Not Out of the Woods Just Yet

The author in an old growth forest in Montville with a big (carbon-rich!) tree. Photo by Nelson Sánchez Oyarzo

Resources About Carbon Offsets

The Nature Conservancy Makes a Bet on Carbon,” by Forests for Maine’s Future, Aug. 23, 2018

A Landowner’s Guide to Carbon Offsets,” by EcoTrust

Vermont Forest Carbon: A Market Opportunity for Forestland Owners

By Hannah Murray, Low Impact Forestry Specialist

The special report on global warming released in October by the Intergovernmental Panel on Climate Change (IPCC) does not make for comforting bedtime reading. The report outlines the devastating potential impacts of a 2 degree Celsius temperature rise above pre-industrial levels and lays out the drastic measures necessary to avert catastrophe that will otherwise come in just 12 years. With proposed scenarios focusing on technological solutions that have yet to be proven at scale (fingers crossed!), and the recognition that a lack of political will may be the greatest barrier of all, the report sounds an urgent, dire warning. Hardly the stuff of sweet dreams.

Due to its focus on high-tech carbon dioxide removal solutions (e.g., injecting carbon dioxide emissions underground in depleted oil and gas fields), the report does not pay as much attention to the role that healthy forests and improved forest management can play in the planet’s future climate. In a response letter to the report, forty scientist signatories affirm just that: “Limiting global warming requires protecting and sustainably managing the forests we have, and restoring the forests we’ve lost. While high-tech carbon dioxide removal solutions are under development, the ‘natural technology’ of forests is currently the only proven means of removing and storing atmospheric carbon dioxide at a scale that can meaningfully contribute to achieving carbon balance.” 1

Let’s take a closer look at that “natural technology.” Through photosynthesis, forests currently remove about a quarter of the carbon dioxide that humans add to the atmosphere. As trees grow, they convert carbon dioxide into carbon (C), which they store in their wood. Northeast forests sequester 1 to 2 metric tons of carbon per acre per year. According to data from the USDA Forest Inventory and Analysis (FIA) program, the amount of aboveground carbon in Maine’s forests increased by almost 5 percent between 2004 and 2012. With 89 percent forest cover, Maine has a lot of trees – 17.6 million acres – earning it distinction as the nation’s most forested state. With New Hampshire a distant second place (77.5 percent forest cover) and Vermont in fourth (75.7 percent), northern New England is well positioned to mitigate global warming through natural climate solutions such as forests.

Perhaps that’s why this region has been a leader in the evolving carbon offset markets that reward landowners for sequestering carbon through improved forest management. In 2012 Maine’s Downeast Lakes Land Trust completed the first U.S. project to sell forest carbon credits to the compliance (aka California’s cap-and-trade) market. Thanks to the $1.5 million profit earned by selling carbon credits on the nearly 20,000-acre property, the group was able to purchase additional land to further its conservation goals. The sale of carbon offsets has enabled other conservation groups to generate revenue to support land and forest management objectives as well. Maine pioneers who have developed carbon offset projects since then include The Appalachian Mountain Club (10,000 acres), the Passamaquoddy Tribe (98,000 acres) and most recently The Nature Conservancy’s 124,000-acre project in the St. John Valley, completed in June.

In July, Vermont registered its first carbon project (Burnt Mountain), a 5,500-acre parcel owned by The Nature Conservancy. The group anticipates it could receive up to $2 million in carbon revenue over 10 years.

The experience of these groups has proven that New England landowners can receive compensation for managing forests to store carbon. To produce enough offsets to be financially viable, however, parcels must be at least 5,000 acres. The high project registration expenses and long-term compliance requirements (e.g. annual monitoring, regular verification, forest inventory) are prohibitive and do not make financial sense at smaller scales. Since aggregation is not permitted in the compliance market, multiple small landowners cannot pool individual parcels to meet minimum acreage and sell carbon credits together.

Where does this leave small woodland owners? Do opportunities exist to participate in carbon offset markets? The answer is a qualified “yes.” While the compliance market is out of reach for the reasons noted, the voluntary market presents a more accessible and viable alternative. It has fewer barriers to entry, a shorter commitment period (offsets must be maintained for 40 years instead of 100) and – most promising – welcomes aggregation. While the financial rewards are not as high (voluntary offsets sell at a much lower price than those in the compliance market – $3 to $6 per ton versus $10 to $15), the voluntary market offers smaller landowners something that the compliance market does not: access.

Aggregation has emerged as the cornerstone to unlocking carbon markets for individual woodland owners. The New England Conservation Pathways report notes that aggregation makes forest carbon projects “more viable in parts of New England where forest ownerships are more fragmented, but no less valuable from a carbon perspective.” 2  In addition to reducing transaction costs for individuals, aggregation allows for innovative arrangements between landowners and conservation organizations. A project between a private landowner and the Lakes Region Conservation Trust in New Hampshire was slated to be the first to aggregate multiple landowners into one carbon project.

Across the country, some organizations are testing the waters with aggregation. The Nature Conservancy’s Working Woodlands program provides private landowners in Pennsylvania, New York and Tennessee with technical and financial assistance to remove barriers to accessing forest carbon markets; minimum property size is 1,500 acres. In the Pacific Northwest, the Pinchot Institute is working with family forest owners on a pilot project to aggregate holdings between 70 and 4,000 acres; the majority of parcels are less than 250 acres.

A University of Vermont study published in March identifies aggregation as a promising opportunity for Vermont forestland owners and conservation organizations, concluding that individual properties must be at least 200 acres to be financially viable. The Vermont study also explores non-market incentives and the possibility of integrating forest carbon management goals with federal and state incentive programs.

While the road ahead is still uphill, the extent of forestland and carbon market expertise in New England suggest great potential for developing forest carbon projects in the region. According to U.S. Forest Service data, Maine’s forests already store 1.47 billion metric tons of carbon. As Mark Berry of The Nature Conservancy explained at Forest Carbon Day at this year’s Common Ground Country Fair, a 1 percent increase in Maine’s total forest carbon could sequester three times the total carbon dioxide emitted from fossil fuel use in the state. Yes, it is critical to reduce fossil fuel emissions – but let’s not overlook the significant role that forest management must play as well.

Family forests in Maine comprise over 5.6 million acres, or 32 percent of the state’s forestland (FIA, 2013). Time will tell whether aggregation will be able to provide viable opportunities for smaller landowners to participate in carbon offset markets. Meanwhile MOFGA’s Low Impact Forestry program is committed to exploring whether and how Maine woodland owners might access market and non-market incentives for managing their woods to sequester carbon and mitigate the effects of climate change.

As we start to lay the groundwork and collect baseline data, we’d love to hear from you. How much land do MOFGA’s 10,000 members own, and how much of it is forested? What is the average parcel size? How much carbon is being sequestered on that land? (We can help you figure that out.) Has the land been harvested? Is a management plan in place?

Watch for a survey on these issues this winter at mofga.org/forestcarbon (coming soon), and please contact [email protected] if you’d like to join us as we dive more deeply into this issue. We may not be out of the woods yet in regard to averting climate disaster, but it may be that in the woods is precisely where we need to be.

1 Excerpt from “Five Reasons the Earth’s Climate Depends on Forests

2 “New England Conservation Pathways: A Survey of Emerging Conservation Finance Strategies,” Highstead, 2017

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