Additionality and permanence standards in California's Forest Offset Protocol: A review of project and program level implications

A key component of California's cap-and-trade program is the use of carbon offsets as compliance instruments for reducing statewide GHG emissions. Under this program, offsets are tradable credits representing real, verifiable, quantifiable, enforceable, permanent, and additional reductions or removals of GHG emissions. This paper focuses on the permanence and additionality standards for offset credits as defined and operationalized in California's Compliance Offset Protocol for U.S. Forest Projects. Drawing on a review of the protocol, interviews, current offset projects, and existing literature, we discuss how additionality and permanence standards relate to project participation and overall program effectiveness. Specifically, we provide an overview of offset credits as compliance instruments in California's cap-and-trade program, the timeline for a forest offset project, and the factors shaping participation in offset projects. We then discuss the implications of permanence and additionality at both the project and program levels. Largely consistent with previous work, we find that stringent standards for permanent and additional project activities can present barriers to participation, but also, that there may be a trade-off between project quality and quantity (i.e. levels of participation) when considering overall program effectiveness. We summarize what this implies for California's forest offset program and provide suggestions for improvements in light of potential program diffusion and policy learning.