Mother nature is the world’s original climate tech. Forests, wetlands, and agricultural lands have immense potential to drive positive climate impact. Collectively, nature-based solutions can make up 37% of emissions reductions needed to stay below 2 °C by 2030. Forests, in particular, can offer more than two-thirds of cost-effective nature-based climate mitigation.
Technological and engineered removal solutions such as direct air capture and enhanced mineralization are increasingly important tools to draw down carbon as well. However, their higher average cost and the current barriers to large-scale commercial deployment mean they can’t be solely relied upon yet. Direct air capture, one of the most discussed forms of engineered removals, is estimated to scale up to 5.5 Mt CO2 per year by 2030; this is more than 700 times today’s DAC capture rate, but less than 10% of the level of deployment needed to get on track with the Net Zero Scenario.
Unlike engineered removals, nature-based solutions are deployable at scale today, with an estimated 7-11 billion tons of sequestration potential per year from forests alone. Nature is a critical tool in our toolkit to mitigate emissions now and bridge the gap until engineered solutions are cost-effective and widely available. Not only is nature a critical tool for us to draw down carbon but investments in protecting nature are critical if we have any chance of staying below 1.5C. In a recent blog post, SBTi referenced the IPCC when they said: “Even if every company adopted and implemented a science-based target, there are no current trajectories for staying below 1.5˚C without protecting the world’s remaining tropical forests.”
A Crisis of Trust
Despite the clear potential of nature-based solutions, many buyers are skeptical of their trustworthiness. In January of 2022, NCX surveyed 250 US-based sustainability leaders from large organizations across several industries with questions on their trust and perceptions of carbon offsets. 62% of respondents trust forest carbon programs while 25% distrust them somewhat. The leading cause of this distrust, according to the survey, is the fear that forest carbon can be easily “gamed,” meaning forests not at risk of harvest or that were already growing without the incentive of carbon finance can still end up being enrolled in a carbon offset program and produce non-additional credits. Cases of this have been highlighted by outlets such as Bloomberg and The Guardian and are often the result of poor baseline predictions.
Increasing Reliability Through Technology
Technology can dispel concerns around forest carbon projects by helping to improve project measurements and design. Remote-sensing and AI have been transformative in doing this, enabling better means of estimating carbon stored in forests, determining the business-as-usual scenario or baseline, and supporting improved monitoring of these carbon offset projects.
NCX’s Basemap forest dataset provides acre-by-acre intelligence on the location, diameter, and species of trees across the continental United States. Basemap is made possible by satellite imagery, climate and biogeography data, field measurements, expert knowledge of forest structure and stand dynamics, and statistical modeling to assess forest composition and structure down to the 30m x 30m level.
NCX combines Basemap data with our baseline harvest probability model to generate an estimate of carbon at risk of harvest for a fine-scale, dynamic approach to additionality. Our baseline approach calculates carbon at risk in part by predicting the likelihood a harvest will occur based on factors such as forest composition, landowner demographics, and local timber prices. We discourage certain forests from being enrolled in our program to ensure the resulting credits are as additional as possible. We are also conducting experiments with other forms of dynamic baselines so we can produce the highest quality nature based solutions possible. Learn how NCX data scientists use an iterative, evidence-based approach to set property-specific baselines in this recorded webinar.
Scaling Forest Carbon Programs
Remote sensing and AI technology are not only key to ensuring trust in forest carbon offsets, but also in scaling the market. Historically, forest carbon programs have relied on ground measurements to measure the carbon on the landscape. Boots on the ground measurements are expensive and result in six figure fees that are often paid by landowners. For a family forest owner with 200 acres, that fee makes participation cost prohibitive, limiting the income generating options from their land to harvesting their trees. AI and remote sensing allow project developers to avoid this costly approach. Remote sensing, combined with shorter-term contracts, open participation to small family landowners who have previously been excluded from the carbon market who were unable to afford the high enrollment fees or sign the multi-decade contracts required in traditional forest carbon programs.
Carbon markets inclusive to small landowners mean massive climate impact. Over 50% of U.S. forestland is owned and managed by private owners. Most of this land is family and individually owned, and the average parcel size is smaller than 25 acres. By opening participation to small landowners, developers are unlocking a greater supply of carbon credits critical to addressing climate change and helping companies meet their net-zero commitments.
Approaches to forest carbon are rapidly evolving, driven by innovations in technology and emerging methodologies that build upon the learnings from the past. Additional investments in innovations in forest carbon are key to not only ensuring trust in the carbon market but also to achieving scalable climate action necessary in this critical decade. Gain more insights into how sustainability decision-makers are approaching forest carbon and other climate investments by reading NCX’s survey of sustainability leaders.
