SOPHIE BUSHWICK: This is Science Friday. I’m Sophie Bushwick. California has a reputation as the state that’s doing the most to combat climate change, and the linchpin of those efforts is California’s Cap-and-Trade program, where the state’s biggest polluters, ExxonMobil, BP Oil, and others, are required to offset their carbon dioxide emissions. They do this by investing in strategies that mitigate climate change.

But according to a recent investigation by ProPublica and others, this climate solution is actually adding millions of tons of CO2 to the atmosphere. How? Through a loophole in the state’s forest offset program, which seeks to reduce carbon emissions by preserving trees. My next guest is Lisa Song, a ProPublica reporter who broke this story with MIT Technology Review and with help from CarbonPlan, a nonprofit that analyzes the scientific integrity of carbon removal efforts. Lisa, welcome to Science Friday.

LISA SONG: Hi. Thanks for having me.

SOPHIE BUSHWICK: Before we talk about your article, for those who aren’t familiar, what is California’s forest offset program and why was it established?

LISA SONG: Sure. So the carbon offset program is part of California’s Cap-and-Trade program, and it is there to help major polluters find other ways to reduce emissions. So under cap and trade, these large polluters have to buy permits that allow them to emit CO2. And they can get those permits from the state, or they can buy them from other polluters, who have some to spare.

But something else that they can do is to pay for offsets, which means they’re paying somebody else somewhere in the country to reduce their CO2 emissions, and then that polluter gets to claim those reductions as their own. So the whole idea of these forest carbon offsets is there are landowners around the country who sign up to join the program, and they promise to keep their trees standing instead of cutting them down as they would have. And then you calculate how many tons of CO2 you’re preventing from going up into the air. And those get converted to carbon credits, which the polluters in California can claim.

SOPHIE BUSHWICK: And this program is far from perfect, but your article explains exactly why. Tell us who you teamed up with and what you found.

LISA SONG: Sure. So I reported the story with James Temple at MIT Technology Review, and we were reporting on a study from the nonprofit CarbonPlan. It’s a very complicated study that looks in detail at a flaw in the rules behind the forest offset program. And just for context, this part of California’s offset program, the forestry offsets, there have been prior studies criticizing how the program was designed and various aspects of the program.

But this study by CarbonPlan is looking at a brand new flaw that nobody else had written about before. And the way the law works is, once you’ve picked the forest that will be enrolled in the offsets program, you go ahead and you do a survey of the trees to figure out how much carbon is stored in the forest, how much carbon per acre. And then you look at the amount of carbon per acre stored in a typical forest of that type, and then you take the difference. So if my offset forest has 200 tons of carbon per acre but a typical forest of this type would have 80 tons per acre, then I win something like 120 tons of carbon per acre for my project.

The issue is who gets to set what a typical forest looks like and how much carbon is in a typical forest. That is defined by the California Air Resources Board, and the regulator sets those numbers. And what the study was pointing out is that those numbers were calculated from coarse data that didn’t take into account a lot of nuances. And so they were allowing people who were running offsets to selectively choose to put offsets in forests where the trees held a lot more carbon than what’s in a typical forest. And the result was you end up inflating the carbon savings generated, and you get a bunch of carbon credits that aren’t actually helping the climate.

SOPHIE BUSHWICK: Can you give an example of what that might look like, what type of forested area might be exploited in that way?

LISA SONG: Yeah, so one example we had was an offset project in Alaska, where the forest enrolled in the offsets program consisted almost entirely of giant Sitka spruce trees. These are really big trees that store a ton of carbon. But the local regional average was calculated from a wide mix of trees, and a much smaller percentage of which were these Sitka spruces.

So if you look at the trees that went into the regional average, it had a lot of smaller tree species like cottonwoods that store far less carbon. And the whole point of these regional averages is the trees that go into calculating a regional average should resemble the types of trees in your project. But because the data behind the regional averages were so coarse, it allows landowners and project developers to selectively pick offset project sites where the trees are totally different types of trees and have a ton more carbon, and that skews the results.

