Before carbon is measured, verified, and listed for sale as an offset, it is something else entirely. For many Indigenous peoples across Canada, a standing forest is not a passive ecosystem waiting to be quantified—it is a living relative, bound to human communities by reciprocal responsibilities that have governed how people relate to their environment long before anyone conceived of a credit registry.
Bridging these two realms—the market logic of offsets and Indigenous worldviews—is a critical challenge for the success and durability of any forest carbon project in Canada today. That’s more important than ever, as the federal government moves forward in building a National Carbon Credit Framework. Simply put, Indigenous rights holders must be decision-makers in developing carbon market frameworks. This means recognizing Indigenous jurisdiction and knowledge as foundational to policy design.
The potential benefits of doing so could be significant for Indigenous communities across the country, but could also offer much-needed new avenues for reducing climate-harming emissions in a cost-effective manner.
For years now, Indigenous nations in Canada have participated directly in carbon markets through Indigenous-owned offset projects. That raises some complex—and critical—questions: Do offsets commodify nature? How might this sit alongside Indigenous worldviews that emphasize reciprocal responsibilities to land, water, and atmosphere, over thousands of years? Do offsets create real financial incentives to protect nature and Indigenous ways of life that depend on it?
Our research finds that carbon markets and Indigenous rights can be compatible—but only under specific conditions. And those conditions depend on policy choices made proactively, not corrected later. Some tensions require more work to resolve—in particular, ensuring that credits deliver credible, additional emissions reductions, while also ensuring offset markets recognize the benefits of Indigenous jurisdiction.
Not all carbon offsets deliver equal results
Carbon offsets are a growing part of Canadian compliance carbon markets. They generate credits for emissions-reducing or emissions-avoiding activities that can be sold on credit markets created by policies such as industrial carbon pricing. That can create incentives for emissions-reducing projects even if the firms that own those projects aren’t directly regulated. Unlike big industrial emitters like cement and steel manufacturers, offset projects don’t have a legal obligation to pay for their excess emissions, but can sell credits to those regulated emitters.
But historically not all offsets have delivered equivalent emissions reductions, and industry and governments have learned this the hard way, as some projects have proven less stringent in their carbon accounting than others. To address this, governments have established rules to help make sure that offsets are:
- Additional, meaning credits are only issued for reductions that wouldn’t have happened otherwise.
- Permanent, meaning the carbon stays out of the atmosphere for a set period of time.
B.C.’s Forest Carbon Offset Protocol (FCOP), for example, builds in guardrails against both. It requires proponents to demonstrate that offset revenue was required to implement the project, and mandates a 100-year monitoring period following the end of the crediting period, alongside a contingency account that withholds a share of credits to cover against reversals (e.g. from fires, pest infestations, or human activity).
Supporting carbon offsets consistent with Indigenous worldview
When offset projects get Indigenous governance right, they can generate revenue for Indigenous rights holders in a way that’s consistent with Indigenous worldview: protecting ecosystems that carry deep cultural and spiritual significance, without asking nations to choose between economic development and stewardship.The choice however, has to remain with Indigenous communities to decide on their own terms, whether the path of carbon markets is for them.
The clearest example of this governance framework being used in practice is Great Bear Carbon, an offset project spanning the territories of several Coastal First Nations in the Great Bear Rainforest and Haida Gwaii on the Central Coast of British Columbia. Ownership of the carbon itself sits with participating Coastal First Nations, through Atmospheric Benefit Sharing Agreements, which give nations control over developing and selling credits, rather than a revenue-share agreement administered by someone else.
Built on a reconciliation protocol established between Coastal First Nations and the B.C. government in 2009, the project layers a carbon program onto an already-settled question of jurisdiction. The agreement uses an ecosystem-based management model that treats socio-cultural and ecological well-being as inseparable goals. It also plans for the forest, and the people depending on it, in the timeframe of seven generations rather than for a single crediting period.
The results of the Great Bear model are measurable: more than 9.4 million tonnes of emissions sequestered since the project was implemented, 1,253 new jobs created, $63.5 million in local salaries invested, 123 new or expanded First Nations businesses launched, and 18 Guardian Watchmen programs established to monitor over 7 million hectares.
