The Darkwoods Forest Carbon Project is an improved forest management project in British Columbia developed in 2008 to reduce GHG emissions from logging. The project is an instructive case study for understanding forest-based carbon projects, the role of verification, and the voluntary offsets market.
The project area is approximately 52,430 hectares of forested land within a total property area of 54,800 hectares. It is located on the west side of Kootenay Lake, around the Canada-USA border. A co-benefit of the project is the protection of several endangered species, including grizzly bear, wolverine, bull trout, western skink, and western screech owl. Before the carbon project, the project area was owned and managed by Pluto Darkwoods Corporation since 1967. The project activity began after the acquisition of the property in 2008 by the Nature Conservancy Canada (NCC).
The Nature Conservancy is a private, non-profit organisation with a global presence and partnerships focussed on conservation. Founded in 1962 in Canada, the organisation facilitates the conservation of millions of hectares of land and is the leading conservation-focused organisation in Canada. In addition to the Darkwoods Forest Carbon Project, the Nature Conservancy Canada also supports projects in every province in Canada.
Validation Under Verification Standards
Other actors involved in the Darkwoods Forest Carbon Project include 3GreenTree Ecosystems Services Limited, acquired in 2023 by ClimeCo, and ERA Ecosystem Restoration Associates Incorporated as project developers.
The Darkwood project is currently validated under Verra’s Verified Carbon Standard (VCS) and is estimated to reduce 124,847 tonnes of CO2 per annum over a crediting period of 100 years from 2008 to 2108. It is also validated under the Climate, Community, and Biodiversity (CCB) standard and is North America’s first project to have been validated under the Sustainable Development Verified Impact (SD Vista) standard. The CCB and SD Vista standards ensure that carbon projects, in addition to climate mitigation outcomes, contribute to community benefits, biodiversity conservation, and other sustainable development goals. However, unlike the CCB standard, which can only be used alongside the VCS, the SD Vista standard has a different framework for project impact verification. This triple validation under different standards (VCS, CCB, and SD Vista) makes the Darkwood Forest Carbon Project unique, signifying its commitment to other social and ecological outcomes. This additional commitment ensures that credits generated from the project are more attractive to buyers with values beyond climate change mitigation.
In 2011, the project was awarded the Land Award in the non-profit sector by the Real Estate Foundation of British Columbia.
Darkwoods Forest Carbon Project: Project Methodology and Activities
The Darkwoods Forest Carbon Project was validated following Verra’s VM0012 methodology for Improved Forest Management (IFM) in Temperate and Boreal Forests. IFM is defined as (Roche (2024)) involving delayed timber harvesting through extended timber rotation cycles that selectively harvest trees and reduce logging impact. This is a different approach than the concept of protecting existing forests currently practiced by the Darkwoods Forest Carbon Project following the VM0012 methodology. The latter aligns with the UN-REDD’s broader definition of IFM as ‘forest management activities which result in increased carbon stocks within forests and/or reduce GHG emissions from forestry activities when compared to business-as-usual forestry practices.’
The VM0012 methodology was developed by 3GreenTree Ecosystems Services Limited and ERA Ecosystem Restoration Associates Incorporated and became active in 2012, with the latest update in July 2013. The VM0012 methodology focuses on quantifying emissions reductions that occur with a shift from logging to protecting forests, particularly in temperate and boreal forests. The methodology also focuses on aboveground trees and belowground biomass as major carbon pools. Examples of projects designed following the same methodology include the Salvador Climate Action Initiative in Canada, the Jinghai Leachate Anaerobic Biogas Utilisation Project in China, the Westphalen Forest Carbon Project in Germany, and the King County Rural Forest Carbon Project in the United States.
The baseline scenario in the Darkwood Forest Carbon Project area before 2008 involved a traditional practice of annually harvesting approximately 57,000 m3 of trees in the area – a value reportedly below the timber capacity of the forest. However, at the time of acquiring the land, there were other possible yet unsustainable baseline scenarios from other interested bidders. These scenarios include acquisition for conversion to real estate land, acquisition by a market-driven acquirer interested in continued logging, and acquisition for a sustained yield harvesting regime. Also, the cost of acquiring the land was around C$50,000,000, while operating costs, including registration, project management, and other financial costs, were estimated at C$380,000 per annum. These scenarios and costs imply that funds from the carbon credit were the only feasible incentive and approach to recover investments while ensuring emissions stay reduced in the project area, as reported by the project developers. This also explains the project’s additionality, that is, in the absence of carbon finance, the business-as-usual scenario will continue, and climate mitigation benefits will not be achieved. Therefore, to ensure the smooth running of the project, an assigned project manager and an NCC onsite supervisor were engaged to regularly monitor the area and quantify carbon credits before third-party verification is conducted every 3 years.
Darkwoods Forest Carbon Project: Successes
Since its development in 2008, the Darkwoods Forest Carbon project has undergone registration and validation under the relevant Verra standards. Following its successful validation in 2011, the project went through five verification cycles (2008–2010, 2011–2012, 2013–2016, 2017–2019, and 2020 – 2021). These different third-party auditors have certified the project’s emissions reduction from avoiding logging. The project has also contributed to the United Nations’ sustainable development goals while achieving benefits in addition to its primary objective of climate change mitigation.
