Opportunities, challenges and markets for forest carbon offset projects

Forest-based activities can mitigate climate change by reducing carbon sources and enhancing carbon sinks. Under various emissions-reductions programs, credits (called carbon offsets) can be issued to forestry projects that can credibly demonstrate additional and lasting reductions in CO2 emissions. The greatest potential for forest carbon offset projects currently exists in voluntary emissions reduction programs and markets, which, however, have a negligible value in the global carbon market. Unless their relevance can be proven, forestry-based carbon offset projects will play a minor role in compliance markets. This is mainly due to concerns about the additionality, permanence, and leakage of carbon offsets generated by forestry projects. Key words: forest carbon offset project, emissions trading program, cap and trade, carbon market