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Forest fires are sure to increase, but it’s premature to call California’s forest offset insurance pool inadequate

Published: October 6, 2020 by Editorial Team

The western United States is facing another difficult year of wildfires. Earlier this month, Oregon had more acres burn in one week that it normally does in an entire year. Tragically, the Lionshead Fire has affected a substantial portion of the Warm Springs forest carbon project. The fire is only 35% contained so it will be awhile before the true extent of the damage is known, but it almost certainly resulted in the release of carbon dioxide that the project was required to store until the mid-2110s.

The California Carbon market has a mechanism in place known as the buffer pool to safeguard against unintentional reversals of the permanence of the emission reductions from events such as fires. The buffer pool is comprised of credits that are added each time a forest project is issued credits. The Warm Springs project is the second forest carbon project registered in the California marketplace subject to a significant fire. Once on the ground assessments have determined how many offsets were reversed by the fire, a commensurate amount of offsets will be cancelled from the buffer pool, thus ensuring the environmental integrity of the offsets.

In response to this fire, questions have been raised about the adequacy of the buffer pool. One analysis concluded that the buffer pool could be depleted by 2100. This sounds dire, but there are two questionable assumptions driving this conclusion. The first is the frequency of severe fire events. The analysis offered no context or scientific basis for the frequency of fire events in its model that suggests the buffer pool would be depleted in 80 years. In fact, when contextualized with the 1% of US forestlands that burn each year, it becomes clear how unfounded that assumption really is. This is important because while fire seasons have been steadily getting worse, it’s important to provide a rationale based on actual data.

The model is also limited in that it assumes the buffer pool would be depleted in 80 years if no more offsets are added to the pool. The buffer pool is not static. It will continue to grow as current and new offset projects complete verifications under the California system. The analysis noted it estimates almost 1 million offsets were lost to the Lionshead Fire or roughly 4% of the buffer. It sounds alarming that one fire could deplete the buffer by 4% until you consider that in September alone an additional 1.7 million offsets were deposited into the buffer pool; many from projects in coastal Alaska and the eastern US, which don’t face the same level of fire risk as western forests. Looking at the projects that are awaiting review by the regulator, another several million offsets could be added into the buffer pool in the coming months.

It’s right to periodically review how offset standards treat fire risk and update those assessments. However, when it comes to the buffer pool, all indications are that it remains a robust tool for addressing the risk of future reversals from forest carbon projects in the coming years.


Wildfire Statistics 
Congressional Research Service, September 1, 2020

Carbon Offsets Burning
Claudia Herbert, Jared Stapp, Grayson Badgley, William RL Anderegg, CarbonPlan, September 17, 2020

Wildfires Burn Carbon Offsets
Brook Detterman, Kirstin Gruver, Beveridge & Diamond, September 22, 2020

This Oregon forest was supposed to store carbon for 100 years. Now it’s on fire.
Emily Pontecorvo and Shannon Osaka, Grist, September 18, 2020