This document provides a detailed report and recommendations of the 2010 Forest Carbon Work group to the Director of the Department of Ecology and the Commissioner of Public Lands. The recommendations relate to the critical role Washington’s forest lands will play in addressing the challenge of climate change; appropriate responses to pressure for conversion of working forest lands to non-forest uses; and the role of ecosystem service markets, including carbon offset markets, and other incentive systems in bringing about desired results. The 2010 Work group included some members of a similar 2008 Work group and built on the results of that 2008 effort. The report appendix contains purpose statements by each participating interest, explaining its rationale for participation. In light of the 2010 Work group emphasis, this document focused on three topics: Forest carbon considerations in avoiding forest land use conversion; incentives to reward forest landowners for providing ecosystem services, including carbon storage and improvement of forest health; and features of forest carbon offset protocols and registries that are appropriate for use by forest offset project developers in Washington State.