We want to thank John Oliver and his viewers for putting NCX’s model to the test. While we normally get a robust 200 to 400 signups in a week from landowners interested in enrolling their forests in the fight against climate change, after being featured on Last Week Tonight we received over 2,000 in the following week! In this article, we’ll highlight the landowner enrollment review system our team of experts uses to help maintain the integrity of our carbon credits, and show how it did in sorting out the real from the fake during the post Last Week Tonight surge.
It all started with a segment where Mr. Oliver questioned the integrity of carbon offsets, and got plenty right but also key details wrong. During that segment, he mentioned NCX and joked about our annual contracts being comparable to “holding your breath for 15 seconds”. First of all, we disagree strongly with that characterization. By offering annual contracts, we enable many smaller landowners who can’t forecast 100 years into the future to participate and conserve their forests one year at a time. Second, the accessibility and flexibility of our program are features designed specifically to overcome many of the flaws that he discussed, and we uphold a rigorous vetting process to ensure the highest quality carbon offset credits.
Before we dive into more details on that process, let’s talk about why we don’t just accept any property. NCX combats climate change by running forest harvest deferral programs. This means we produce carbon credits by enabling climate committed companies to pay landowners to defer harvest of their forests for one year or longer. This keeps more carbon stored in the forest for longer periods of time, while enhancing that forest’s ability to remove even more carbon from the atmosphere. Ensuring that landowners we enroll have a high probability of harvesting in the next year is critical to demonstrating the additionality, or real impact, of our carbon offsets. We want to enroll as many qualified landowners as possible, since the greatest climate impact comes from allowing as many forests as possible to continue to mature and store more carbon. But, we also need to know we’re actually changing harvest behavior, and not just allowing people to get paid for not cutting down trees that they never had any intention of cutting down. It’s a delicate balance, and the eligibility process is our first line of defense.
So, what are the eligibility checks we actually perform when a landowner requests what we call an Eligibility Report? There’s many, but they fit into five main categories:
- Is this a forest?: Is the submitted property actually a forest, not a handful of apple trees in a suburban backyard, or worse, an empty lawn or golf course? (One request following Last Week Tonight read simply, “i have twenty trees i will leave alone – interested”. It obviously did not make it through review!)
- Restrictions: Are there any legal restrictions to timber harvesting, such as an existing forever-wild conservation easement?
- Accessibility: Can the property be accessed for harvest, or does an incredibly steep slope or an intervening canyon between it and the nearest road prevent that from occurring?
- Profitability: If the property was available for harvest, would it be worthwhile to do so based upon the forest characteristics such as age, tree species (even 10 acres of mature apple trees wouldn’t be harvested for timber), and local timber market conditions, or is too low value and/or too far from a mill to be profitable?
- Ownership: Does the person requesting an Eligibility Report own the property, or otherwise represent the owners? In typical cycles, we perform ownership checks on a statistical subsample of total requests. Given the volume of reports requested in the week after the Last Week Tonight segment, we will be taking an extra close look.
A property must pass all of these checks before we enroll it in our program. This is in addition to the standard industry practice of signing a document that indicates their harvest intentions. This assessment process is effective but it isn’t infallible, so we’re always looking to improve upon it. We are also investing in additional quality guards, such as improving our ability to predict landowner harvest behavior within the next year. After all, simply being “eligible” to harvest isn’t a guarantee that someone will. Having multiple layers of defense means we can rely on data to uphold the additionality of our program, rather than simple assumptions.
With that in mind, let’s look at how our system handled inbound requests in the time leading up to and following the airing of the Last Week Tonight segment:
This graph shows the total Eligibility Report requests we received by assessment cycle (left) and the number of these that were deemed ineligible (right). August 25 was the week after the Last Week Tonight segment aired. Along with the spike in total requests we mentioned, there was also a huge increase in the number of requests that were deemed ineligible. We rejected about 900 (40% of total) requests that week, a tenfold increase from our typical rejection rate of around 4%. These properties would not have sequestered additional carbon, and our assessment process blocked them from tainting the quality of our credit supply.
Now let’s take a closer look at the breakdown of ineligible reports following the Last Week Tonight segment. As you can see, most of them were rejected because they either aren’t considered forest by the definition we use, or because Basemap, our satellite-imagery model of all the trees in the US, predicted too little forest carbon to generate annual harvest deferral credits. Sorry, John Oliver fans – you can’t generate carbon credits from your lawn! We only sell carbon credits that represent real climate impact from deferred harvest of real trees in real forests owned by real forest landowners. Most of the remaining requests were rejected because we predicted that the timber was unlikely to be brought to market, and a couple were rejected because they were already protected by existing conservation easements, meaning they were never in any danger of harvest to start with.
So why are so many fewer requests rejected normally, when there’s not a huge surge of traffic from John Oliver? Our Landowner Support team at NCX does a great job of actively recruiting landowners who are a good fit for our program. Many landowners also come to us via ongoing relationships with consulting foresters who use their expertise to steer the right properties our way. The week following the John Oliver segment included an unprecedented number of unsolicited ER requests. We would expect a much higher rejection rate, and we’re pleased to see our evaluation process passed this test.
We’re excited by the additional interest in our program, and the critical conversation around quality in forest carbon offsets in general. We recognize that there are many shortcomings in the forest carbon offset industry, and we’ve seen these problems first hand. We care about getting this right – to the point of discouraging landowners from enrolling if their land isn’t a good fit for creating high quality carbon credits with NCX. For more on this approach, you can read “why the NCX forest carbon program may not be a good fit for your land”.