Implications of forestry carbon offsets for the coal industry (Kessels/Hennessy/Bakker, 02-2006)

This report discusses the science behind carbon forestry offsets, the institutional setting around the Kyoto flexible mechanisms and current developments. In addition, the cost and potential and barriers to implementation of carbon offsets by coal industry are discussed. It is concluded that forestry carbon offsets offer an opportunity for coal users and producers to compensate greenhouse emissions from coal production and utilisation, but need to be part of a larger strategy involving more options for climate change mitigation. The science regarding sinks is still developing and a number of issues including eligible activities and the practice of accounting and monitoring need to be resolved. Sustainability issues also need to be considered.