California ARB buffer mitigates current wildfire risk to forest carbon projects

Under the California Air Resource Board (ARB) forest carbon methodology and others, each AFOLU carbon project deposits 10-20% of each issuance’s total credits to the buffer pool. The pool is an insurance mechanism against project failure: each project’s contribution amount is based on a host of risk factors such as fire, disease or pest outbreaks, and management decisions. After more than fifteen years, the ARB buffer contains more than 30 million tonnes of CO2e sourced from 143 forestry projects in 23 states. Figure 1 (below) shows that growth in the ARB buffer pool has sufficiently mitigated carbon losses (reversals) thus far; buffer contributions accumulated over the 15-year life of the California compliance market have been more than adequate.

Last year, the Lionshead Fire in Oregon burned through the Warm Springs improved forest management (IFM) project, one of the largest in the compliance market. The fire sparked media coverage questioning whether the buffer pool insurance mechanism used by carbon registries was sufficient to cover increasing carbon offset losses to wildfire [1]. The Climate Trust published a response to this criticism, pointing out that these critiques of the ARB buffer pool were based on incorrect assumptions. After another intense fire season and more consternation regarding the permanence of forest carbon projects, we took a deeper look at publicly available data [2] from ARB to assess whether their system can compensate for carbon losses under the current wildfire regime.

The fires of 2020 and 2021 have yet to be factored into the buffer pool because the ARB allows projects 23 months to provide verified estimates of offset losses following an unintentional reversal such as fire. As a rough estimate of the potential damage to carbon projects, we applied the average rate of moderate and severe fire damage in the western US [3] to the entire volume of credits associated with the major fires affecting ARB projects: the Warm Springs IFM (2020 Lionshead Fire), Colville IFM (2021 series of fires [4]), and Klamath East IFM (2021 Bootleg Fire) projects. In this conservative scenario, up to 6.8 million tonnes could be depleted from the buffer. While this is a sizeable number, it is important to remember that the buffer pool grows larger each year (Fig. 1). Additionally, only 1% of US forestlands experience a wildfire each year [5]; this number includes mild and moderate fires where there is low to moderate carbon loss.

The buffer pool becomes even more secure as carbon projects continue to diversify and multiply outside of the West. Because the buffer pool is shared between all AFOLU projects, contributions from projects in more stable locations (e.g. forestry projects in coastal Alaska or in the Northeast) are available to compensate for carbon losses. Carbon registries should continually assess and improve the efficacy of the buffer mechanism in light of growing risks. But with more than 30 million tonnes of CO2e available, the buffer is ready to cover the inherent risks of climate action.

Figure 1. California ARB buffer growth over time. Potential losses from fire refers to estimates of offset volumes that were threatened by recent fires in the West. The ARB allows projects 23 months to provide verified estimates of offset losses.

Figure 2. Percentage of credits from each region supplying the ARB Forest Buffer.

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