In reference 40, Goetz and Dubayah summarize both aircraft and satellite imaging techniques. They also explain how tree canopy height is measured.
Tree canopy height is measured by light reflectance. First, a laser on a satellite (in this case, NASA's Geoscience Laser Allometry System, or GLAS) is emitted and pointed at the surface of Earth.
The light from the laser reflects off of Earth's surface and is then received by the satellite. The time that it takes for this to happen can determine the distance from the satellite to Earth's surface.
When the laser is emitted over a forest, the tree's leaves and branches reflect the energy, yet some of the laser's energy will still reach the ground and will be reflected from the surface of the soil.
Thus, the satellite receives two main light reflectance measurements: reflectance from the ground and reflectance from the tree canopy.
Then, the difference in the time it takes for the ground reflectance and canopy reflectance light to reach the satellite determines how tall the trees are.
For more information, check out Figure 2.
For Hansen and colleagues' study, they decided that any plant that had a canopy height of 5 m or taller was a tree (rather than a shrub or herbaceous plant).
Thus, determining canopy height is an important step in processing the satellite images to find where forests are distributed around the world.