Accounting for risk in valuing forest carbon offsets

Background: Forests can sequester carbon dioxide, thereby reducing atmospheric concentrations and slowing global warming. In the U.S., forest carbon stocks have increased as a result of regrowth following land abandonment and in-growth due to fire suppression, and they currently sequester approximately 10% of annual US emissions. This ecosystem service is recognized in greenhouse gas protocols and cap-and-trade mechanisms, yet forest carbon is valued equally regardless of forest type, an approach that fails to account for risk of carbon loss from disturbance. Results: Here we show that incorporating wildfire risk reduces the value of forest carbon depending on the location and condition of the forest. There is a general trend of decreasing risk-scaled forest carbon value moving from the northern toward the southern continental U.S. Conclusion: Because disturbance is a major ecological factor influencing long-term carbon storage and is often sensitive to human management, carbon trading mechanisms should account for the reduction in value associated with disturbance risk.