What Happens To Carbon Credits When The Forests That Capture Carbon Burn Down? OR Case In Point

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“If a forest burns down, you didn’t keep carbon out of the atmosphere,” said Danny Cullenward, an energy economist at Stanford University. “So if you let a refinery pollute more because they bought an offset premised on those trees, you have a problem.” Luckily, California anticipated this problem. The California Air Resources Board, or CARB, which oversees the offset program, built in a type of insurance that accounts for risks like fire, disease, and drought.

This is how it works: Land owners that manage forests under California’s program only get paid for between 80 and 90 percent of the carbon they store. This means all of the forests in the program are storing an extra 10 to 20 percent more carbon than California actually sells as credits on the offset market. CARB keeps track of this “buffer pool” of extra carbon, and can tap into it if any of the forests with existing credits get destroyed. For example, back in 2015, a fire wiped out Trinity Timberlands, a forest management project in Northern California worth about 850,000 credits. In response, CARB pulled 850,000 credits out of the buffer pool to compensate for all that lost carbon storage. The system worked.

But right now, the buffer pool has about 25 million credits — and some scientists are worried that won’t be enough. William Anderegg, a researcher at the University of Utah, thinks there’s a strong case that current policies around forest carbon offsets, including California’s, underestimate the risks from climate change. Studies show that fire frequency, size, and severity will continue to get worse due to climate change, especially if the world doesn’t start seriously cutting emissions. Anderegg also pointed out that California’s program assigns the same risk to forest carbon offset projects around the country, even though fire risk in Maine is really different than in California.

The Lionshead fire is still burning, and it’s hard to say how bad the damage to the Warm Springs project will be. In the absolute worst case scenario, however, the damage could be devastating: If all of the 2.6 million tons of stored carbon is unleashed into the atmosphere, that means that as much as 10 percent of the entire buffer pool would be wiped out by just one fire. “This doesn’t mean we should give up on offsets, but we need to be clear-eyed about this,” Anderegg said. “If we don’t have the risks priced correctly, we’re basically investing in a bunch of climate policy that may turn out to be worthless.”

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https://grist.org/climate/this-oregon-forest-was-supposed-to-store-carbon-for-100-years-now-its-on-fire/

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1. True but....

When a forest fire burns through a stand not all of the carbon trapped in that stand is released. Depending on the intensity and duration a large portion is left in the standing trees. The Doug Fir that grows in the mountains in Oregon have a thick bark that has evolved to be resistant fire. A portion of the burnt over acres will survive and the understory will regenerate on its own.
In the south, land managers periodically run "controlled burns" through their stands to maintain the fuel load down to help avoid the risk of catastrophic fires like we just saw.
Those trees are killed will be cut and turned into boards and plywood. That carbon is still trapped but it begins its journey back into the carbon cycle.

Your point is correct but the calculation is not 100% to 0%.