Starting today, the American Forest Foundation (AFF) is auctioning off more than a million offset credits from its new Family Forest Carbon Program. The auction marks the culmination of years of effort to generate credits using a dynamic baseline — a technique meant to fix a critical shortcoming with how forest-backed offset credits are generated. There is a lot to be excited about when it comes to AFF’s implementation of dynamic baselines, but without improvements around basic project data disclosure, it will be hard for the public to independently assess the real impacts.
Carbon offset projects earn credits based on their performance relative to a counterfactual scenario called a baseline. For forests, that means comparing the carbon actually stored by trees against how much the forest might have stored without the project. Up until now, projects have had enormous leeway in modeling their baselines. There is significant evidence that many projects have used this flexibility to select baselines that generate the most credits, rather than baselines that reflect realistic counterfactual scenarios.
Dynamic baselines try to solve this problem by limiting developer flexibility. Rather than allowing developers to conjure up their own unobserved baseline scenario, a dynamic baseline approach establishes explicit rules for matching project forests with similar forests and comparing them over time. The fact that the baseline is measured rather than modeled makes it harder to generate credits based on unrealistic assumptions about the counterfactual scenario. This approach isn’t foolproof, of course. For example, offset projects and baseline forests could be poorly matched, generating flawed counterfactuals. The approach only works if the rules used to generate matches are robust and enforced. Nonetheless, the AFF auction represents an important step forward in making these types of improved credits the norm.
But dynamic baselines alone can’t guarantee that offset credits represent real climate benefits. Without access to public project data, independent observers can’t scrutinize how well this new crediting approach tracks real world outcomes.
The most basic example of this concern is the lack of project location data. Like many forest offset projects in the voluntary carbon market, we don't know the exact trees and forest plots associated with the credits AFF has put up for auction. Not knowing project locations means we can’t put them on a map to track whether or not they burn. Nor can we assess if reduced logging on enrolled properties leads to more logging on properties nearby. Public location data is also crucial for evaluating the performance of dynamic baselines in practice, the presence of adverse selection, and the procedure for matching project plots to control plots. The only way to check how projects deal with these issues is to analyze project boundary information, and ideally, to have access to all project data used to calculate credits.
The value of this type of oversight is on full display in a report AFF commissioned from the offset rating company BeZero. As part of bringing these credits to market, AFF granted BeZero access to project boundary data for their analysis. Based on what they describe as a “rudimentary screening,” BeZero found an enrolled property that included steep ridgetops that were unlikely to be harvested and at least one property that was already protected by a conservation easement requiring sustainable forest practices. While AFF shared their data with a third party in this one case, this type of analysis needs to happen on an ongoing basis, ideally using public data and open source methods.
To build trust in forest carbon offsets, project location data — and ideally all project data used in crediting calculations — must be available to the public, not just buyers or select third-party auditors. We encourage the same players leading the way with dynamic baselines to further raise the bar by making project data public. Dynamic baselines are a step in the right direction, but we still need to know the exact locations of the trees enrolled in forest offset projects.