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City Forest Credits: Quantifying the Benefits of Urban Trees

The Story, Science, and People Behind the First National Urban Tree Carbon Offset Standard

Talking about the benefits of urban trees is easy; quantifying them is hard. And developing a way for urban trees to earn and sell carbon offsets is an altogether different challenge — one that no one had tackled successfully before City Forest Credits (CFC).

CFC Founder and Executive Director Mark McPherson knows this challenge well. He led the team that developed CFC’s standard and carbon protocols — a process that involved several years of collaboration between forestry experts, climate scientists and policymakers. Their goal was to create a new funding mechanism to help reverse the decline of urban forests.

“The need is pretty clear, which is that cities across America and in fact globally are losing tree canopy almost everywhere,” McPherson said. “There’s just never been enough consistent public funding for trees. And that public funding is erratic.”

CFC is a nonprofit carbon registry. It developed the methodologies for quantifying the carbon and co-benefits from urban trees. And it issues carbon offsets from forest projects in and around cities. Organizations can purchase these third-party verified City Forest Carbon+ Credits as a means of reducing their own carbon footprint, with the resulting funds being used for city tree planting or preservation projects. 

CFC is one of only five carbon registries in North America to earn a coveted International Carbon Reduction and Offset Accreditation (ICROA) endorsement, and the only one to receive an ICROA endorsement for preserving existing urban trees. 

“It’s the most prestigious endorsement body in the carbon world, which is validation of all the work we put into it to make it rigorous and transparent,” McPherson said.

But CFC tracks more than just carbon impacts. Urban trees provide a host of co-benefits like reducing stormwater runoff, improving air quality, and reducing energy consumption. CFC calculates the dollar value of these additional benefits too — hence the “Carbon+” label they apply to their carbon offsets.

As of 2024, CFC has issued offsets for more than 55 carbon offset projects in cities across the United States, resulting in nearly 300,000 trees planted, 2,000 acres of woodlands preserved, and more than 400,000 metric tons of carbon stored over the projects’ lifetimes. The program has grown as more organizations look for ways to offset their carbon emissions — and avoid some of the perceived uncertainties associated with international carbon offsets.

“One distinctive thing about urban forestry offsets is that they’re more tangible to people, as you can walk right up to the trees. They’re right here in our communities,” McPherson said.

Developing a National Urban Forest Carbon Offset Standard

Carbon offsets for rural or remote forests have been around since the 1990s, but urban trees have been overlooked. And although some pioneering urban forest scientists were developing methods to quantify carbon, no one had developed a carbon protocol that would make it possible for urban forest projects to earn carbon offsets. That changed starting in 2011 in California, where a statewide cap-and-trade law spurred demand for carbon protocols to allow companies to offset their carbon emissions.

Carbon protocols serve as rulebooks that spell out the requirements for carbon offset projects. These include eligible locations, offset issuance processes, quantification methods, project ownership, and verification and monitoring requirements. Carbon protocols are designed to ensure that those who purchase carbon offsets are getting what they paid for.

Officials in California had identified urban forestry projects as a potential avenue for carbon sequestration and sought to develop a carbon standard for urban trees. The state awarded a pair of grants to the Climate Action Reserve (CAR) in 2011 and 2013 to develop a protocol. 

“The CAR work was a tremendous learning opportunity for urban forestry, and though it produced some real advances, it unfortunately has never had any applicants,” McPherson said.

McPherson, a lawyer and conservationist, served on the 2013 drafting group alongside his brother Greg, a prominent U.S. Forest Service researcher and the team’s lead scientist. He said a key issue was the time requirement for projects. California required landowners to commit to keeping the projects in place for 100 years — something that might be feasible for rural projects, but that proved to be unworkable for urban landowners. 

McPherson and other members of the drafting group decided to reboot and try again, but from a different angle. They recruited and formed a new national team and set about drafting a set of protocols with a nationwide voluntary carbon market in mind, rather than California’s compliance market. Thus, City Forest Credits was born. 

