Why Forest Carbon Offsets Aren’t a Substitute for Slashing Emissions

Companies need to both protect forests and cut carbon emissions in order to fight climate change (and look good doing it).
A palm oil plantation in Indonesia

Afriadi Hikmal/Getty Images

Delta Air Lines emitted 14.3 million tons of carbon dioxide into the atmosphere in 2020. Now the company is trying to make up for it by preserving more than 780 square miles of forest half a world away from its headquarters in Atlanta. The $30 million project aims to protect trees from illegal logging and expanding palm oil plantations in Cambodia’s Keo Seima Wildlife Sanctuary and Indonesia’s Rimba Raya Biodiversity Reserve on the island of Borneo. At Keo Seima, the project has created jobs, such as law enforcement and community agents, and secured land tenure for the Indigenous Bunong people.

Delta is just one of a long list of companies, big and small, that have recently made commitments to reach net-zero emissions, and many of them hope to do so through the purchase of forest carbon offsets. The idea is that companies could negate their carbon emissions’ impact on climate change by preventing an equivalent amount of emissions that would occur through the loss of forests, which store large amounts of carbon in their trees and soils and absorb carbon from the atmosphere.

In practice, unfortunately, forest offsets aren’t that simple, and the programs that provide them vary widely. At their best, offset programs temper escalating carbon emissions, engage corporations in voluntary climate actions, and boost forest conservation. At worst, they don’t actually prevent carbon emissions of any type and serve instead as greenwashing schemes that promote business-as-usual pollution, seize Indigenous lands, and hinder the development of a true low-carbon economy.

This is why it’s important to ensure offset purchases aren’t a substitute for companies’ efforts to decarbonize, especially in high-polluting industries such as commercial airlines, and that offset regimes don’t undermine the importance of directly regulating emissions from logging, palm oil, and other industries. In short, buying offsets is not an excuse for going lax on finding ways to cut carbon emissions.

How carbon offsets work

Forest carbon offsets dominate the globe’s carbon markets. On the carbon storage side of the equation is usually a property owner—a farmer in Southeast Asia or an Indigenous tribe in California, for example—who gets paid to preserve, replant, or delay the development of their land. A company then purchases credits that represent the avoided emissions to compensate for the company’s pollution. A single offset credit typically represents one metric ton of carbon dioxide, which is about the equivalent of driving 2,482 miles in an average gasoline-powered passenger car.

The concept looks good on paper. According to Global Forest Watch, the world lost 12 percent more of its primary rainforest in 2020 than the previous year—more than 30 million acres’ worth. Forests are vital carbon vaults that together absorb around 2.6 billion tons of carbon dioxide each year, or about a third of humanity’s annual fossil fuel emissions. Thus, increasing and maintaining forest cover is essential for mitigating the climate crisis, especially in places like Brazil, Canada, and Indonesia, where industry and agriculture are clearing forests at rapid rates. That said, there are a number of problems with carbon offsets that shouldn’t be ignored.

Tricky math and inequity

One major issue is called leakage. This is when the protection of one forest simply causes deforestation to happen elsewhere (i.e., a logger who might have been targeting the former landscape would simply go and log some other unprotected forest). Another, known as additionality, refers to whether or not the reduction in emissions would have occurred regardless of the offset. For instance, a project would not provide additional action on climate if it protects a forest that was never in danger of being cut down. In the end, neither of these scenarios actually helps to combat climate change.

There are also concerns about how much of a say communities have in the manner that offset projects manage local forests. For example, a recent case study shows how the pulp and paper giant Arauco generates carbon credits by burning wood at the Valdivia pulp mill in southern Chile to sell electricity to the public grid. The wood comes from expansive eucalyptus and pine plantations that encroach on agricultural land for small farmers as well as cultural and subsistence land for the Indigenous Mapuche people. The pulp mill has caused 25 years of conflict with the Mapuche, who say pollution from the mill and the loss of medicinal plants harm their health and disrupt their traditional ways of life. Further, wood biomass is not a clean source of energy and should not be generating carbon offsets in the first place.

Lorenzo Ayallapan Cayuleo, a respected cultural figure in the Mapuche community, in Araucanía

Christopher Pillitz/In Pictures via Getty Images

Finally, there is the issue involving the mathematics around how much carbon is actually being absorbed and stored in a certain area. There are all types of forests—tropical, temperate, boreal, etc.—and each comes with vastly different ecosystems, species, and threats. Different forests also hold varying amounts of carbon, a factor that can shift with seasons and alterations to the landscape, such as tree harvests, wildfires, and droughts. The math grows even trickier when you consider that carbon accounting is based not only on scientific data but also on policy decisions around what data to use, which threats and landscape changes to count, and which forests to include. There are also concerns that some governments’ accounting practices may allow companies to sell offsets generated from replanting efforts when they were the ones that cleared the forest in the first place.

“Given the underlying flaws in how countries like Canada calculate their forest carbon emissions, there’s a foundation of sand for any offset emissions regime,” says NRDC’s Jennifer Skene, who recently coauthored the Missing Forest Report (a collaboration between NRDC, Nature Canada, Nature Québec, and Environmental Defence Canada), which closely examines the carbon emissions from Canada’s forestry sector.