Nothing guarantees this model will translate cleanly elsewhere. But if Indigenous participation is added on as a compliance checkbox—rather than built in as a governing condition—the risk of tokenism is real. Buyers and communities alike will bear the cost later when a dispute over consent or benefit-sharing is bound to surface. Carbon offset programs will be more likely to be successful and durable if rights holders can exercise their jurisdiction.
Toolkits from the BC Assembly of First Nations and Ecotrust Canada establish this approach in offset-specific practice, framing rights and title as a pre-condition before carbon accounting begins rather than a benefit distributed once the credits are already flowing. Similarly, the Assembly of First Nations (AFN) First Nations Climate Lens, asks whether a given climate program strengthens a nation’s actual jurisdiction and control or merely consults it while leaving decision-making authority elsewhere.
Rights-based design increases the likelihood of permanence
Many Indigenous legal and governance traditions evaluate a decision based on its effect on the next seven generations. As a principle, it asks: “Does this hold up in a hundred and fifty years for grandchildren to come?”
But a carbon market, by contrast, is built to price emissions outcomes on time horizons dependent on shorter cycles than seven generation principles ask the land itself to be held. That mismatch in time is an example of a difference in worldviews.
The seven generation principle is an example of how Indigenous governance—and worldview—can strengthen offset programs, benefit Indigenous communities, and support the permanence of emissions reductions. Rights holder ownership, for example, can build in the operational capacity for community members leading some of the critical work required to maintain the integrity and durability of a forest carbon offset project, such as fire management, forest inventory, GIS, and monitoring. This is particularly relevant, as wildfire exposure to forest carbon projects is projected to climb sharply under a warming climate.
Additionality requirements may complicate Indigenous participation
If carbon offset permanence is where Indigenous rights-based design shows its strength, additionality is where the tension is sharpest between Indigenous worldviews and market rules. Offset protocols often reward protection from the threat of degradation from logging or development, for example, rather than ongoing protection where forestlands remain intact precisely because they have been well-stewarded in previous years. The latter category of projects are often excluded from carbon markets because they are currently not at risk of releasing stored carbon to the atmosphere.
B.C.’s FCOP, which requires that proponents demonstrate offset revenue is needed to implement a carbon offsets project, runs into this problem. A nation that is already protecting its territory—not because of revenue but because of law, responsibility, and relationship—may fail a test designed to prove that money made the difference.
The end results are similar in each case on the emissions side of the ledger: carbon is sequestered through intact healthy forests. Yet communities who have been able to steward and protect their forests are unable to access carbon markets unless they face a plausible threat of logging reversal.
Both goals matter. Offset markets must prioritize additionality, or else risk degrading the integrity of Canada’s carbon markets with “hot air” offsets that don’t reflect real emissions reductions.
At the same time, more work is required to explore offset protocols and rules that recognize the value of Indigenous governance that also have protected—and continue to protect—-forest lands from future reversals.
Carbon markets should prioritize rights and self-determination first
Canada has an opportunity to harmonize provincial and federal carbon markets, with offsets as a central piece. If B.C.’s Output Based Pricing System, the federal system, and a still-developing suite of national offset protocols were harmonized, it could create bigger, more robust markets.
This moment is also an opportunity to act on reconciliation.
The federal government’s Improved Forest Management protocol for private and Indigenous-controlled lands is a step in that direction, but the absence of an equivalent protocol for Crown land—where most of Canada’s forests actually sit—leaves many Indigenous nations without a clear pathway to lead projects on their own territories. Closing that gap, in partnership with rights holders rather than for them, should be treated as integral to the framework.
The lesson from a decade of B.C.’s experience is not that carbon markets and Indigenous worldviews are naturally aligned, it’s that they can be made to be compatible, through a deliberate sequence of decisions made by policymakers. The design must prioritize rights and self-determination first, market mechanics second, and a time horizon measured in generations rather than compliance cycles.
The National Carbon Credit Framework is an important opportunity to integrate these approaches at the ground level, rather than negotiating them after the foundation has been laid.