SOPHIE BUSHWICK: So if they’d wanted this to be more honest, they should have been comparing this stand, say, of Sitka spruce to a forest of Sitka spruces. And instead, they were comparing it to a forest of a lot of small trees with just a few spruces in it.

LISA SONG: Basically, yes. And so the way that the CarbonPlan folks did their research was they recalculated what they believe is a more reasonable regional average for each of these projects. And they did that by choosing to get data from tree species that better resemble the actual types of trees in each project. And in each case, they recalculated that new regional average and said, if the data were more honest, this is how many credits this project actually would earn. And in most of the cases, they found that the projects would and should earn a lot fewer credits than they actually did.

SOPHIE BUSHWICK: So the loophole here seems to lie in the way the forests are chosen for the forest offset program and the fact that this lets people select the areas they want to maximize the amount of credit they can get.

LISA SONG: Right. Just to be clear, the study itself couldn’t prove that any particular person deliberately gamed the system or cherry picked the exact site of their project. But what the study found was that, overall, the pattern shows that so many projects were in areas where the trees had way more carbon than the types of trees in the regional average, that, overall, some people definitely were deliberately choosing where to put their projects in the most advantageous areas.

And it’s important to note that nobody broke the rules by doing this. The rules allow you to do this. And so the problem isn’t that anybody broke a law. The problem is that the rules are constructed in a way that lets people take advantage of the system.

SOPHIE BUSHWICK: And I’d like to know a little bit more about the developer’s role in this transaction. From what I read in your article, they seem to function as kind of the middleman between the California Air Resources Board, which is setting the rules, and the forest property owner.

LISA SONG: Right. So project developers are professionals who make their living by developing new offset projects. And what they will do is they will go around, and, if there is some forest that they think would make a good offset project, they would go find the landowner and approach the landowner and basically say, if you pay me, then I will do all the paperwork for you, do all the survey work, hire the contractors, and handle all the logistics of turning your forest into an offset project.

And at the end of the day, the developers are often paid as a fraction of the credits earned. So once the project is all done and polluters start buying credits from the offsets, they might– the project itself may generate millions of dollars. And perhaps, the developer would take a 25% cut or something, and the rest of the money would go to the landowner.

So one of the things we wanted to make clear in our story was that it’s likely that some of the landowners don’t really understand the rules and don’t understand how the system can be gamed. So it’s possible, as a landowner, to benefit from the overcrediting of your project even if you don’t understand how it was done or even if you don’t really understand the rules. But the project developers are the people who really understand the rules, so it would be hard to believe that project developers don’t understand how this kind of cherry picking could happen.

SOPHIE BUSHWICK: It just seems ironic that there’s all these strict rules and all this paperwork to calculate the carbon stored in an individual landowner’s forest, but, at the same time, the data that these calculations are based on is too granular. It’s not strict enough.

LISA SONG: Yeah. It’s a funny disconnect that the rules themselves are so complicated and there are various steps along the way where you’re double checking your calculations and everything but these regional average numbers are really at the foundation of this entire California system. And the raw data themselves come from the US Forrest Service. There is this regular survey that the US Forrest Service does of all representative forests in the country. And what the Air Resources Board was they took that raw data, and they generalized a lot of it in groups or buckets. So they would take a large geographic area across northern California and average the carbon stored in all the trees there as one type of regional average. And it’s that aggregation of the raw data that introduces these opportunities for error and inflated credits.

SOPHIE BUSHWICK: Is there a solution for fixing that? I mean, could, possibly, the Forrest Service or the California Air Resources Board take, say, CarbonPlan’s method of calculating stored carbon and use that instead?

LISA SONG: Yeah. That is possible. It is entirely within the Air Resources Board’s power and authority to change the rules underlying these calculations. What CarbonPlan did in their study was they offered one alternative method of recalculating the regional averages and doing it in a way that’s more accurate. It is not the only possible way that you could recalculate these numbers, but it does offer a blueprint for what the Air Resources Board could do if they chose to.

