Using forests for carbon offset is like selling indulgences – it does not mitigate climate change

18.6.2021 / Blog
Blog / Blogi

Carbon compensations with the help of forests attract increasing attention in both Finland and elsewhere.

In simple terms, using forests for carbon compensations refers to a model where forest owners increase the sequestering of carbon in their forests against remuneration. They are paid by a business or a consumer, with the motive of offsetting emissions due to their own activity by increasing the sequestering of carbon in forests.

This sounds like a great idea. So what could go wrong?

Quite a number of things, in fact. Carbon neutrality based on carbon compensation can easily lead to calculated laxity. A business that pays compensation for its activity can cheerfully continue to pour out fossil emissions, and people partial to a good barbecued steak most every summer day need not change their ways, since they have forked out money to cleanse their reputation and conscience.

The first priority in mitigating climate change is to reduce fossil emissions. The biggest problem of the climate that we all share, that is, fossil emissions, must be resolved before anything else, though we do also need solutions to remove carbon from the atmosphere.

By now, the value chains of many products contain an assessment of the product’s climate impact. The Nordic model of sustainable forestry includes the promise that every tree generation will be followed by a new and even better one.

The criteria of forest certification in Finland, for example, make sure that the carbon storage in forests will not decrease in the long run. No product of the Nordic forest industry causes forest loss, and the added value created in the Nordic value chains of wood products is not based on our ever having destroyed our forests.

But this is not the case everywhere. Areas that have been deforested can be reafforested, and the resulting carbon sink can be sold to compensate for emissions from fossil-based industries.

In the worst case, the carbon thus bound in forests will end up bolstering the image and carbon-neutrality goals of the oil industry – while at the same time, the climate-friendliness of wood-based products is called into question in the carbon sink calculations of the European Union.

An extensive market of carbon compensations would be advantageous to many powerful actors. Yet we need to ask, would the benefit for the climate or the land owners be on a par with that of, say, the oil industry?

From the climate perspective the benefits would be extremely doubtful. And, as for the forest owners, they would certainly not benefit from mechanisms which, in the long run, would cause forest-based production to relocate away from Europe.

Given all this, why is there such an interest in carbon compensations?

It is obvious that many branches of industry based on the refining of fossil raw materials, or such branches as aviation, can see a great deal of potential for safeguarding their activity by means of compensations. Governments, on the other hand, regard private financing as an alternative to funding climate measures with public money.

What the forest owners see in this is a new revenue logic. Environmental NGOs have conflicting opinions – they question the benefit to climate, but some see this as a new source of financing forest protection.

An increasing number of climate experts are voicing doubts about the current operating models of carbon compensations and the impact of current projects. The most crucial drawback is perhaps that projects such as those implemented in Europe for carbon compensations do not create a surplus that benefits the climate.

Is there any sense in moving carbon sink units back and forth in accounting systems without any benefit to the climate? The European Union’s joint climate policy has already set a level for the carbon sinks within the land use sector that can be reached regardless of whether or not carbon compensation projects are financed with private money.

From the perspective of Finland’s national interest there are good grounds for doing all we can to improve the carbon sequestering capacity of our forests and their climate resilience. Forest growth and forest area must be increased, but this must not be based on mechanisms that postpone the reduction of fossil emissions.

If we want to accelerate carbon sequestering, we need a strong national grip and perspective. It would be short-sighted to set up compensation systems that turn sustainability into something traded between sectors of industry, with the result that reaching overall sustainability is slowed down or even prevented.

All measures to look after the growth and health of forests and to increase forest area must support the reaching of global climate goals and give consumers the opportunity to make choices on the basis of the climate impact of goods.

Anniina Kostilainen, Matti Makela
In the worst case, carbon sequestered in forests will end up bolstering the image of the oil industry at the same time as the climate-friendliness of wood products is called into question in the European Union’s carbon calculations, write Anniina Kostilainen and Matti Mäkelä.

3 comments on “Using forests for carbon offset is like selling indulgences – it does not mitigate climate change”

Very good points, thanks Anniina and Matti!

The risk of “calculated laxity” or moral hazard is real. But I also see a real risk of biased competition between the fossil industry and the bioeconomy.

Just about a week ago, “La Libération” published a map of Europe, showing where the industrial GHG emissions come from. This map talks loud:

Forest carbon offset would simply be a tool for industrial policy of the few but heavy Western European industrial hubs to continue emitting fossil GHG – and perhaps convenient for them simultaneously to be a tool to limit growth potential in their biggest competitor – forest-based bioeconomy. I wouldn’t trust the good intentions and keeping the entire EU’s interest in mind by those politicians coming from the Netherlands, Belgium or Germany in this debate…


I very much agree with the thinking here and love the Lutheran disapproval of selling indulgences. The comparison is very apt!


The problem still remains that the EU decision-makers do not understand that the more the forest grows, the more it will sequestrate carbon. The only thing we need to do in Finland is to increase out prescribed burning after clearcuts.


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