With an all-volunteer, national team, CFC developed a series of new protocols for afforestation and reforestation (i.e., planting) as well as preservation projects, with a goal to craft workable protocols that would generate projects. They began work in 2016, building on lessons learned from the California effort. After many drafts and revisions, and review and comment from a wide group of stakeholders and interested parties, they began enrolling projects in 2018. The following year, they announced their first verified project — a preservation effort in King County, Washington.

“The technical side of this, and the comments from many people across different subject fields and geographic areas, has been an important part of why our work has been successful. We had a lot of input, experience, and time spent studying urban forest carbon before even starting to talk to potential urban forest projects,” McPherson said.

Calculating the Carbon Storage and Ecosystem Co-Benefits of Urban Trees

Trees are nature’s own carbon capture technology. Through the process of photosynthesis, they absorb carbon dioxide (CO2) from the atmosphere, storing carbon in their wood and releasing oxygen. 

The amount of CO2 a tree can absorb varies depending on its species, age, climate zone, and health, as well as local environmental conditions like soil quality, water availability, and sunlight. CFC’s carbon protocols leverage many years of U.S. Forest Service research and advanced statistical modeling to spell out a process for calculating the amount of carbon storage — measured in metric tons — provided by a tree planting or preservation project. 

For example, the 2022 planting project between Green Cities Accord and the Minneapolis Park and Recreation Board involved the planting of 8,595 street and parkland trees throughout Minneapolis. Each individual tree planting site is mapped and the tree species recorded, which is one part of a detailed 545-page initial project design document

Different quantification methods are used for different types of projects. In this case, because the trees are spaced more than 16.5 feet apart, a “single-tree quantification method” is used, which means calculations are influenced by individual trees. Other projects might plant the trees closer together, in which case a method that tracks overall canopy species composition and growth is used.

To estimate the amount of carbon storage, the future biomass of each tree is calculated using growth equations that are specific to urban trees. These are based on a massive U.S. Forest Service study that measured the growth of 14,000 trees in 17 U.S. cities over the course of 14 years and produced 365 separate equations. That study produced a detailed urban tree database with specific growth equations for individual tree species.

The tree species are grouped together into nine general types (i.e., “broadleaf deciduous large,” “coniferous evergreen medium,” etc.), each of which have their own equations reflecting the range of growth within those tree types. The equations are also tied to specific climate zones. Using these equations (with help from a CFC spreadsheet tool), the 8,595 trees in the Green Cities Accord project are estimated to capture and store 17,882 metric tons of carbon dioxide over a 25-year period. To be conservative, this figure incorporates an estimated 20 percent mortality rate among the newly planted trees and a 5 percent buffer pool maintained by CFC.

Each ton of carbon dioxide removed from the atmosphere equates to one City Forest Carbon+ Credit registered with CFC that can be sold by the project operator — like Green Cities Accord. The price is negotiated by the buyer and seller, and depends on the project’s type, size and location, as well as market conditions. Historically, prices for CFC-registered offsets have ranged from $22 to $45 per ton of CO2.

Calculating Stormwater, Air Quality and Energy Savings

As the name implies, there’s more to City Forest Carbon+ Credits than just carbon capture. Along with quantifying carbon sequestration, CFC’s protocols provide a method for calculating some of the important co-benefits unique to urban tree projects. These include rainfall interception, air pollutants captured, and energy savings.

Rainfall Interception

Tree canopies are estimated to intercept between 10-40 percent of rainfall before it reaches the ground. This reduces the amount of stormwater runoff entering local storm sewer systems and carrying pollutants into waterways. 

To estimate the amount of rainfall intercepted, a numerical rainfall interception model is applied using species-specific data from the urban tree database. The estimated rainfall reduction is then priced by estimating costs of controlling stormwater runoff for that volume of rainfall.

For example, the 2022 Green Cities Accord project is estimated to reduce local stormwater runoff by 46,511 cubic meters per year, resulting in an annual cost savings of $332,977.

