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Forest Carbon Offsets, the benefits and misconceptions

The Climate Innovation team’s Michelle Connolly and Rebecca Rogerson answer some of your most frequently asked questions on forest carbon offsets.

Michelle and Rebecca from the Climate team

What exactly is a carbon offset project?

Michelle: Carbon offsets are a tool Indigenous communities can use to address climate change, support sovereignty, and protect the land. When they’re done well, offset projects bring benefits to the environment, the atmosphere, and to Indigenous communities that are driving the projects.

Forests, grasslands, and wetlands capture and store carbon pollution created by the modern economy. Even forests that burn, or experience an insect outbreak, continue to store and sequester carbon. When Indigenous communities improve the carbon storing and sequestering capacity of their lands and waters, such as protecting forests from logging, they are enabling more carbon storage and sequestration in those forests. In turn, communities should benefit economically from these improvements — and carbon offsets are one way to do that.

When carbon offset projects are developed and implemented by Indigenous communities, they can be a powerful tool in redistributing power and democratizing opportunities for climate change action.

Rebecca: Carbon offsets represent deliberate reductions in carbon emissions. One carbon credit represents one tonne of carbon dioxide or equivalent kept out of the atmosphere. Carbon offsets are purchased and sold in compliance and voluntary markets. Compliance markets are those created by government regulation designed to limit carbon emissions. Voluntary markets create opportunities for offsetting above and beyond government regulatory systems. The carbon credit is what is being “supplied” in the market, while the demand side is made up of large emitters, organizations of all sizes, and individuals who are looking to reduce their carbon footprint. Example of a forest carbon offset project and how it works

What are the common misconceptions about carbon offsets?

Rebecca: One common misconception is that carbon offset projects commodify nature. Carbon finance projects put value on the action and the people that make it possible to keep forests standing — not on the forests themselves. If forest carbon offsets commodify anything, it’s human action for the maintenance and enhancement of natural processes in a defined area.

For a carbon project to be eligible to create offsets it must go beyond “business as usual”. In most cases, “business as usual” looks like resource extraction, such as logging at-risk old growth forest or developing mining operations on high carbon landscapes. Carbon offset projects provide a unique opportunity for communities to generate revenue for work that is generally not valued in our current capitalist economy, like protecting forests. In this way, offset projects can be a catalyst for a larger paradigm shift.

When an economy creates opportunities for communities to develop carbon offset projects, it indicates that the economy values Indigenous-led conservation. It says the economy values communities holding the power to decide how their lands are managed, monitored, and protected. It says the economy values rural, remote, and Indigenous communities in building a sustainable economy that provides for life. This is the kind of economy we all need to be building together.

Why aren’t there more active forest carbon offset projects? What’s preventing them from happening? 

Michelle: Understanding the need for climate solutions has been building for some time, and we’re still gathering knowledge on how to fund and deploy carbon that will demystify offset projects. A major focus of our work at Ecotrust Canada is to help build capacity, understanding, and specific pathways to enable communities to develop carbon offset projects. To that end, we’re developing a First Nations Carbon Portal that will demystify carbon and climate, and enable communities to get a sense of the feasibility of a project on their lands. More on that below!

Indigenous Peoples’ rights to carbon stored on their lands and its potential revenues are not yet recognized by governments in Canada. In British Columbia, the government takes the position that in absence of any agreement or legislation the province owns the rights to benefit from land-based offset projects on ‘Crown land’ (which does not include private land or reserve land), except in relation to lands where Aboriginal Title has been proven (e.g., Tŝilhqot’in). This one-sided interpretation of “ownership” must change if communities are to benefit from carbon offsets on their lands. We know certain rights extend to Indigenous communities on their traditional territories even in the absence of proof of title, and this should be the case for carbon rights as well.

Where are carbon offsets working? And why?

Michelle: Two projects, the Great Bear Forest Carbon Project and the Cheakamus Community Forest Carbon Project are fully operational, while 14 First Nations currently have agreements with BC which allows them to participate in the carbon market. These communities have signed Atmospheric Benefit Sharing Agreements with BC. These agreements clarify who owns the carbon in a specific area and allows the sale of carbon credits by identifying a percentage of the benefits granted annually to the communities.

In other parts of the world, 13 tribal groups are involved with forest projects via the California cap-and-trade system. In Australia, 22 Indigenous-led projects have been created through Australia’s Aboriginal Carbon Fund, and in New Zealand a Māori owned corporation is generating revenue from carbon credits from an old growth project on their lands.

What is the carbon rights movement?

Michelle: Carbon rights are generally understood as the right of communities to manage carbon as they see fit, including the right to derive revenues from activities that store and sequester carbon. Without clear rights to carbon, secured and legally upheld, it will be difficult for Indigenous communities to fully participate in selling carbon credits. Ecotrust Canada is working alongside the Conservation Reconciliation Partnership and the BC Assembly of First Nations to support policy changes for Indigenous carbon rights.

What could a carbon offset project bring to rural, remote, and Indigenous communities?

Rebecca: I think what gets me most excited about carbon projects is the potential for communities to have a sustainable revenue stream that aligns with their unique community values. Offset projects allow communities to decide how their lands are managed and where the revenue from these projects goes. We’re seeing the creation and expansion of community programs, like Land Guardian Programs, that provide meaningful employment opportunities, pass on traditional knowledge, enable language revitalization, increase monitoring of sacred sites and hunting grounds, and bring technical skills development. It’s really inspiring to see these initiatives being driven by community, on the lands that they call home.

In short, offset projects support Indigenous communities in actively asserting sovereignty over their traditional lands. The conversation around carbon rights is also an important opportunity for Nations to continue to assert rights to their land, water, and air.

What is Ecotrust Canada working on right now to enable forest carbon offset projects?

Michelle: We are at a critical juncture for Indigenous sovereignty, nature, and climate integrity. Market demand for carbon offsets in Canada is shifting the feasibility of community-led climate projects. Forest carbon projects are a strategic opportunity for communities interested in developing a sustainable economy, affirming Indigenous Peoples’ inherent and constitutional rights, and protecting biodiversity. Ecotrust Canada and the BC Assembly of First Nations are collaborating to create a First Nations Carbon Portal. This portal will be a “one-stop-shop” to learn about forest carbon offsets and to evaluate feasibility.

Rebecca: In addition to supporting specific, on-the-ground Indigenous-led forest carbon offset projects, Ecotrust Canada is working on building a Forest Carbon Community Toolkit. The toolkit contains curriculum that supports rural, remote, and Indigenous communities in assessing if a forest carbon project is feasible on their land, as well as step-by-step guidance and technical expertise in developing a forest carbon project. We’re committed to delivering this toolkit to our community partners and making offset knowledge more accessible to interested communities.

The Climate Innovation team continues to support a pathway for federal government investment in nature. We are heartened by the establishment of the Nature Smart Climate Solutions Fund that lays the groundwork for such a system. Having a mechanism for direct investment in nature that identifies and quantifies carbon benefit and applies it to Canada’s global climate commitments will create a solid path for building Indigenous-led, high-impact, natural climate solutions in Canada.

[Published July 28, 2022]