Landowner Incentives to Increase Forest Net Carbon Stores

By Thembi Borras

This post explores the answer to the following question: What mechanisms encourage landowners to minimize forest loss, increase forested areas and temper forest harvest?

A market for ecosystem services, such as clean air, clean water and carbon storage is inevitable. The Chicago Climate Exchange (CCX) is one such infrastructure. CCX members agree to reduce their overall carbon dioxide emissions by 1 percent per year. Members who reduce their emissions by more than 1% per year can sell the difference as "carbon credits" to other members who pay a price to pollute.

Businesses based in the US have little incentive to join the voluntary cap and trade market, as they are not required to reduce emissions. Consequently, domestic prices remain as low as $4/ton of carbon. In Europe however companies required to reduce emissions per the, now in effect, Kyoto protocol are trading and carbon dioxide emissions credits have increased to $32/ton of carbon. European markets do not presently include the forest sector. However, it is feasible that, in the future, landowners could join the market by selling the carbon stored in their forest as an ecosystem service to companies that don't meet the carbon emissions reduction targets.

Apart from the slow pace the federal government is taking, within a couple of years, the State of California may adopt a market-based cap and trade strategy to implement Governor Schwarzenegger's greenhouse gas reduction goals for the State, within which the forest sector may be included.

The value per ton of carbon would need to reach $20 for landowners to be economically enticed to participate in the carbon market. If the value per ton of carbon reached $100, storing carbon would directly compete with returns from development and short rotation timber harvest.

Other economic mechanisms include consumer preference for forest products from well-managed forests (e.g. Forest Stewardship Council certified), land use laws (e.g. urban growth boundaries), education, performance-based regulation, global fair trade laws and a vibrant timber industry infrastructure (loggers, truckers, mills etc.).

More difficult to convert into economic terms are aesthetics and the deep connection to the land that many landowners exhibit which also inspires a well-managed forest that supports carbon storage and associated values.

A portion of this production was gleaned from Forest Carbon in the United States: Opportunities and Options for Private Lands a publication offered by The Pacific Forest Trust, a 08-01-05 article entitled Free Market, Cleaner Air written by Marianne Lavelle, Michelle Passero of the Pacific Forest Trust and a 08-01-05 article entitled Morgan Stanley, Citadel Chase Profit in Pollution-Rights Trade by Adam Levy.

The Relationship between Carbon Storage and Forest Disturbance

By Thembi Borras

Forests have tremendous potential to meter carbon dioxide emissions. Carbon is stored in forests until carbon is transferred back into the atmosphere through some sort of disturbance, such as forest loss, forest harvest or natural disturbance.

The scale of forest loss is more significant globally and nationally than it is regionally. Nonetheless forest loss is occurring regionally and has serious implications, 2% of existing forest and rangeland in the Klamath/ North Coast bioregion, which includes Mendocino County, will become, at a minimum, a rural residential neighborhood by the year 2040. If Mendocino County were considered individually, this figure would likely be higher given our proximity to the Bay Area. Statewide this figure is 10%. Part of the reason for this shift in land use is it can be more profitable to treat forestland as real estate than it can be to manage it. Shifting land use does not necessarily equate to forest loss but may lead to forest loss as it continues to do in Lake Arrowhead. In Lake Arrowhead, a Southern California forested neighborhood, bark beetle afflicted trees continue to be removed to reduce fire hazard and improve safety.

The amount of stored carbon is reduced at the time of harvest. When a tree is harvested, approximately 1/3 of the carbon is stored in the final product, for example, dimensional lumber and plywood. The remaining 2/3 is lost to the atmosphere, 1/3 of which is lost within 5 years, and the other 1/3 over time through decay. Stands at age 35 have 70 tons per acre of tree carbon. Stands at age 70 have more than double that, 194 tons per acre.

The amount of stored carbon is also reduced when harvest exceeds growth. Since the 1980's, growth in California has exceeded harvest. However, taken from 1996 data, nationally harvest exceeded growth.

Preventing forest loss, increasing forested area and forest management that increases forest age, increases growth relative to harvest, fosters a disease and fire resistant forest, has integrity, supports biodiversity and is economically sound can increase net carbon stores.

These strategies may be supported by performance based regulation, market incentives, land use laws, education, carbon credits, global fair trade laws and a functioning timber infrastructure.

A portion of this production was gleaned from The Changing California: Forest and Range 2003 Assessment for California from the California Department of Forestry and Fire Protection and Forest Carbon in the United States: Opportunities and Options for Private Lands a publication offered by The Pacific Forest Trust.