Silvery light flickers through the canopy of the Van Eck forest down to a fragrant carpet of needles and thimbleberry brush. A brook splashes along polished stones, through thickets of ferns. How lush. How lovely. How lucrative. This 2,200-acre spread in Humboldt County does well by doing good. For the past four years, Van Eck's foresters restricted logging, allowing trees to do what trees do: absorb carbon dioxide from the atmosphere. The conservation foundation that oversees the forest then calculated that carbon bonus and sold it for $2 million to individuals and companies trying to offset some 185,000 metric tons of their greenhouse gas emissions. 'Forests can be managed like a long-term carbon bank,' said Laurie Wayburn, president of the Pacific Forest Trust, a San Francisco-based nonprofit that oversees Van Eck. Selling offsets, she said, is like 'writing checks on the account.' In the struggle over how to address climate change nationally and globally, forests play a major role. 'Cap-and-trade' programs set limits on greenhouse gases and allow industries to trade emissions permits among themselves. And they can include provisions for offsetting heat-trapping pollution by investing in woodlands. Offsets are poised for explosive growth. In the next two years, California is expected to roll out a statewide carbon market that might be expanded to other Western states. Nationally, climate legislation recently approved by a key congressional committee would allow U.S. industries to use offsets worth up to 2 billion metric tons of carbon dioxide, part of which could come from forest projects here and abroad. A new climate treaty scheduled to be signed in Denmark in December might allow industrial countries to offset emissions with forest-saving projects in Brazil, Indonesia and other developing nations. But the carbon commodity business is controversial. Critics fear that poorly regulated offsets could hand a get-out-of-jail-free card to heavy polluters. Should a coal-fired power plant in Nevada avoid slashing carbon dioxide emissions by paying to preserve trees in Oregon? Is this a complex trading scheme ripe for fraud? To create trustworthy offsets, California's Air Resources Board two years ago set up the nation's first government-sponsored system to quantify and verify carbon. Those rules are being rewritten for possible use by other states. 'Companies having a hard time meeting their carbon emission limits may want to invest in forestry as a way to cut costs,' said Mary D. Nichols, the board's chairwoman. 'We have hundreds of thousands of acres of forests that can play a role in helping us to prevent global warming.' Forests are central to Earth's climate because, like oceans, they are a carbon 'sink.' Through photosynthesis, trees absorb carbon dioxide, the principal greenhouse gas that is heating the planet's atmosphere. Allowing trees to grow larger before logging increases the carbon stored in a forest. So do widening the forested buffers along streams and clearing out underbrush to allow more space for trees. Reforesting areas abandoned to brush or destroyed by wildfire would also greatly boost carbon stock. 'California leads the world with regard to the role of forests in combating climate change,' said Chris Kelly, California director for the Conservation Fund, a Virginia-based nonprofit that has sold offsets from Mendocino County preserves. 'I just had an inquiry from a Canadian buyer who's expecting Canada to move in the direction set by California.' But so far, big timber operators, including Sierra Pacific Industries and Green Diamond Resource Co., have yet to enroll in California's offsets program. Current standards require owners to agree to a permanent conservation easement, a legal agreement that would guarantee carbon-storage measures in perpetuity. Companies have found that too onerous, and as a result only a handful of woodlands have registered, mainly those managed by conservation groups. For the past 18 months, members of a task force of environmentalists, timber operators and state officials have been locked in negotiations to revise the rules. The new draft, to go before the Air Resources Board soon, substitutes a 100-year contract for the easement, thus allowing development after a century. It also clarifies rules for companies to quantify and verify carbon. At least one environmental group is uncomfortable with the changes. 'By removing the easement, you leave the system open to gaming,' said Brian Nowicki, a forest specialist with the Center for Biological Diversity. 'The timber industry wants `business as usual' practices, like clear-cutting, to qualify for carbon credit.' But groups represented on the task force, including the Environmental Defense Fund, the Nature Conservancy and Pacific Forest Trust, say that century-long contracts and strict accounting rules will guarantee that offsets will be granted only if additional carbon is stored above and beyond conventional forest practices. David Bischel, president of the California Forestry Association, the industry trade group, said he expects more landowners to sign up but cautions, 'It is an opportunity in its infancy: When you add up the numbers, it is not a huge source of revenue.' Nonetheless, he estimates that the state's 14 million acres of private timberland could be managed to sequester twice as much carbon as they do now. And he praises conservationists for acknowledging the need for working forests: 'We've moved on from the old timber wars. This is a win-win.' (Begin optional trim) Among the first companies to jump into the forest carbon market was Pacific Gas & Electric, Northern California's biggest utility. Its 'Climate Smart' program offers customers the chance to pay a tax-deductible surcharge on their bills, averaging $5, to offset electricity use. In two years, 30,400 customers have bought 214,000 metric tons of greenhouse gas reductions -- the emissions equivalent of taking 43,000 cars off the road for one year. At Van Eck, politicians were among the first purchasers: California Gov. Arnold Schwarzenegger and House Speaker Nancy Pelosi, both seeking to offset air travel. Federal forests, which account for more than half of the state's woodlands, are not being considered for trading schemes, although officials are studying how to increase their carbon sequestration. A U.S. Forest Service program invites individuals to offset their carbon footprint by donating to a Carbon Capital Fund to pay for tree-planting. Over the next few decades, however, the state's new standards could allow timber companies to market at least 13 million metric tons of carbon dioxide offsets from private lands, according to the Air Resources Board. (End optional trim) Forest owners can earn far more by full-scale logging or selling to developers. But if offset values rise under mandatory climate regulations, they could offer a counterweight to development pressure. The U.S. annually loses an estimated 1.5 million acres of private forest to urban sprawl. Wedged between a gated community and a tract that shows the ragged remains of clear-cuts, Van Eck is a micromanaged woodland laboratory. 'The biggest cost of meeting carbon rules is labor,' said Wayburn, the Pacific Forest Trust's president. 'You have to crawl over the logs, estimate the carbon by measuring the butt end, and do detailed inventories.' Between giant stumps of redwoods felled in the 19th century, Van Eck's foresters paint turquoise rings around trees slated for cutting. 'We're re-creating a mature forest,' she said. 'We will leave some trees to get 600 years old. But we're also thinning over time because wider spacing leads to an older forest. If you don't harvest at all, you can't restore very well. Fire comes in. Pests and invasive species come in.' Whether California's forests can be recruited to wage a climate war is linked to the eventual price of offsets. And the price that companies will pay depends on the credibility of the offset. 'What is being done on Van Eck can be done across a wide variety of forests,' Wayburn said. 'The challenge of global warming is figuring out whether you've made a difference. Here, you can see that you have.' 