Verra approves dynamic baseline methodology for forest carbon projects

Verra, the world's largest international carbon registry, approved a first-of-its kind carbon accounting methodology Oct. 26 that forest conservation groups say can improve the credibility of the voluntary carbon market and increase market access for small forest owners.

The accounting methodology, known as dynamic baseline, has been years in the making and is the result of collaboration between The Nature Conservancy, the American Forest Foundation and the carbon offsetting consultancy TerraCarbon. The methodology is eligible for use in any country that maintains a national forest inventory system.

The novelty of dynamic baseline is that it calculates the climate benefits of a nature-based carbon project, like improved forest management or reforestation, by comparing the project's CO2 benefits to a control group, or a group of highly similar but unprotected forest plots. By measuring the differences between the protected and unprotected forests over time, the methodology allows for registries to issue credits based on the impacts of the intervention program.

The American Forest Foundation says that this method allows projects to provide better proof of a project's additionality, or that it's climate benefits wouldn't have happened under a business-as-usual scenario.

The method is an evolution from the way carbon projects have typically been measured. Under a projected baseline approach, impacts of a project's climate benefits are based on a model build on several informed assumptions, then projected out through the lifespan of the project. A shortcoming of the projected baseline methodology is that its modeling can't fully incorporate unpredictable changes, like wildfire, disease or unexpected harvesting.

"The dynamic baseline is updated with new observed data every time we go through a verification event," said Christine Cadigan, senior director of the Family Forest Carbon Program at the American Forest Foundation. "So we're remeasuring the project plots and we're updating the baseline at the same time."

The methodology matches a forest carbon project with a control group by comparing at least 14 variables, including slope of the land, tree species, forest age, soil class and forest density. The methodology pulls these measurements from a robust database maintained by the US Forest Service, which takes a rolling forest census every five years.

Not only does this method allow projects to report climate benefits more accurately, it also is a much less expensive process than the projected baseline methodology, Cadigan said, and thereby lowers the barrier of entry for private, family-owned forests.

"Through developing this methodology, it really turned into a dual-benefit," she said. "It completely removes those costly barriers."

"We feel like this dynamic baseline solves our access problem and helps build on existing methodologies by creating this new robust way of determining baseline," Cadigan said.

Traditionally, forest carbon projects involve properties of around 5,000 acres or greater. According to the National Association of State Foresters, around 39% of US forestland is owned by private non-corporate owners with an average parcel size smaller than 25 acres. Lowering cost barriers could make up to 300 million more acres eligible to participate in, and earn income from, the voluntary carbon market.

"Families and individuals own 39% of America's forest and must be part of the climate solution," The Nature Conservancy CEO Jennifer Morris said. "This new methodology not only makes it easier for these forest owners to join the fight against climate change, but it also ensures transparent, measurable and meaningful carbon reductions."

The Family Forest Carbon program says it is currently enrolling landowners in Maryland, Massachusetts, New York, Pennsylvania, Vermont and West Virginia with plans to expand to additional states next year. The first measurement and verification cycle using the new methodology will begin in 2023.

Platts, part of S&P Global Commodity Insights, assessed the price of Platts CNC — a basket assessment that reflects the most competitive nature-based carbon credit prices — at $6.25/mt CO2e Oct. 26 after reaching a seasonal peak of $9.77/mt CO2e in September, and a 2022 peak of over $16/mt in February.