Direct measurement forest carbon protocol: a commercial system-of-systems to incentivize forest restoration and management

Abstract

Forest carbon sequestration offsets are methodologically uncertain, comprise a minor component of carbon markets and do not effectively slow deforestation. The objective of this study is to describe a commercial scale in situ measurement approach for determination of net forest carbon sequestration projects, the Direct Measurement Forest Carbon Protocol™, to address forest carbon market uncertainties. In contrast to protocols that rely on limited forest mensuration, growth simulation and exclusion of CO2 data, the Direct Measurement Forest Carbon Protocol™ is based on standardized methods for direct determination of net ecosystem exchange (NEE) of CO2 employing eddy covariance, a meteorological approach integrating forest carbon fluxes. NEE is used here as the basis for quantifying the first of its kind carbon financial products. The DMFCP differentiates physical, project and financial carbon within a System-of-Systems™ (SoS) network architecture. SoS sensor nodes, the Global Monitoring Platform™ (GMP), housing analyzers for CO2 isotopologues (e.g., 12CO2,13CO2, 14CO2) and greenhouse gases are deployed across the project landscape. The SoS standardizes and automates GMP measurement, uncertainty and reporting functions creating diverse forest carbon portfolios while reducing cost and investment risk in alignment with modern portfolio theory. To illustrate SoS field deployment and operation, published annual NEE data for a tropical (Ankasa Park, Ghana, Africa) and a deciduous forest (Harvard Forest, Petersham, MA, USA) are used to forecast carbon revenue. Carbon pricing scenarios are combined with historical in situ NEE annual time-series to extrapolate pre-tax revenue for each project applied to 100,000 acres (40,469 hectares) of surrounding land. Based on carbon pricing of $5 to $36 per ton CO2 equivalent (tCO2eq) and observed NEE sequestration rates of 0.48 to 15.60 tCO2eq acre−1 yr−1, pre-tax cash flows ranging from $230,000 to $16,380,000 across project time-series are calculated, up to 5× revenue for contemporary voluntary offsets, demonstrating new economic incentives to reverse deforestation. The SoS concept of operation and architecture, with engineering development, can be extended to diverse gas species across terrestrial, aquatic and oceanic ecosystems, harmonizing voluntary and compliance market products worldwide to assist in the management of global warming. The Direct Measurement Forest Carbon Protocol reduces risk of invalidation intrinsic to estimation-based protocols such as the Climate Action Reserve and the Clean Development Mechanism that do not observe molecular CO2 to calibrate financial products. Multinational policy applications such as the Paris Agreement and the United Nations Reducing Emissions from Deforestation and Degradation, constrained by Kyoto Protocol era processes, will benefit from NEE measurement avoiding unsupported claims of emission reduction, fraud, and forest conservation policy failure.

Science to Commerce: A Commercial-Scale Protocol for Carbon Trading Applied to a 28-Year Record of Forest Carbon Monitoring at the Harvard Forest

“…Relying upon the NEE methodology, forest carbon protocols that exclude CO 2 data for R eco would result in a project error (1992 to 2019) of~466% given that R eco represents~45% of NEE and cannot be excluded from a full net forest carbon accounting for financial products and trading [4]. As a result, forest carbon model based determinations of sequestered carbon are likely more uncertain as proxy data cannot be validated without independent direct measurement [5]. The level of uncertainty for model based commercial products results in discount pricing observed, for example, in 2019, by forest voluntary carbon offsets priced typically < $1.67 USD for the highest volume of offsets under the Verified Carbon Standard [9].…”

“…The level of uncertainty for model based commercial products results in discount pricing observed, for example, in 2019, by forest voluntary carbon offsets priced typically < $1.67 USD for the highest volume of offsets under the Verified Carbon Standard [9]. Direct measurement of NEE CO 2 , as described in this study, provides a harmonized and equivalent pricing basis for voluntary and compliance pricing [5].…”

“…The financial scope of NEE revenue illustrated by projection is the counterpart to scientific data bridging the gap between science and commerce and is justifiable for this purpose. Eddy covariance up-scaling including the use of EC networks in the context of a direct measurement forest carbon protocol have been described previously [5,58]. Up-scaling of the US-Ha1 NEE results from the tower footprint to surrounding areas would require additional EC platforms to cover gaps, ecological analysis, remotely sensed data and the use of scale-aware models that are beyond the scope of this study [59][60][61][62][63][64][65][66].…”

“…Forest carbon net ecosystem exchange (NEE) for US-Ha1 employing eddy covariance (EC) for direct in situ CO 2 measurement for research purposes has been reported [1][2][3][4][5][6]. An objective of this study focuses on the requirements for implementing and validating a commercial protocol for net forest carbon storage products suitable for financial market transactions, requirements that have not been elucidated.…”

“…Price differentials for carbon offsets, however, are based on similar estimation-based protocols that exclude CO 2 precluding equitable and justifiable fundamental prices on forest carbon. Direct measurement and verification of GHG's across forest project sites would fundamentally improve trading and pricing transactions while harmonizing GHG markets across trading platforms [5], another objective of this study. Improved forest carbon protocols will benefit local-to-global forest management projects [13] and diverse landowners including Indigenous People [14] and land subject to continued deforestation of~4.7 million hectares per year in 2010-2020 [15].…”