Time to update the encyclopedia (don't follow that link unless you can stomach self-promotion):
Tropical forests store huge amounts of carbon. When their trees are cut or burned, the carbon is eventually released into the atmosphere, mixing with oxygen to form the long-lasting greenhouse gas carbon dioxide. The pace of deforestation is so great today that it accounts for an estimated 12 to 15 percent of global carbon dioxide emissions annually.
Economic forces drive this destruction — for timber, rangeland, mining and development. But there is also a powerful economic argument for preservation. Forests’ carbon reserves can be monetized and sold as offsets to greenhouse gas emitters who need them to comply with regulatory emissions limits, or who voluntarily want to reduce their carbon footprint.
These offsets typically are sold by utilities or other industrial companies that have reduced their emissions below a government-imposed cap. The offsets equal the emissions below the cap; their price is determined by supply and demand. The buyers are companies whose emissions are above the cap; the offsets are subtracted from their excess emissions, enabling them to avoid penalties. There is also a voluntary market where companies and individuals buy offsets to reduce their carbon footprint. The revenue is used to finance energy efficiency and other projects to reduce emissions.
These markets are booming, with trades each year in the tens of billions of dollars. But a potential pool of offsets has been largely left off the table — offsets that represent carbon emissions avoided by not destroying tropical forests. These were difficult to value because there was no way to accurately quantify the carbon savings. Nor were there reliable, transparent systems to ensure these forests would remain standing or that proceeds would be returned to local communities.
For those reasons, the European Union, which has the world’s largest system for trading carbon offsets, has not allowed offsets for what’s known as avoided deforestation. Other carbon markets, like the one run by the California Air Resources Board, are considering it.
The objections are now being addressed. In recent years, accurate and inexpensive techniques have been developed to quantify and verify carbon emissions that would be avoided by not destroying forests. Credible mechanisms for indemnifying offset credits (meaning, an acre of forest will always be protected even if the specific acre behind the credit is destroyed) and returning the proceeds from the sale of the offsets to local communities have also been devised. A new system that combines all of those components and biodiversity conservation, known as the Rainforest Standard, which we and 60 other scientists, lawyers and businesspeople have developed, is now being tested in South America to safeguard a 1.6-million-acre forest. ...
Following the link:
The Rainforest Standard’s underlying principle is that emission reductions must be permanent to justify credit revenues, and reductions will not be permanent unless economic benefits flow fairly to all local forest users and owners, who would otherwise have no stake in their permanence.