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Accounting for risk in valuing forest carbon offsets

Accounting for risk in valuing forest carbon offsets

Background

Forests can sequester carbon dioxide, thereby reducing atmospheric concentrations and slowing global warming. In the U.S., forest carbon stocks have increased as a result of regrowth following land abandonment and in-growth due to fire suppression, and they currently sequester approximately 10% of annual US emissions. This ecosystem service is recognized in greenhouse gas protocols and cap-and-trade mechanisms, yet forest carbon is valued equally regardless of forest type, an approach that fails to account for risk of carbon loss from disturbance.

Results

Here we show that incorporating wildfire risk reduces the value of forest carbon depending on the location and condition of the forest. There is a general trend of decreasing risk-scaled forest carbon value moving from the northern toward the southern continental U.S.

Conclusion

Because disturbance is a major ecological factor influencing long-term carbon storage and is often sensitive to human management, carbon trading mechanisms should account for the reduction in value associated with disturbance risk.

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