This report, carried out by ClimateXchange, identifies future options for the operation of carbon markets in the UK which could recognise the potential carbon contribution of UK forests. The report reviews current mechanisms for administering the flow of carbon credits, details options for the development of future carbon markets and highlights barriers to those options.

The central problem motivating this research is that currently, there is a perception that owners of UK forests do not receive the full benefit from the ‘climate service’ provided by maintaining and increasing the stock of carbon locked up in their forests (both above and below ground). While some UK forestry grant schemes are explicitly set up to help combat climate change by encouraging enhancement of carbon stocks in woodlands, forest owners may question why there are not more options available for them to benefit directly from some kind of tradable carbon credit.

The principal objectives of the report were to review current international and national mechanisms which administer the flow of carbon credits generated by forestry and to detail options for the development and future operation of forest carbon markets in the UK, including identifying barriers to the above options and how they could potentially be overcome, as well as the likely scale of impacts on the forest sector in the UK.