The objective of this project is to discuss the role of forests in Nordic countries in climate change mitigation and discuss the possible roles of forests as a part of a cost-effective climate policy. The report aims to provide a comprehensive and easily digestible way to better understand the issue. The report includes a discussion on the role of forests for enhancing carbon stocks and carbon sinks in the Nordic countries. The extent of above- and below-ground biomass and their role as forests carbon sinks in Nordic forests is analysed. The use of wood in products, buildings and as bioenergy is examined. Finally the report presents emissions trading schemes from around the globe that allow offsets and credits from forest projects on them and provides an analysis on the feasibility of such a scheme for the Nordic region. The report has been commissioned by the Working Group on Environment and Economics under the Nordic Council of Ministers. The study was carried out by Indufor.