Forests have the capacity to both emit and sequester carbon dioxide (CO2), the most common greenhouse gas (GHG). Trees, through the process of photosynthesis, naturally absorb CO2 from the atmosphere and store the element in its biomass, i.e., trunk, leaves, branches, and roots. Carbon is also stored in the soils that support the forest as well as the understory plants and litter on the forest floor.

When trees are disturbed, through events like fire, disease or harvest, they emit a portion of their stored carbon as CO2 into the atmosphere. The quantity of CO2 that is emitted over time may vary, depending on the particular circumstances of the disturbance. Thus, depending on how forests are managed, they may be a net source or a net reservoir of CO2. In other words, they may have a net negative or net positive impact on the climate. Currently, forests are the second largest source of global anthropogenic CO2 emissions, largely due to deforestation in the tropics.

However, through proper management and protection, forests can also play a positive and significant role to help address global climate change. The California Climate Action Registry's Forest Protocols are designed to address the forest sector's unique capacity to both store and emit CO2 and to facilitate the positive role that forests can play in climate change.