This is the second part of a two-part series. Part one can be found here: New carbon pricing fuels 600% revenue surge for B.C. community forest

Turn over a fir needle and you’ll find two silver streaks that, under a microscope, reveal thousands of stomata—the tiny, porous mouths of a tree.

On a sunny day, the pores open, allowing the tree to absorb carbon dioxide in a chemical process that transforms invisible gas into trunks, limbs and bark.

Plants first started inhaling carbon in this way more than 400 million years ago. In the years since, forests have colonized land and today absorb roughly 7.6 billion metric tonnes of carbon dioxide every year—double what they emit.

That number hides some worrying trends. In Canada, logging and wildfires flipped Canadian forests from a net carbon reservoir to a net source about 25 years ago, according to the federal government.

British Columbia responded by launching one of the world’s first large-scale projects designed to generate revenue for local communities by not logging old-growth forests.

The model, which began in the Great Bear Rainforest in 2009 and has since been exported to the Amazon and Africa, created market value by putting a price on carbon locked in and absorbed by trees.

On the surface, the premise appears simple: a company or government pays to protect forests at risk of logging, and in exchange, they receive tradeable carbon credits—known as forest carbon offsets—used to cancel out their own emissions.

After years of operating as a voluntary system often financed by governments, B.C.’s carbon landscape shifted overnight on April 1, 2024. The province’s new mandatory industrial policy now forces big emitters to either offset their pollution or pay a steep price.

After a short delay, the move led to a 2025 windfall for a community forest co-managed by the Resort Municipality of Whistler and the Lil’wat and Squamish nations.

Cheakamus Community Forest forest raised $600,000 in forest carbon offsets in a single sale to a mining company—a six-fold year-over-year increase that would have never been possible without B.C’s new industrial carbon policy, said executive director Heather Beresford.

But while Cheakamus celebrates rising demand and higher prices, Gary Bull, a professor emeritus of forestry at the University of British Columbia, said B.C.’s decision to regulate the carbon market has made it nearly impossible for others to take part.

“We’ve seen very limited carbon income coming into B.C.,” Bull said. “Government trying to control a market is just a mistake.”

B.C.’s voluntary carbon market sees limited uptake

Despite their potential, only a handful of forest carbon offset projects have succeeded in B.C. Some of those projects have sought validation through a global voluntary carbon market—private, unregulated systems where corporations like Walt Disney Co. (NYSE:DIS) and Shell plc purchase credits verified by independent third-party firms.

In 2008, the Nature Conservancy of Canada bought and later launched the 54,000-hectare Darkwoods Forest Carbon Project near Creston, B.C. The project sold millions of credits to private companies, but also to the B.C. government.

In 2013, the province’s then-auditor general John Doyle investigated Darkwoods alongside a gas flaring carbon credit project near Fort Nelson. In both cases, he found the projects failed to demonstrate that the sale of carbon credits was needed for the projects to go forward.

“In industry terms, these projects would be known as ‘free riders’,” said Doyle at the time. “Together, they received $6 million in revenue for something that would have happened anyway.”

More recent third-party audits show the 100-year Darkwoods project is now largely meeting its goals, issuing millions of carbon credits, and storing enough carbon to offset emissions from about 6,700 British Columbians per year.

​On Vancouver Island, Mosaic Forest Management Corp. said in 2022 it would defer logging on 44,000 hectares of land in a project known as the BigCoast Forest Climate Initiative.

A subsequent audit from the U.S.-based company Renoster Systems Inc. found the project suffered from a lack of transparency and accounting problems—including a failure to consider fire risk—that rendered its carbon credits “highly dubious.”

“Most critically, the project’s area appears to us to be gerrymandered,” Renoster concluded.

Mosaic strongly disputed those claims, though in 2024, it temporarily suspended the program to assess what it described as accounting errors.

A spokesperson for the BigCoast initiative confirmed the program is still “on hold” as it worked to “align the project design to the latest best practices and standards.”

Outside of B.C., forest carbon offset schemes have faced intense scrutiny in several U.S. states and multiple countries that make up the Amazon Rainforest.

High-profile investigations have documented a number of programs purporting to protect forest carbon stocks—only later finding they never preserved forest carbon, were used as cover to launder illegal logging, or sold millions of credits to avoid cutting trees when the threat never existed.

Even some of the industry’s biggest auditors have faced controversy. A 2023 investigation by The Guardian newspaper found a significant percentage of rainforest carbon offsets provided by the Washington, D.C.-based auditor Verra were “largely worthless.”

Verra—which audits Darkwoods and BigCoast—later contested the findings, stating the reporting was based on research that “massively miscalculate” its certified projects.

Other community forests face carbon credit ‘dead end’

The B.C. government’s efforts to finance forest management through carbon offsets has faced mixed success, experts say.

Advocates often hold up the Great Bear Rainforest as a poster child for how to successfully run long-term carbon credit programs backed by government. Spanning five million hectares along the northwest coast and Haida Gwaii, the project has protected about 85 per cent of the rainforest from industrial logging. The forest carbon offsets have generated over $85 million for its Indigenous shareholders—largely fuelled by the B.C. government acting as its biggest buyer.

