Testing the Effectiveness of Carbon Sequestration Credits on the Retention of Timberland Area

Carbon sequestration credits (CSCs) have increased in popularity as a tool to offset carbon emissions for large corporations. However, it is unclear if forest CSCs achieve the goal of increasing forest area retention, or if they simply generate revenue for timberland landowners for forest they were planning to leave unharvested, even in the absence of carbon credits. While previous studies have analyzed the monetary incentives related to the issuance of forest CSCs, little research has been conducted in regards to how CSCs affect timberland area over time. Using state-level timberland estimates from the U.S. Forest Service and carbon credit data from the California Air Resource Board, we study the effects of CSCs on the change in state timberland acreage from 2004 to 2017. We find that more CSCs issued within a state do not lead to greater retention of timberland area within that state, suggesting that forest CSCs do not achieve their goal of offsetting carbon emissions elsewhere.