The report found that the Canadian government uses a misleading approach to forest carbon accounting, in part through broadly defining “managed forests” to include large swaths of never-logged primary forests while also failing to account for any emissions released naturally from those forests through wildfires, insects, and disease. The omission leads to the sector reporting inflated levels of carbon removals, which then effectively downplays the emissions reported from industrial logging happening elsewhere.

“In Canada, what we’re advocating for is a direct carbon price on forest carbon, putting it under the same regulation as all other sectors,” says Skene. “The atmosphere doesn’t recognize the difference between forest carbon and fossil fuel emissions, and neither should Canada’s regulatory mechanism.”

An airplane junkyard near a wind power plant in California

ElOjoTorpe/Getty Images

In California, which is at the forefront of the U.S. carbon cap-and-trade program, high-emissions companies can buy carbon credits in order to comply with the state’s climate law that aims to reduce carbon emissions 40 percent below 1990 levels by 2030. The California Air Resources Board, which oversees the state’s climate rules, bases the measurement for carbon credits on regional averages of forest carbon stores. If landowners show that they’ve increased carbon storage above that average, they can then sell credits representing that extra storage to companies seeking to offset their emissions.

But even this regulated market faces questions regarding its accounting practices. CarbonPlan, a nonprofit that evaluates carbon offsets, recently analyzed the integrity of California’s forest carbon offset program and estimated 29 percent of the offsets under review were over-credited. That amounts to credits for about 30 million tons of carbon dioxide (worth around $410 million) that aren’t actually putting a dent in total emissions.

The root of the problem: carbon pollution

But forest carbon offsets can have an important role in tackling climate change. Peter Miller, director of NRDC’s Climate & Clean Energy Program in the West, emphasizes that most voluntary offsets, such as those purchased to offset airline travel, can help address those emissions that will happen, regardless of whether the offset is purchased or not. For long plane trips, for example, there is not yet a viable low-carbon alternative. And if Delta, or any other company, voluntarily helps support the protection of 780 square miles of primary tropical forest and secures land tenure rights for Indigenous communities, then the total amount of emissions has improved.

A key challenge, says Miller, is defining and constraining the market in a way so that emissions are actually reduced or sequestered. While there is no regulatory standard for voluntary carbon offset accounting, major verification schemes, such as the Gold Standard and Verified Carbon Standard, serve the voluntary market.

Reforestation underway in a field that had been marred by illegal gold mining in Peru

Rodrigo Abd/AP Photo

Still, the fact remains that the world needs to rapidly decarbonize to avoid the most harmful consequences of climate change. Business can play a role here. Some companies, like Microsoft, have chosen to step outside the offset market. The tech giant is instead focusing on carbon removal. As part of its commitment to become carbon negative by 2030 and remove all the carbon the company has ever emitted by 2050, Microsoft has developed a $1 billion climate innovation fund aimed at fast-tracking the development of technologies that reduce, capture, and store carbon.

As part of its carbon-neutrality plan, Delta hopes to have access to 81 million gallons of sustainable aviation fuel by 2025, though it needs approximately 400 million gallons each year to power its fleet. Delta is also directly lowering emissions by streamlining its operations and replacing old planes with new, more efficient models.

“While longer-term investments and innovation in sustainable aviation are underway, we are leveraging the resources available today to reduce the impact of our emissions,” says Amelia DeLuca, vice president of sustainability at Delta Air Lines, in an e-mail. “Today, high-quality carbon offset projects are the most immediate and impactful way to address our carbon footprint.”

Plain and simple—while purchasing forest offsets can help keep carbon sinks intact when done right, finding ways to curb their primary emissions is vital for all companies looking to go carbon-neutral.


This NRDC.org story is available for online republication by news media outlets or nonprofits under these conditions: The writer(s) must be credited with a byline; you must note prominently that the story was originally published by NRDC.org and link to the original; the story cannot be edited (beyond simple things such as time and place elements, style, and grammar); you can’t resell the story in any form or grant republishing rights to other outlets; you can’t republish our material wholesale or automatically—you need to select stories individually; you can't republish the photos or graphics on our site without specific permission; you should drop us a note to let us know when you’ve used one of our stories.

Explainer

A practical and philosophical guide to neutralizing your carbon footprint.

Explainer

The ubiquitous climate target comes with big loopholes, but that doesn’t mean we shouldn’t hit it.

Explainer

Protecting the boreal is not only about saving trees and wildlife, says NRDC’s Jennifer Skene. It’s also about the people who’ve been living on the land for millennia and the urgent fight against climate change.

Guide

Forests are among our greatest allies in the global warming fight. Let’s protect them so they can protect us.

Guide

It turns out this controversial renewable hardly lives up to its carbon-cutting reputation.

Explainer

Why we must stop logging companies from destroying the boreal in order to avoid catastrophic warming of our climate.

Join Us

When you sign up you'll become a member of NRDC's Activist Network. We will keep you informed with the latest alerts and progress reports.