But according to the latest records available through B.C.’s Carbon Registry, only two other locations in B.C.—the Cheakamus Community Forest and a much smaller project on Quadra Island—have sold carbon credits under the government-run market.

After years of researching the sector, UBC’s Bull said the province’s restrictive carbon offset protocols have failed to keep pace with the higher value and standards found in other private markets.

One of the province’s mistakes, according to Bull, was a decision not to harmonize standards with Quebec, California and a number of other western U.S. states when it had a chance to do so in 2008. In the years since, he said private carbon markets have become “as sophisticated as the Toronto Stock Exchange.”

“There might be a spurt of interest now,” said the economist of Cheakamus’s recent surge in revenue. “But I’d say it’s still tokenism with what they are getting.”

For Susan Mulkey, a senior manager at the BC Community Forest Association, Cheakamus’s unique success was driven by Doug Konkin—a former deputy minister of forests who lived in Whistler and is widely credited with facilitating its entrance into B.C.’s carbon market.

“I don’t know what he did. All I know is [Whistler] was the first and the last community forest that qualified,” said Mulkey, whose group represents the province’s 62 community forests. “We have invested resources in it at numerous increments over time. And we’ve been slammed every time.”

“It’s just such a dead end for us. It’s so frustrating. It does not make sense.”

The Nuxalk Nation explored launching a carbon credit program near Bella Coola a year before the Cheakamus project succeeded. But a 2014 study led by Bull identified several barriers, including a provincial requirement that the community forest maintain a steady harvest of timber.

The Sunshine Coast Community Forest is among the latest to try to launch a carbon credit program. In 2021, it set aside 30 per cent of its treed areas for conservation, and would later sign a benefit-sharing agreement with a local First Nation. Over the coming years, managing forester Warren Hansen remembers thinking “how can I leverage that?”

Hansen took a micro-certificate course for carbon accounting at UBC, and altogether spent hundreds of hours trying to launch a carbon offset program on the Sunshine Coast.

But when Hansen spoke to staff in the B.C. government, he said they rejected the idea, claiming that under the Forest Act, provincial land must be used for timber harvesting rather than the preservation of carbon credits.

“It was a flat out no,” he said.

A legal and financial roadblock

Warren Greeves has spent years at the centre of the B.C.’s carbon credit debate—serving as a manager across multiple provincial ministries before leaving government in late 2025 to lead policy impact at the Pacific Institute for Climate Solutions.

Both the Great Bear and Cheakamus forests set up their carbon credit programs under the province’s original forest carbon offset protocol. In 2022, Greeves led a B.C. Ministry of Forests team tasked with building a second version of that policy.

He declined to comment on the legality of how Whistler was able to build its carbon credit program while all other community forests have so far failed.

“What I can tell you,” he said, pointing to the Great Bear Rainforest, is that “those projects came out of decades of civil unrest and a big lobbying effort” by environmental groups, non-profits and Indigenous communities.

Greeves acknowledged that the current B.C. model still puts up a lot of barriers—both legal and financial—for proponents looking to start a forest carbon offset program.

The Darkwoods and BigCoast projects were established on private land. But most of B.C.’s forests—including community forests—grow on Crown land that are subject to the Forest Act.

While that law sets out terms for harvesting trees, Greeves noted that at no point does it mention the word “carbon.”

“The current Forest Act just really isn’t set up to manage for carbon,” he said.

Short of amending the act, he said B.C. needs new regulatory tools or a clear legal process that can provide more certainty.

The relatively small scale of some community forests presents another hurdle. A 2024 report from the firm ClimeCo found that even if the Sunshine Coast and District of Metchosin pooled their community forest lands into a 150-hectare forest carbon offset project, the venture would result in a negative cash flow.

To become financially viable, such a project would require at least 300 hectares of forested land under imminent threat of logging. Increase the area to 450 hectares, and the report found an offset program that combined at least three community forests could generate an annual cash flow starting at $775,000 and rising to $1.75 million in the project’s later years.

A separate 2025 UBC study reinforced those findings, concluding that even if the Sunshine Coast pooled its community forest with others, the process remains so complex and expensive that it would yield very few credits and little “cold hard cash.”

For Hansen, his experience offers evidence that the B.C government has failed to provide the certainty needed to grow forest carbon offsets programs beyond what currently exists.

“I’m not really seeing any leadership from government on what that looks like,” he said. “I think it’s created a lot of cynicism.”

When asked why no other community forest has been able to replicate Cheakamus’s carbon credit project, a spokesperson for B.C.’s energy ministry said approval under the current protocols depends on “site-specific conditions” that are “not easily replicated using a single model.”

Ministry spokesperson Peter Lonergan also pointed to a complicated list of steps proponents must complete to show their carbon offsets are real, verifiable and permanent.

Such validation, read his emailed statement, “may be difficult for some community forests to demonstrate.”