ABSTRACT

In this chapter, economic issues related to the creation of forest carbon offset credits are discussed in the context of forest carbon management strategies. Carbon offsets are defined as reductions in CO

compliance market but can nonetheless be used to counterbalance purchases of emission allowances. It is shown that carbon offsets created through forestry activities reduce compliance costs. Such offsets are created by sequestering carbon in living biomass, soil carbon pools and wood products; they also arise when wood biomass is used to produce energy, replacing CO

ted from fossil fuel burning. The greatest potential for carbon offsets from forestry may come when harvested wood products replace steel and/or cement in construction, thereby reducing CO

an example. Even so, four main problems with forest carbon offsets that militate strongly against their widespread use are discussed: additionality, leakage, duration or impermanence and governance. Other related issues are highlighted, including the use of temporary certified emission reductions and the possibility of including activities that Reduce Emissions from Deforestation and forest Degradation (REDD).