The US discovers forest markets...
Defining how a forest can generate carbon credits could be the one landmark agreement coming out of the UN climate talks in Copenhagen.
The goal of negotiations in Copenhagen will be to create a forestry carbon offsets protocol, designed to incentivize developing countries like Indonesia and Brazil to stop cutting and burning rainforests.
Valuing this “avoided deforestation” is crucial to any global carbon offsets program, says Dave Tenny, CEO of the National Alliance of Forestry Owners, NAFO. “If you simply look at our contribution in carbon today, it’s fairly telling,” he says.
By some estimates, destruction of the developing world’s rainforests now accounts for about 17 percent of all global emissions.
The planet has between 8.4 and 10 billion acres of forest land. Of that, the US has about 750 million acres, with about 500 million acres in private hands among 10 million owners, according to the NAFO.
The NAF0's 58 members, ranging from landowners with 100-acre wood lots to diversified forestry firms like Weyerhaeuser Company
and Potlatch Corp.
control about 75 million acres, or 10% of US forests.
“The bottom line is we are focused on international forests because that’s where the intensity is,” says Jeff Horowitz, co-founder of Avoided Deforestation Partners, an organization promoting the role of the world’s forests in stopping climate change.
Horowitz is quick to add that it is “legitimate” to also look at US forests, even if they don't offer the same scale of emissions benefits as.
Nevertheless, some say the US market will play a critical role in fighting global climate change as well as the creation of a domestic cap-and-trade market for carbon.
“We’ll see a tremendous use of forestry and forestry protocols in the US,” says EKO Asset Management Partners’ founder Ricardo Bayon, whose firm specializes in monetizing environmental assets like carbon offset projects. “If you think of how the carbon market develops in the US, you can’t see how the lion’s share won’t come from (forestry).”
Bayon estimates that forestry management efforts worldwide now account for some 8% of global carbon emissions offsets.
To date, the main obstacle in using forests for carbon offset projects has been in defining forest “management” and in ongoing monitoring of that management to ensure the carbon is properly sequestered.
The Climate Action Reserve—an organization that establishes “regulatory-quality standards for the development, quantification and verification” of emissions reduction projects in North America—is working on defining eligible forestry projects that would capture and sequester carbon emissions, thus creating offsets.
EKO’s Bayon sees a lot more activity in this sector, pointing out at least three forestry offset projects have been approved in the US, and another three that have been submitted for approval to groups like the Climate Action Reserve.
“We have a feeling there are a lot more in the pipeline,” he says, adding that his firm is currently raising a fund to invest in these projects. “Behind that, there are at least another half-dozen.”
Offset-worthy forestry management efforts include reforestation of previously harvested forest lands, “aforestation” or planting trees on non-forest lands, and “avoided conversion” that keeps forest lands from being harvested then used for other purposes.
NAFO’s Tenny says efforts that lengthen the rotations between harvests for a forest should also be considered, since “only a tiny fraction is harvested every year,” and that they should analyze the benefits of carbon sequestration “on the stump and in long-lived forest products” like lumber and other wood-based construction materials.
When it comes to products like lumber, the issue of who owns the credits—the sawysawerer or the buyer—gets dicier. So far, discussions point to the landowners getting the carbon credits for the forest projects.
While it may seem like lumber and paper firms will be the beneficiaries of this, very few of these firms still own forest resources, having divested such assets because of an unfavorable tax change
Weyerhaeuser, however, still owns potential carbon-credit-generating forest lands, as well as carbon liability operations in papermaking, lumber and housing development arms.
“We’ll be regulated under cap-and-trade but we’re a source of credits under cap-and-trade,” says company spokesman Anthony Chavez.
He agrees with Tenny that credits should stay with the landowner—Weyerhaeuser owns 6 million acres of forest—but concedes that the final determination on that is still “up in the air.”
The other main obstacle of the past, monitoring, has been overcome by new technology. Experts, for instance, cite the advent of software like Google
Earth in making global monitoring quicker, broader and cheaper.
Another key change has also taken place--awareness and appreciation. It's well past the days of treehuggers.
“We can’t tell people to stop driving cars and trucks. But we can stop deforestation,” says Horowitz,“The value is in the carbon.”