The benchmark forestry carbon offset standard for California's state government is getting ready to go national.

That benchmark is the Climate Action Reserve, the Los Angeles-based nonprofit group that has developed standards for carbon offsets – the reduction in greenhouse gas emissions that can come from preserving or regrowing forests, among other carbon reduction projects.

CAR's rules for measuring and managing such offsets have been cited as a potential standard for the carbon cap-and-trade plan that's now part of the climate and energy bill being debated in Congress (see House Energy Bill: Cap-and-Trade Included and EPA Proposes Rule to Collect More Greenhouse-Gas Emissions).

Last week, CAR's board of directors voted to approve a new version of its Forest Project Protocol that can apply to nationwide projects, CarbonPositive reported.

So far, CAR's protocol has been applied to projects within California's borders, including Northern California utility Pacific Gas & Electric's ClimateSmart program (see Have Carbon Credits for Sale? Talk to PG&E).

Right now, CAR manages voluntary carbon offset trading, a small but growing market. Other voluntary exchanges include the Chicago Climate Exchange and World Energy (see A Shopping Mall for Carbon Credits). 

Those voluntary markets are mainly being driven by corporations seeking to reduce their carbon footprints and make good on promises to run in a more eco-friendly fashion (see Carbon Accounting: It's All About Appearances).

But measuring forestry-based carbon reductions is a tricky business, compared to measuring reductions in carbon dioxide from measurable sources like factories and power plants.

The challenge, in a nutshell, is to avoid giving away carbon credits for trees that their owners didn't plan to cut down or replant anyway, but rather, to make sure any approved project provides additional benefits outside the business-as-usual scenario.

CarbonPositive noted that the Chicago Climate Exchange (CCX) has been criticized for having weak rules for measuring such "additionality" in carbon offsets it manages.

CAR, on the other hand, has been criticized for setting its benchmarks too high, which could reduce the financial incentives for forest owners to preserve trees, CarbonPositive noted.

It's certain that interested parties will be closely watching how cap-and-trade rules being developed in Congress will apply to forestry projects.

Europe has had a cap-and-trade system in place since 2005, and carbon trading in that system stood at about $100 billion last year, according to Scott Nissenbaum, president of forestry carbon offset startup Finite Carbon. But forestry-based carbon offsets have made up only a tiny fraction of that market, he said. (see Finite Carbon, Forest Carbon Credit Specialist, Opens Shop).

In North America, mandatory markets like the Regional Greenhouse Gas Initiative in the Northeastern U.S. or The Western Climate Initiative being set up by seven western states and four Canadian provinces are underway as well, and states are coming up with their own plans (see Green Light post).

But a nationwide carbon cap-and-trade regime would doubtless grow to dwarf the voluntary and regional markets now in place. That could lead international carbon markets, which stood at $118 billion at the end of last year, to grow to as much as $500 billion by 2012, according to New Carbon Finance.

Given that forestry could account for up to a quarter of the world's man-made greenhouse gas emissions, it's likely that the industry will see increasing scrutiny, whether in carbon reduction plans now being debated in Congress or in those to be developed at December's United Nations talks in Copenhagen to replace the Kyoto Protocol (see The Copenhagen Call: Biz Leaders Back GHG Reduction Efforts).

In fact, reforestation was cited by the Royal Society as one of the key "geoengineering" projects that may have to be undertaken on a vast scale to combat global warming (see Geoengineering May Be Mandatory, Royal Society Says).

Image via Giampaolo Macorig / Creative Commons