last week, resulted in large fires burning through both projects. The Box Springs Fire has already burned more than 50 percent of the Opal Mountain project. Such extensive damage will likely result in the project’s termination and the loss of over 500,000 offset credits from California’s insurance buffer pool. That works out to roughly 2 percent of the pool’s remaining balance. Losses in the Colville project will likely be at least as large.
Unfortunately, we only expect these losses to grow. The seven-day forecast calls for hot and windy conditions throughout the region. We’ll post additional updates in the event of significant changes.