SOPHIE BUSHWICK: And what did the Air Resources Board say when you reached out to them about this?

LISA SONG: They did not agree with CarbonPlan’s study. We did send the Air Resources Board the study weeks before publication. We also sent them a lot of questions and offer to talk on the phone for months beforehand. Basically, the Board disagrees that anything was wrong with their rules, and they don’t agree with the conclusions of the study.

SOPHIE BUSHWICK: I’d like to pivot a little bit to some other issues with forest offsets. You wrote a follow-up piece, highlighting how the Massachusetts Audubon Society is enrolled in California’s program. And that’s a little odd because they are a forest conservation organization.

LISA SONG: So this issue here is actually a universal struggle with all offset programs because, fundamentally, in order for a carbon offset program to work, the program has to cause carbon savings that wouldn’t have happened otherwise. So the existence of these carbon offsets must cause the landowner to change their behavior. That means, if you own a bunch of forest and you plan to cut it down and make money from selling timber but, suddenly, you decide to save the trees because you sign up for an offset program and so you’re going to earn money through offsets instead, then that’s good. You have been forced to change your behavior, and all of that new carbon saving you’re doing is real and additional to what would have happened otherwise.

But if you are never going to cut down the trees and suddenly you’re being paid to preserve the trees you would have preserved anyway, then it doesn’t actually help the climate in any case. Those trees were never in danger. And in this situation, Mass Audubon said in its paperwork that it could have cut down a lot of its trees and seriously depleted the carbon stored in its forest. And now, with the carbon offset program, they enrolled about 9,700 acres of its land and would keep all the trees standing.

The problem is it’s hard to believe that a major conservation group would have really cut down so many trees. In other words, it’s hard to believe that those trees were really at risk. Again, this is a situation where the landowner followed all of the rules. The rules, as written by the Air Resources Board, doesn’t require you to state, you would have cut everything down. It just requires you to state that you could have cut down those trees.

SOPHIE BUSHWICK: I’m Sophie Bushwick, and this is Science Friday from WNYC Studios. So do you place any blame with Mass Audubon? Or is the issue more about the rules?

LISA SONG: The fundamental issue here is the rules and the way the Air Resources Board has set the rules. Mass Audubon certainly was following the rules, but Mass Audubon is also staffed by a bunch of smart people who understand science and understand climate change. So at some level, they should have been familiar with the many discussions around these issues in forest-related offsets because this is an issue that’s come up again and again in other forest related offsets long before California had its system.

SOPHIE BUSHWICK: Can the forest offset program be fixed? Or do you think that there’s something fundamentally broken about the way it was built, that fixing it would just mean starting all over again?

LISA SONG: I don’t know that I can speak to every problem with the forest offset program. On this particular issue of those regional average calculations, that is something that can definitely be changed in the rules if the regulators want to. Other people have criticized this forest offset program for issues like how it judges whether someone would have cut down the trees. There’s also another issue of, if you protect the forest in one area, won’t people just log the trees somewhere else? And so you’re not giving a net benefit to the climate. I think some of those other issues can be pretty challenging, and I just don’t know enough to say how easily they could be fixed.

SOPHIE BUSHWICK: We have to leave it there. Thank you so much for joining us today.

LISA SONG: Thanks for having me.

SOPHIE BUSHWICK: Lisa Song is a reporter for ProPublica. When we reached out to Mass Audubon about this story, they offered us a statement, which reads in part, we chose California’s market over many other voluntary programs because it was one of the first regulated compulsory economy-wide programs that put a price on carbon emissions from large industrial sources and power generators. By committing ourselves to managing 10,000 acres of forest explicitly for carbon storage for 100 years, we are confident that by century’s end our participation in this market will result in substantial additional benefit to the climate. You can read their full statement up on our website at ScienceFriday.com.

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