The ‘hidden’ social costs of forestry offsets

The article quantifies the size of ‘hidden’ social costs that are incurred by forestry offsets in the voluntary market that promise to offset present emissions sometime in the future. It does this by estimating the difference between the social costs of carbon (C) emitted and of costs offset by removal of C from the atmosphere by reforestation/afforestation. All current attempts to make forestry offsets more reliable focus on quality control rather than the mismatch of the timing of emissions and their offset. Recommendations that follow from the analysis are twofold. First, that markets for carbon dioxide equivalent (CO2e) removals by voluntary offsets should be confined to the annual incremental removals actually achieved. Second, the promoters of voluntary offsets projects should declare the annual stream of carbon credits and debits expected so that buyers can place a present value on such projects.