Emissions trading

Incentive

Algorithm

Composite number

Ecology

Biology

Agroforestry

Microeconomics

Economics

Computer science

Climate change mitigation

Carbon fibers

Carbon offset

Business

Offset (computer science)

Greenhouse gas

Climate change

Environmental resource management

Environmental science

Carbon market

Carbon credit

Programming language

Natural resource economics

Carbon dioxide

Carbon sequestration

Global Change Biology

Carbon offsets are widely used by individuals, corporations, and governments to mitigate their greenhouse gas emissions on the assumption that offsets reflect equivalent climate benefits achieved elsewhere. These climate-equivalence claims depend on offsets providing real and additional climate benefits beyond what would have happened, counterfactually, without the offsets project. Here, we evaluate the design of California's prominent forest carbon offsets program and demonstrate that its climate-equivalence claims fall far short on the basis of directly observable evidence. By design, California's program awards large volumes of offset credits to forest projects with carbon stocks that exceed regional averages. This paradigm allows for adverse selection, which could occur if project developers preferentially select forests that are ecologically distinct from unrepresentative regional averages. By digitizing and analyzing comprehensive offset project records alongside detailed forest inventory data, we provide direct evidence that comparing projects against coarse regional carbon averages has led to systematic over-crediting of 30.0 million tCO2 e (90% CI: 20.5-38.6 million tCO2 e) or 29.4% of the credits we analyzed (90% CI: 20.1%-37.8%). These excess credits are worth an estimated $410 million (90% CI: $280-$528 million) at recent market prices. Rather than improve forest management to store additional carbon, California's forest offsets program creates incentives to generate offset credits that do not reflect real climate benefits.

Systematic over‐crediting in California's forest carbon offsets program