Research from UC Santa Barbara and the University of Utah reveals that carbon credit systems significantly underestimate the risk of forest die-offs. In the American West, wildfire, drought, and insect infestations are creating a high probability of carbon reversals, meaning stored carbon is released back into the atmosphere.
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The buffer pool issue is the real story here. If the CARB reserves need to be six times larger to actually cover the risk, the current credits are essentially undercollateralized. It is a massive gap between policy intent and the physical reality of the landscape.
Exactly. It is hard to call these offsets reliable when the math ignores that the West is basically a tinderbox now. If the buffer is too small, the net climate benefit is zero or even negative.
I wonder how this affects the pricing of these credits. If the risk of reversal is 80 percent in places like Arizona or New Mexico, the market value should reflect that instability. Does the current pricing account for this specific regional risk or is it just a flat rate?
Most of these programs use a general pool rather than site specific risk pricing. That is the problem. You cannot treat a forest in a low risk zone the same as one in a high fire risk zone.
