How the Panama Offset Credits Were Created

The CO2 offset credits in Panama were created through the purchase of old degraded or abandoned lands on the Pacific Coast in Las Lajas. This land typically has undergone a land use cycle from deforestation to agriculture, grazing, ranching to the point that once the productive capacity of the land has been degraded and can no longer produce for an economically viable way, it has been abandoned in low quality pasture and weeds.

The land was reforested in 21 native species adapted to the region. These species were chosen for their ecological functions in the forest structure. The benefits of this method include a biodiverse habitat, water and soil conservation, nesting trees and food producers for local and migratory birds, as well as establish a mature forest structure in the first couple of generations by catalyzing forest succession with species that would naturally establish later in a natural forest regeneration scenario.

The project uses local community labor in forest nurseries that germinate certified seed sources of native species for the reforestation saplings. Community members also work on organic manure production, land preparation, planting, forest maintenance, fencing, and fire control. This project pays above average wages as well as providing social security and medical benefits that are rarely available to the rural workforce.


The trees are cultivated with locally produced organic manure, and planted with nitrogen fixing cover crops that inject fertilizing nutrients into the soil near the tree's roots as well as eliminate competition for light, water, and nutrients with other vegetation. The mortality of trees is low in this system and saplings that have not taken in the first year are replaced with new trees from the nursery. The forest is maintained from its establishment through 25 years with attention to fire control, fencing,integrated pest management (pests are less likely in an area with such a diverse mix of species planted in a random way to mimic a natural forest structure when mature), and periodic cleaning of competing vegetation from the base of the trees as they become established.

The augment in carbon sequestered on site as the forest grows is measured and verified by a third party audit. This carbon audit measures growth on the site and compares it to a baseline measurement for the pastureland at the beginning of the project. The carbon offset is then determined by taking the total carbon on site as the forest matures through time and subtracting the baseline carbon on site at the beginning of the project. After 25 years, the land is transferred to the existing Forest Foundation in Panama and use of the land is then managed by the foundation as a land trust for the local community to use. The area will continue to grow and sequester carbon well past 60 years, but only the carbon offsets for the first 25 are counted, as after that non-destructive use of the land by local community members is allowed. The only stipulation on the local management of the area is the existence of a conservation easement that states that the land cannot be converted from forest cover. Limited harvesting, non-timber forest products, understory shade-crop agriculture, bioprospecting, iguana farming for meat, etc. are all promoted by the Foundation as sustainable options for economic revenue generation for the local community by the forest. The goal is to promote awareness that the forest is worth more standing than it is cut.