The Bootleg Fire in southern Oregon in 2021 burned more than 435,000 acres, including a quarter of the Klamath East forest carbon project. (Photo by U.S. Forest Service/Flickr)
A large Oregon forest meant to offset planet warming emissions was burned three years ago in a wildfire, and the project had to be pulled from a carbon credit market that aims to fight against climate change.
Now, its owners want to re-enter some of those burned acres into California’s carbon market, which sells credits based on the amount of emissions stored by trees. When trees are burned, they release stored emissions, but the owners, Green Diamond Resource Company, maintain that the scorched land still offers some climate benefits.
The move would mark a first, and it worries critics. They say that the land is already in an area ripe for wildfires, and they’re concerned that re-enrolling high-risk land would set a precedent that could undermine carbon crediting markets, which mark one approach to curtailing harmful emissions.
In 2021, the Bootleg Fire burned a quarter of the 435,000-acre Klamath East carbon project. In response, the California Air Resources Board removed the project from its carbon offset market last year because it could no longer meet its promise of capturing and storing the hundreds of thousands of metric tons of carbon dioxide that was promised.
[INFO BOX: How do forests store carbon dioxide? And how do carbon crediting markets work?]
But recently Green Diamond asked the board to enroll four new forest carbon offset projects in the same area of southern Oregon — including 48,000 acres of the former Klamath East project that burned in the Bootleg Fire.
Though a first, the re-enrollment would not be against the rules of California’s government-regulated carbon market, officials at the California Air Resources Board, provided the trees are not double counted. This means the carbon capture power of previously registered trees cannot be included in the new plan.
The new projects have not been approved but the request is raising concerns among watchdogs who fear it would compromise the integrity of the state’s carbon market and encourage the development of projects in areas with a high fire risk and low climate benefit.
“Do you want to count on those arid, ponderosa pine forests in southern Oregon for carbon offsetting? For making good on 100-year climate commitments?” said Grayson Badgley, a researcher at the nonprofit Carbon Plan, which analyzes climate change solutions and who’s written about the Klamath East project. “That doesn’t mean that there shouldn’t be money for changing how we manage those forests, because there’s probably a lot of good that can be done, but do you really want to couple that with how we manage atmospheric carbon dioxide concentrations and try and hit long term temperature goals?”
Dave Walters, vice president of acquisitions and business development for Green Diamond, said without the financial incentive of the carbon market, the company could be forced to harvest timber in the area more aggressively or to sell the land altogether, leading to further negative climate benefits.
“We will have to make a modest return in that area. So there’s very limited other options,” he said. “There are real consequences of not being enrolled in the program and having that offset revenue.”
Risky projects
When the Klamath East project was approved by the California Air Resources Board, it was supposed to capture and store nearly 350,000 metric tons of carbon dioxide from the atmosphere over the course of a century — equivalent to taking more than 81,000 gas-powered cars off of roads for a year. Green Diamond forest managers agreed over that timespan that they would allow the trees to live longer and to cut trees down less frequently than they typically would. In exchange, Green Diamond received nearly one million carbon credits and likely sold them for about $14 million, according to an analysis by Badgley of Carbon Plan.
When the project was terminated in 2024, Green Diamond wasn’t forced to return the money or make up for the lost credits. But the California Air Resources Board was forced to retire more than one million carbon credits from its buffer pool to make up for the loss. That pool is made up of a small portion of credits the state takes from its carbon offset projects to insure its program against failures, such as Klamath East.
It was the second largest withdrawal from the buffer pool in California’s carbon market history.
That worries Badgley, who said the potential for more wildfires in the West each year, especially in dry, arid forests such as those in southern Oregon, could one day bankrupt California’s buffer pool and its cap-and-trade program. He is also concerned that if the program accepts burned acreage it would set a risky precedent.
“It seems incredibly risky to allow projects in regions that are already arid, have already demonstrated that they can burn, to sort of re-up themselves and continue to add liabilities to the buffer pool and to the program as a whole,” Badgley said.
Market incentives
Walters, of Green Diamond, said if its new projects — totalling 352,000 acres including the 48,000 formerly enrolled acres — are approved by California for the carbon market, the company is willing to contribute more of its own credits to the buffer pool to reflect the wildfire risks.
“I mean, we’re in favor of revisiting buffer pool contribution levels to make sure that enough credits are contributed there so that in the face of climate change we do have a healthy, essentially, insurance policy on the climate good that comes out of these things.”
Green Diamond has planted seedlings in the formerly burned acres and will continue to do so regardless of the carbon market, Walters said. It’s the future of those seedlings that will be determined by whether or not their new forest carbon projects are accepted by California’s carbon market.
Walters said that among the company’s guidelines are environmental stewardship, but also profitability.
“These are, candidly, you know, dry, low-productivity timberlands. There are really pretty limited ways to manage them to be kind of in keeping with our guiding principles,” he said.
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