Recent wildfires on the U.S. west coast threaten to exhaust forest “buffer pools” that act as a kind of insurance for carbon offsets issued to major companies, raising questions about the reliability of the offset programs themselves.
“As persistent drought and wildfire conditions threaten carbon offsets, the question is whether these offsets matter at all if their stored carbon goes up in smoke in a warming climate,” reports CNN.
The fires plaguing the region, including the Bootleg Fire in Oregon, are affecting forestry projects that issue credits to companies like Microsoft and BP. Corporations that pledge to achieve carbon neutrality often do so by purchasing carbon offsets, which fund forestry projects to sequester carbon through forest management. In theory, each credit purchased by the company represents one tonne of carbon that is permanently removed from the atmosphere, in effect “offsetting” equivalent emissions from that company.
Offset schemes include a “buffer”, usually consisting of 10 to 20% of a company’s credits, to ensure that purchased offsets are not compromised by environmental risks. In the event that some of a project’s trees die from wildfire, disease, or pests, the offsets remain valid so long as the buffer hasn’t been burned through.
However, the offsetting system is largely unregulated, and critics have long cautioned that many buffers could be too small to effectively insure against major fires, The Financial Review reports. Politico, meanwhile, warns that, if buffer forests continue to burn at higher rates, “the carbon accounting system could find itself in the red.”
Dan McGraw of market analysis firm Carbon Pulse told Politico the existing buffer pool is large enough to withstand the recent fires. Still, he added, the pool will “strain” if fires continue to multiply. Forecasters say the 2021 fire season is poised to break records.
Even if the buffer pools aren’t wholly destroyed by fires, as they diminish they become less protected against other threats from climate change. Some researchers say increasing heat waves—and the accompanying increase in fire risk—means the buffers should be much larger, CNN writes. And if an offset’s value “is not tied to an adjusted risk to stress like wildfires or drought through the 100-year life of the offset, what does it represent?” the U.S. TV network asks.