Editor’s Note: Last June, American Forests’ Urban Forests Program director, Melinda Housholder, wrote a blog post detailing the tricky web that is carbon offsets and how they relate to urban forests. A year later, there have been some interesting developments on that front, so before we dive into those updates tomorrow, we wanted to re-share a slightly updated version of Melinda’s post as a quick refresher on the complicated issue of carbon markets.

In June 2012, I attended a workshop in Davis, Calif., called “Urban Forests & Carbon Markets” that American Forests participated in and co-sponsored through a grant with the U.S. Forest Service’s Urban & Community Forestry Program. As California takes the lead to develop a cap-and-trade model to reduce greenhouse gas (GHG) emissions statewide, American Forests is excited to be involved in efforts to advance urban forest projects for use in this cap-and-trade model.

What’s going on in California?
In 2006, California committed to reduce GHG emissions and passed Assembly Bill 32: Global Warming Solutions Act, often known as “AB 32.” This act directs the California Air Resources Board (CARB) to reduce GHG emissions throughout the state by 2020 to the levels of emissions in 1990. To accomplish this goal, CARB has played an integral role in developing California’s Greenhouse Gas Cap-and-Trade Program.

With this Cap-and-Trade Program, the state of California sets an absolute limit, or cap, on the amount of GHG emissions allowed throughout the state. Allowances to discharge a certain amount of pollution are auctioned off to emitters such as industries, buildings and manufacturers. To comply with the cap, the emitter then has the choice to either 1) reduce their emissions on site; 2) buy allowances to emit; or 3) buy offsets.

How do offsets work and where do urban forests fit in?

If an entity is emitting more than their allowed amounts of GHG, they have the option to buy a certain amount of offset credits issued through approved sources. In California’s case, these projects are approved under The Climate Action Reserve. Urban forest projects all over the country can apply under the Climate Action Reserve’s Urban Forest Project Protocol to receive offset credits that they can then sell to firms in California that are emitting more than their allowed amounts of GHGs.

There is great potential for urban trees to help reduce GHG emissions throughout the state. According to an article from the nonprofit California ReLeaf, researchers estimate that “if 50 million urban trees were planted strategically, then they could offset emissions of an estimated 6.3 million metric tons of carbon dioxide annually — around 3.6 percent of the statewide goal.” Currently, the only urban forestry project registered under the Urban Forest Protocol for carbon offset credits is a Greenhouse Gas Tree-Planting Project in Santa Monica that is designed to plant 1,000 new trees in parkways along boulevards.

As I learned at the workshop at UC-Davis last year, it has been challenging to register urban forest projects under this protocol to serve as offset projects. Tomorrow, American Forests Science Advisory Board member Dr. Greg McPherson will be on Loose Leaf to provide information on the exciting updates to urban forests and carbon markets since last year’s workshop and steps that have been taken to help make urban forests a successful component of the carbon market.