Spot fires smolder near trees damaged by the Bootleg Fire on Thursday, July 22, 2021, in Paisley, Ore. (AP Photo/Nathan Howard)

Bootleg Fire is burning up carbon offsets

Updated 2127 GMT (0527 HKT) July 22, 2021

(CNN)Oregon's largest wildfire so far this season, the Bootleg Fire, has burned nearly 400,000 acres spreading approximately four square miles a day across the southern parts of the state. At the time of this report, the flames spread through one fifth of forests set aside for carbon offsets in the immediate area. The trees in these forests were meant to survive one hundred years. As persistent drought and wildfire conditions threaten carbon offsets, the question is whether these offsets matter at all if their stored carbon goes up in smoke in a warming climate.

What started as a lightning strike on July 6, the Bootleg Fire has now grown to roughly twice the size of New York City with 2,250 personnel fighting these blazes spanning over 40 miles east to west. Now the fire is generating its own weather with only 32% of the fire contained. A mountainous and forested region, Klamath county sits just north of the Oregon and California border and is home to US National Forest land.
Some of that land is private, including the carbon offset known as Klamath East owned and operated by the Green Diamond Resource Company, a forest products company. Since the Bootleg Fire started, it has spread through nearly 90,000 acres of trees set aside to offset carbon emissions on behalf of businesses and individuals. That's around one fifth of Klamath East's total land, according to a CNN analysis.
A carbon offset can take many forms, but the large majority in the United States are created under the designation: Improved Forest Management. To be considered as this type of offset, the landowner must show that their forest performs above average as a carbon reducer when compared with other forests. Once approved, they earn a credit for every ton of CO2 their forests absorb. Those credits can be sold to a company looking to compensate for their own emissions, allowing them to claim carbon neutrality. The company can then hold or trade the credits until they are submitted to the government for compliance purposes. Credits aren't like traditional currency; once it's submitted, it is considered "retired" and cannot be used again.
As of December 20, the Klamath East offset has been issued over 790 thousand credits with 140 thousand of them retired. Under California Cap and Trade, if your company is looking to offset its emissions, you can still buy carbon credits from the Klamath East offsets even though they're losing trees to wildfires because of how these trees are insured.
Representative Patti Case of the Green Diamond Resource Company, which runs the carbon project, said it will be weeks after the fire is out before the company can assess the impact on its forests. Purchased in 2014, their acreage had been heavily harvested before their ownership. Now the company is issued carbon credits as their forests improve.
"While it may seem that nothing would escape the flames, often we find areas after the fact that are merely scorched and will survive. In other cases, the fire burns so hot that everything is devastated and replanting is a challenge," Case said.
Also working in Green Diamond's favor is that they are not on the hook for lost trees due to wildfire since risks are shared across all offsets. Beverly Law, professor emeritus of Global Change Biology at Oregon State University College of Forestry, said carbon-offset programs often take into account that some forest may burn. She said efforts can be made to pick areas that are less likely to burn, based on history.
"They expect that will happen sometimes," Law said about risks to the land, such as fires. "There's going to be a lot more risk with climate change."
The California Air Resources Board (CARB), which determines who qualifies for offsets, makes sure that every offset sets aside 10 to 20 percent of their carbon credits goes to a so-called "buffer pool," which acts as an insurance for all offsets overseen by CARB.
Some researchers, however, are concerned that the buffer pool system's allocation of 10 to 20 percent does not adequately prepare for a future where climate change makes wildfire seasons start earlier, last longer, and burn more forests.
"For starters, the numbers for fire risk should be a lot higher, and they should vary based on location, and they should incorporate the changes we are very confident will occur in future climates." says executive director Jeremy Freeman of Carbon Plan, a non-profit focused on carbon offset policymaking. "Even just comparing, say, the period from 1980 to 2000, versus the period from 2000 to 2020, the risks (of wildfires to offsets) on average across the United States have already doubled by our comparisons."
Meanwhile, the creation of carbon offsets remains high. And if their value is not tied to an adjusted risk to stress like wildfires or drought through the 100 year life of the offset, what does it represent?
As policy director at Carbon Plan, Danny Cullenward notes, "if there's a fire, nothing changes in terms of the landowners bottom line, so I think that's part of the problem we're dealing with here: whether the system appropriately reflects the probability of fire."
From 2015 to 2019, 179 million voluntary credits were generated in the US. That's a 350% increase compared to the period from 2010 to 2014, according to the Berkeley Carbon Trading Project's Voluntary Registry Offsets Database.
Not only is the available stock of carbon credits rising, but the market value of those credits are increasing too as US companies, from banks to airlines, have increased their net-zero pledges to wipe out their carbon emissions over time. Voluntary offset credits can be bought at the California-Quebec linked quarterly auction if they meet all the requirements.
When wildfires burn up carbon offsets, it's not the responsibility of the landowner, the buyer of the credit, or the seller of the credit to evaluate whether that carbon credit still represents a metric ton of CO2 absorbed by trees. In reality, those trees represented by the credit may have burned up in the Bootleg Fire or the Chuweah Creek and Summit Trail fires burning on the Eastern Washington offset.
And if in only one or two seasons of wildfires, these wildfires strip away at the offset buffer pool, climate change will likely collect more of the