Carbon offsets are a big, confusing topic. Three breakout sessions at VERGE 20 covered this topic, with over 100 participants at each. Still, each one went over the allotted time with many questions left unanswered. While understanding the basics is important, many nuances and small details warrant their own entire discussion.
Carbon credit projects vary widely, from urban forestry projects to air carbon capture to regenerative agriculture. And while many will have the same basic benefits and limitations, there are huge differences in management, co-benefits, costs and analyses.
In two VERGE 20 sessions, experts dived deep into the specifics of soil carbon credits and forestry carbon credits. Here are six differences between these two popular types of carbon offsets.
1. Forestry credits have a longer history
Forestry credits have been around for a while and a lot of data is publicly available data from the USDA Forest Service’s Forest Inventory and Analysis program. The robust data set reports on trends in forest areas including size, species, health, growth, mortality, removals and carbon sequestrations. The data is publicly available for scientists to study and can help them come to concrete conclusions about the effectiveness of forests as a carbon sink.
"On the forest side, we have 100 years of public data in the United States on the types of trees and effectively the carbon content in different forest types," Danny Cullenward, policy director at CarbonPlan, said during VERGE 20. "We don't really have anything comparable on the soil side."
Soil credits are much newer. According to Cullenward, soil data is being collected by private and third-party platforms, and to get farmers to work with them, these companies have to promise data privacy and security.
"None of that [data] is feeding back into the public ecosystem to improve transparency," he said.
2. Soil is more challenging
Because soil carbon sequestration, the data associated with the process and the resulting credits are in their infancy, science hasn’t come to a consensus on many important aspects of this type of carbon sequestration. This includes the depth of soil monitoring that is needed. According to Cullenward, most models and samples only analyze the top layer of soil, the first 30 centimeters. But new science suggests there is a risk for reversal.
"Now there’s a strain of science suggesting that when you look deeper down to 1 or 2 meters, you get a very different answer," he said. "Might see a net reversal, when you look at the full profile. Everybody's focusing on the shallow surface layer. And you need to pay attention to emerging evidence about what happens across the deeper soil."
The second reason soil is more complicated is because it requires extensive physical sampling, which is expensive. Forestry, on the other hand, can use satellite imagery to verify the trees exist and are in the locations the model is assuming. No satellite can tell you what is going on in the soil.
Everybody's focusing on the shallow surface layer. And you need to pay attention to emerging evidence about what happens across the deeper soil.
3. Both have additionality issues, but they differ
Additionality is really hard to prove with any carbon offset project. For the uninitiated, additionality is the concept that the carbon removal is happening because of the investment from a carbon credit market and wouldn't have happened without that investment. Most of the time you are comparing one outcome to one that never actually happened. So additionality is always just an estimation evaluated against a baseline.
Forestry credits have been having an issue with that baseline calculation.
"The protocols are allowing landowners that are already managing their lands in sustainable ways to claim a baseline with aggressive harvesting, and earn offset credits without necessarily changing their land management practice," Barbara Haya, research fellow at the University of California at Berkeley, said during the VERGE 20 forestry credit session.
A land trust that was never going to chop down their trees could be collecting a forestry offset on the baseline that it would sell all its wood to the timber market. The company that invests to keep those trees alive actually hasn't protected anything.
On the soil side, there are economic advantages to regenerative agriculture practices. Studies indicate that crop rotations, no-till procedures and other sustainable techniques can increase crop yield, decrease costs and sequester more carbon into the land. Farmers have an economic incentive without the carbon market to change land management routines.
Cullenward expressed concern that farmers are just tacking on the climate benefits to a decision they already have made to get a few extra bucks from the carbon market.
4. Soil credits have more upfront costs than forestry
However, a rebuttal to the idea that farmers are making the switch to regenerative practices on their own is the large upfront costs it takes to do so. Adoption among farmers of regenerative practices is a big issue. They have to learn new skills and buy new machinery. Even then, according to Alexsandra Guerra, director of corporate development at Nori, a soil carbon marketplace, farmers will see reductions in yield for a few years.
"That does not make financial sense. A farmer isn’t going to adopt practices that for even a second, or even one growing season, will decrease yields much less for three to seven years," she said. "Farmers need to see there's a financial mechanism, trading price on carbon, where they could enter in some preliminary data and say, 'Oh, look, this how much money I can earn in a carbon market for the next 10 years.'"
They need to be able to create a financially viable plan for their farm and the carbon market investment helps bridge the gap.
In forestry, while some surveying costs are needed early on in the process, the carbon market is paying them to not do something, such as chop down the trees, which is much cheaper than paying farmers to do something.
5. Forestry’s longer contracts can create permanence horizon concerns
We need carbon to be stored for centuries to make a real impact, but short-term contracts might be the way to go. Nori makes farmers commit to a 10-year contract for soil sequestration. While 10 years is not enough to make an impact on our atmosphere, it allows Nori to check in on the farms and ensure they are continuing regenerative practices more often, every time they re-up on the contract.
Right now, forestry credit contracts tend towards 50 or even 100 years. Cullenward warned that buyers should be skeptical of forestry contracts written for these longer periods. Few partnerships in any field survive 100 years. The longest contract a typical financial institution will give you is a 30-year mortgage. Yet many forestry offset buys are content to sign onto a 100-year offset without really understanding how to monitor something for a century.
"You don’t know how credible those contracts really are," he said.
6. Soil carbon sequestration can be lost easier and quicker
The biggest risk for soil carbon offsets is how quickly they can be reversed. Just as easily as carbon can be put into the ground, it can be taken out. According to soil health experts such as Haya from UC Berkeley, there are a lot of biological ways carbon can be lost from the soil. Many of these are instantaneous when a landowner decides to change the way land is plowed. According to Cullenward, soil carbon is more vulnerable to reversals than forestry because a farmer easily can switch back to traditional farming methods without much notice.
To release all the carbon in a forest, however, takes a lot more time and planning. Getting machinery into the forest to chop the trees, finding a buyer and shipping the logs is a lot more obvious and visible. There is more time for intervention to prevent carbon loss. But there is one way forests can lose all the carbon in a matter of moments: wildfires. And with the fire season becoming more brutal and longer due to climate change and bad forestry management practices, it becomes a renewed and very real problem for forestry credits.
There are a lot of issues with both types of credits. But there are a lot of opportunities as well. Seizing the opportunities while addressing the issues is something we desperately need to figure out, and soon.
"There’s a climate crisis. I think that the space is rushing to find a solution because we need a solution," Guerra said. "We will never figure it out without actually implementing it."