Carbon offsets are widely promoted as a strategy to lower the cost of emission reductions and combat climate change. However, there is limited empirical evidence suggesting that offsets causally reduce emissions by the amount claimed. When sold into a compliance market, offsets will increase net emissions if they do not reflect real reductions beyond the baseline scenario. Here I introduce California’s U.S. Forest Projects Compliance Offset Protocol and consider the role of additionality in this program.

Chapter 1, "An overview of forest offsets," introduces forest offsets as a policy mechanism for combating climate change, focusing in particular on California’s U.S. Forest Projects Compliance Offset Protocol as one of the largest programs of its kind and Improved Forest Management (IFM) projects as the backbone of California’s program. Research completed to date on California’s program is reviewed, and challenges associated with measuring the effectiveness of offset programs like the California U.S. Forest Projects Compliance Offset Protocol are introduced. Literature reviews of modeling and remote sensing techniques used in past work are provided and approaches seen in later chapters of this dissertation to measure early indications of effectiveness in California’s forest offset program are justified.

Chapter 2, "Assessing participants of California’s U.S. Forest Projects Compliance Offset Protocol," creates an original database of information sufficient to assess IFM project participants in the program to date, including project characteristics, boundaries, and locations. A breakdown of the spatial, demographic, and geographic heterogeneity across projects is provided, and potential barriers to participation in the program based on characteristics of currently enrolled projects are discussed. Results suggest that projects owned by corporate and 'other' interests were most common; the majority of credits in California's program have been allocated to Tribal projects (48.4% of all credits), timber investment management organization (TIMO) and real estate investment trust (REIT) projects (23.4% of credits) due in part to their larger size, and family landowners are underrepresented in California’s offset program relative to private forest owners across the U.S. On average, across ownership classes, projects were stocked at carbon levels of 125% of common practice (the average standing live carbon of forests within the project's Supersection and Assessment Area).

Chapter 3, "Quantifying historical disturbance rates using remote sensing," uses remote sensing to create a unique database of harvest history on project and non-project regional lands to more comprehensively understand the IFM projects enrolled in California’s forest offset program, where historical forest management-related disturbance serves as an indication that lands were at risk of harvest prior to project commencement. Combining harvest history with the project characteristics and locations introduced in Chapter 2 allows us to probe additionality of these projects. I find that IFM projects have been primarily allocated to forests with relatively low historical disturbance (28% less disturbance than regional averages since 1985). TIMO/REIT-owned forestlands had the largest discrepancy in annual disturbance rate between Supersections (0.43%) and projects (0.17%), followed by corporate-owned forestlands with 0.35% annual rate of disturbance on Supersections and 0.14% annual rate of disturbance on projects. Tribal lands experienced the lowest annual rates of disturbance for both projects and Supersections, with the project rate (0.17%) higher than the Supersection rate (0.1%; p <0.001).

Chapter 4, "Measuring offset policy effectiveness using quasi-experimental econometric techniques," I empirically examine the additionality of forest offset projects early in California’s offset program by quantifying the impacts of forest offset projects on forest disturbance associated with carbon emissions. While the additionality of forest offset projects is determined by emission reductions over the 100-year project lifespan, optimal management may require early management decisions resulting in disturbance to facilitate improved long-term forest management, I propose that short-term additionality can serve as an early indicator of policy effectiveness. Two novel datasets—project boundary data (Chapter 2) and remotely sensed forest disturbance data (Chapter 3)—provide sufficient temporal and spatial heterogeneity to apply quasi-experimental statistical matching and panel regression techniques to estimate additionality. This analysis suggests limited additionality in enrolled projects, as the creation of forest offset projects did not significantly lower forest disturbance rates 3 and 5 years after project implementation relative to similar non-project lands. These results indicate that California's forest offset protocol may be contributing to an increasingly large carbon debt.

Results suggest that, to date, California’s offset program has selected IFM projects that have experienced relatively low disturbance rates over the past 36 years. As such, projects have much higher levels of aboveground carbon stocking than the average stocking within their respective Supersections. If these carbon-rich forests were threatened with harvest, they might be suitable choices for offsetting. These findings, however, suggest that many of the areas offset may have faced little threat of forest harvest in the absence of California’s offset program and are therefore non-additional in the short term. Because California's U.S. Forest Projects Compliance Offset Protocol is compliance-based, unless the management of offsets changes in the future, the policy may be creating a carbon debt and potentially leading to increased carbon in the atmosphere relative to other carbon reduction policies and initiatives. Altogether, results indicate opportunities to improve California's existing forest offset protocol, particularly in its process of establishing initial carbon baselines. This dissertation concludes with recommendations stemming from this early evaluation of effectiveness in California’s forest offset program.