- Emissions Reduction: The Darkwoods Forest Carbon Project, as of the latest verification period of 2020 – 2021 (based on Verra), generated approximately 4,969,894tCO2e through its forest conservation strategy. Approximately 429,000tCO2e remains unsold in the project buffer pool. The buffer pool is a safeguard similar to an insurance policy. The carbon credits reserved in the buffer pool ensure that the project still contributes to emissions reduction in the event of a reversal in emissions reduction, e.g., an unplanned fire event. In the case of the Darkwoods project, a natural forest fire incident in 2021 affected around 4,400 hectares of the project area, resulting in an estimated loss of 235,045 tCO2e. The fire was classified as a loss event because it was greater than 5% of previously verified emissions reduction but had already been accounted for in baseline and project emissions reduction calculations (buffer pool). As of 2011, the Nature Conservancy had generated over C$4,000,000 from the sale of the quantified and verified carbon credits to Pacific Carbon Trust, a British Columbia government-owned corporation set up to ‘deliver quality made-in-British Columbia greenhouse gas offsets.’
- Additional project benefits: The project also yielded several additional benefits relating to forest biomass, water, and biodiversity. For instance, the project employed 138 people and contributed to conserving 3 International Union for Conservation of Nature’s (IUCN) red-listed species and 15 significant species at risk in the project area. According to the project’s 2017–2019 CCB verification report, some of these species included: grizzly bear – threatened, wolverine – near threatened, and Bull Trout – vulnerable. The net impact of the project on natural capital and ecosystem services in the area was positive. With an estimated $19,000,000 generated from the sale of carbon credits as of December 2021, the project surpassed the baseline economic opportunity of $13,000,000 from timber harvests.
Darkwoods Forest Carbon Project: Challenges
Despite generating significant carbon offsets over nearly two decades, the Darkwoods project faced challenges. In 2013, the project’s additionality was questioned following the British Columbia Auditor General’s criticism of the project. This controversy also raised questions about the power dynamics between the government and the standards that regulate similar projects.
Inaccurate estimation of carbon offset: van Kooten et al (2014) identified several indicators of Darkwood’s overestimation of carbon credits generated throughout the project lifetime. For instance, the project’s emission reduction estimates did not factor in the fact that harvested forests can be replaced by genetically improved tree varieties that capture carbon more quickly. However, van Kooten et al (2014) adds that this also poses a risk to the model of carbon projects if landowners decide to cut down trees sooner or in a baseline (before project) scenario so that they can earn carbon credits sooner from new, faster-growing trees that can capture carbon faster. The project also ignored increased emissions from using materials like steel and concrete as wood substitutes in the absence of logging and the unavailability/scarcity of timber. Inaccurate estimation of carbon offsets risks eroding trust in the carbon market, and abuse of carbon funds, especially when project actors are more incentivised by financial returns over climate change mitigation benefits. In response to controversies in 2013, Nature Conservancy Canada reinstated its commitment to adhering to standard requirements in the implementation of the project.
Rent-seeking tendencies of brokers: In 2011, the Nature Conservancy Canada sold about 700,000tCO2e at $5.75/tCO2 (van Kooten et al., 2014). However, Pacific Carbon Trust, the buyers at the time, reportedly sold the same carbon credits to a different group of buyers at a higher rate of $25/tCO2. Rent-seeking is a common act among third-party buyers or brokers in the voluntary carbon market given the lack of transparency and unavailability of market transaction data. According to van Kooten et al. (2014), rent-seeking can potentially cheat project proponents out of the benefits that should incentivise project implementation and climate change mitigation. It also has the potential to reinforce inequalities since well-funded, larger third-party agents benefit more. Therefore, van Kooten et al. (2024) proposed excluding resellers from the carbon credit trade. Climate Watch (2023) recommends that carbon credit buyers make information about their fees and markups publicly available, while project proponents sell credits only to organisations with this information made publicly available. They also recommend stiffer industry standards that ensure transparency in carbon trade.
Conclusion
The Darkwoods Forest Carbon Project is an instructive case study for understanding the complexities of forest-based carbon projects. While the project showcases the potential of leveraging climate finance to support large-scale conservation efforts, it also highlights significant concerns regarding additionality, verification standards, and financial transparency. Despite the property’s acquisition for conservation, the project’s reliance on plausible logging as a baseline scenario exposes the limitations of current methodologies in fully capturing genuine climate benefits. The involvement of third-party buyers of carbon credits underscores the risk of rent-seeking behaviour that can divert climate finance from its primary objective of climate change adaptation and mitigation. As the voluntary carbon market continues to evolve, these systemic issues need to be addressed to ensure the credibility and effectiveness of carbon offset projects. Implementing robust regulatory frameworks and enhancing transparency are needed to achieve real, equitable, and lasting environmental gains.
References
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