Air Pollution Reductions

Trees improve air quality by reducing ozone, nitric oxides and a variety of toxic particulate matter. The removal of these air pollutants from urban areas has a significant positive effect on human health.

Under CFC’s protocols, a numerical model is used to calculate the dry deposition of pollutants on trees using several parameters, including hourly meteorological data and pollutant concentrations from local monitoring stations. A dollar value is then assigned, based on models that calculate the damage control costs of certain pollutants to meet air quality standards.

Using the 2022 Green Cities Accord project as an example again, the newly planted trees are estimated to capture 1.33 tons of particulate matter per year, corresponding to an annual estimated dollar value of $5,250.

Energy Savings

Urban trees reduce energy costs by cooling buildings in the summer — both locally (by providing direct shade) and regionally (by reducing the urban heat island effect). Trees also produce energy savings in the winter by helping shield buildings from cold winds, thereby reducing the amount of heat loss. These savings are important not only for their economic value but also because the energy production required to heat and cool the buildings is itself a direct contributor to climate change. 

The CFC protocols use numerical models and simulations to calculate the dollar value of tree projects’ energy savings based on their geographical location and the trees’ proximity to buildings. 

For the 2022 Green Cities Accord project, those cost savings work out to:

  • 1,456,708 kilowatt hours per year of electricity savings, valued at $110,564 annually; and
  • 20,281,064 British thermal units per year of natural gas savings, valued at $197,431 annually.

The Non-Quantifiable Benefits of Trees 

What about the many other benefits of trees? Research has shown that trees also have beneficial impacts on local economies, wildlife and even humans’ mental health. Unfortunately, the science in those areas hasn’t advanced to the point where those benefits are quantifiable — at least, not yet.

“It’s really an issue of, ‘What can we really claim?’” McPherson said. “Trees clearly deliver a lot of human health benefits. Are we at a point scientifically where we can quantify that down to the tree? No, we’re not.”

Validation, Verification, Monitoring and Reporting

Credibility is key for carbon offsets. To ensure that projects meet their stated goals, CFC built a range of verification and monitoring requirements into their protocols. 

Each project is verified by a trained, independent third party who thoroughly reviews the project’s documentation, data and imagery prior to any offsets being issued. Third-party verification helps ensure that the verifiers don’t have a financial stake in whether or not the project is approved.

“To have a really credible carbon program, you need independent, third-party verifiers. They can’t have a stake in the project,” McPherson said. “That reduces any incentive on the part of the verifier to kind of shade things or do what the project operator wants them to do.”

At the start of each project, CFC conducts three validation activities: a pre-validation by CFC to ensure that applicants understand their commitments and the protocol requirements before submitting project documentation; a CFC review of the Project Design Document (“PDD”) to ensure that it is complete and accurate; and finally, verification by an accredited, independent third party. This final process produces the verification report, which is publicly posted in the CFC’s project registry.  

The validation process doesn’t end there, however. To ensure that the trees survive, and the projects meet their stated goals, offsets are issued at specified time intervals instead of all at once. For example, partial offsets for afforestation projects are issued in years 0, 4, 6, 14, and 26. At these times, project operators are required to submit updated documentation and obtain additional third-party verification. If they can demonstrate that the trees meet certain thresholds outlined in the protocols, the expected number of offsets are issued. If the trees are under the threshold for mortality or growth, the number of offsets issued is reduced accordingly. Additionally, project operators have to submit an annual monitoring report detailing tree loss as well as changes in land ownership, project design or management.

The thoroughness of these requirements are necessary in order for buyers to be confident in their investment in carbon offsets. 

“It’s been challenging but exciting to try to take this puzzle and figure out how we can create protocols and projects that are workable for urban forestry, but also highly credible in the carbon world,” McPherson said. “That’s why the endorsement from ICROA is so meaningful.”

All of CFC’s protocols are spelled out in meticulous detail on their website for those interested in a deeper dive — or, as McPherson jokes, for insomniacs who need reading material to help fall asleep.

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