Forest Carbon Reductions and Removals: Achieving Net Zero Through Balanced Climate Strategies
In recent years, the distinction between “emission reduction” and “removal” forest carbon credits has captured the collective interest of the Voluntary Carbon Market (VCM). A prevailing narrative has emerged that carbon removal credits are more impactful and of higher quality than emission reduction credits.
In 2024, several high-profile agreements and initiatives ushered in a “carbon removals only” era, and as we enter 2025, the preference for removals has become mainstream. However, this shift has severely constrained private sector investment in forest conservation as a viable pathway to achieving the Paris Agreement’s goals and corporate net zero commitments.
VCM thought leaders describe this situation with a simple metaphor: when the bath is overflowing, mopping the floor isn’t enough—we need to turn off the taps. Or, in another common saying, when you’re in a hole, the first rule is to stop digging. Achieving global climate goals is nearly impossible without forest conservation, and the VCM must continue prioritizing emission reduction activities with the highest mitigation potential.
Understanding Carbon Reduction and Removal Credits
In nature-based climate solutions—particularly Improved Forest Management (IFM) projects—both emission reduction and removal credits represent one metric ton of CO₂e.
- A carbon reduction credit represents the emissions that would have occurred without a financial incentive to change forest management practices and increase carbon stocks.
- A carbon removal credit compensates forest landowners for the carbon actively removed from the atmosphere through the annual biological growth of trees.
Both credit types play a critical role in forest conservation and climate mitigation strategies.
Incentivizing Forest Conservation Is Critical
For forest landowners participating in IFM projects, the financial viability of increasing standing biomass depends on the liquidity of both reduction and removal credits. Shifting management goals—such as reducing harvest levels—often results in immediate income losses due to foregone timber revenue. Without the ability to generate revenue from reduction credits, the opportunity cost becomes too high, and large-scale forest conservation remains out of reach.
Research supports the urgency of maintaining and enhancing forests as carbon sinks. Erb et al. (2018) found that without intervention, global forests will only achieve half of their potential carbon sequestration.[i]
Similarly, Moomaw et al. (2019) advocate for proforestation—allowing existing forests to reach their ecological potential—as the most effective strategy for maximizing climate and biodiversity benefits.[ii]
Forest conservation, paired with sustainable forest management, is the most immediate, cost-effective solution to reducing emissions. To sustain large-scale impact, the VCM must continue incentivizing both carbon sequestration and long-term storage by maintaining forests as carbon sinks while maximizing ecosystem co-benefits.
Market Misrepresentation of Credit Quality
The claim that carbon removal credits are inherently superior to reduction credits is not supported by rating agencies. In-depth analysis by Sylvera and Calyx Global have found that credit quality varies significantly within both categories.
- Sylvera identified high-quality emission reduction credits and low-quality removal credits, as well as the inverse.[iii]
- Calyx Global’s research similarly found no consistent quality advantage between reduction and removal credits, stating: “It’s not valid to focus on removals because one believes they are higher quality.”[iv]
Credit quality must be assessed based on the specific characteristics of each project. Over-simplifying this issue by favoring removals at the expense of reductions ignores the complexity of forest carbon sequestration and risks undermining critical conservation efforts.
Carbon Pricing Expectations and Market Liquidity
As emission reduction credits continue to be devalued in the VCM, many market participants are exploring contingency plans to mitigate the risk of stranded assets. To address this imbalance, the market must align the value of carbon removal credits with the true opportunity costs of shifting forest management practices.
Regional Pricing Considerations for Landowners
Forest landowners across North America face vastly different economic conditions that impact their willingness to enroll in carbon projects:
- Southeastern U.S.: Relatively low timber prices and high productivity mean landowners rely on carbon revenue to justify deferred harvests. Current market dynamics make IFM projects less viable.
- Northeastern U.S.: A mix of industrial and family-owned forests, where carbon revenue can compete with traditional timber harvesting in many cases—but still requires both reduction and removal credit liquidity.
- Western U.S.: High-value timber markets and significant fire risk make carbon projects more complex. Without strong carbon pricing, landowners are unlikely to prioritize carbon over other revenue streams.
- Canada: Vast timberland holdings, but with slower tree growth rates, meaning landowners require premium carbon pricing for participation in IFM projects.
The lack of liquidity for emission reduction credits is already dissuading landowners from engaging in forest conservation projects. If removal credits alone are expected to carry the financial burden of climate mitigation, their price must reflect the full cost of shifting management practices across these diverse landscapes.
Ensuring Market Stability for Long-Term Climate Solutions
Large-scale forest conservation requires predictability and stability in carbon markets. Landowners commit to IFM projects under the assumption that the market will remain consistent over the decades-long duration of their agreements. Eroding this stability undermines participation and threatens the scalability of nature-based climate solutions.
Beyond carbon sequestration, forest conservation delivers other co-benefits:
- Enhanced biodiversity through habitat preservation.
- Improved water and air quality by maintaining healthy forest ecosystems.
- Increased soil conservation through reduced erosion and nutrient retention.
- Positive socioeconomic impacts for local communities dependent on forestry
These co-benefits reinforce the importance of a balanced approach to investing in the forest carbon market—one that values both emission reduction and removal credits to support the long-term viability of forest-based climate solutions.
To achieve net zero, the VCM must remain grounded in science, recognizing that carbon sequestration is a multifaceted challenge requiring a diversified approach. Forest conservation is not just a mitigation tool—it is a cornerstone of sustainable climate action.
[i] Erb, K.-H., Kastner, T., Plutzar, C., Bais, A. L. S., Carvalhais, N., Fetzel, T., et al. (2018). Unexpectedly large impact of forest management and grazing on global vegetation biomass. Nature 553, 73–76. doi: 10.1038/nature25138
[ii] Moomaw WR, Masino SA and Faison EK (2019) Intact Forests in the United States: Proforestation Mitigates Climate Change and Serves the Greatest Good. Front. For. Glob. Change 2:27. doi: 10.3389/ffgc.2019.00027
[iii] https://www.sylvera.com/blog/carbon-removals-vs-avoidance-a-dangerous-distraction
[iv] https://calyxglobal.com/blog-post?q=170&utm_campaign=2024_Social_AlwaysOn&utm_content=314628749&utm_medium=social&utm_source=linkedin&hss_channel=lcp-33720783
