Tree Farmers May Profit from Climate Regulation

10/22/2009

Some airlines are starting to do it. Some Northwest ski resorts, too. Not to mention event organizers. They're inviting people like you to pay a little bit extra to offset the global warming pollution resulting from an activity such as a trip. A carbon offset is a bit like an indulgence — a polluter pays someone else to remove an equivalent amount of global warming gases from the atmosphere. In our region, private timberland owners, farmers and some tribal governments are dreaming dollar signs. But what are you really buying with an offset? KUOW's Tom Banse looks into that.

Tree farm owner Ken Faulk is the first to sign a contract with a new company called Woodlands Carbon, based in Salem. The company's business plan is to combine small timber holdings in Oregon and Southwest Washington into larger pools for the purpose of selling carbon credits.

Faulk: "A woodland owner on their own isn't going to produce enough credits to sell to a corporation, to interest a corporation."

Faulk enrolled 140 acres in the Willamette Valley foothills south of Corvallis. The deal is his tree farm soaks up carbon dioxide. He promises to manage the stands sustainably, but he's allowed to periodically log. Faulk bought this land to supplement his and his wife's retirement.

Faulk: "I don't play golf, I manage trees. We spend a lot of time and enjoy ourselves in our own forest."

The wind sighs in the treetops as we go for a walk, dodging raindrops and paper–plate sized maple leaves spiraling to earth.

Faulk: "Looking right here, I can see pacific madrone, Oregon ash, Oregon white oak ..."

Faulk calculated growth rates for the patchwork of different tree species and ages on his land. A formula he got from the Forest Service tells him how much carbon dioxide his trees suck from the air. He says he doesn't expect to get rich from packaging each year's growth into a carbon credit or offset.

Faulk: "I think at three dollars a ton (of carbon), now that I know what my forest is producing, will just about pay for my property tax and my fire liability insurance."

In the Northwest, fossil fuel based power producers have paid for truck stop electrification along I–5 and a methane digester at a dairy farm. Carbon credits like those are largely bought and sold on a voluntary basis in the United States. Across the Atlantic, European governments have mandatory limits on global warming emissions. Joachim Hein monitors the trading of allowances and credits for the Federation of German Industries. He doubts his member companies would be interested in buying forest carbon offsets from us.

Hein: "Scientists keep telling us the methodologies are not yet right. And what about liabilities if a tree is burned down? Or what about the monitoring issues around these credits? So all in all, [there's] rather limited potential for land use change credits."

Woodland owners propose to address the threat of fire or windstorms — or bug kill for that matter — by holding a percentage of each tract in reserve and not collecting money on it. But a bigger question bedeviling carbon offsets from forestry and farming is whether buyers are paying for something that would have happened anyway.

Adair: "It almost requires trying to read somebody's mind. What would you have done but for this?"

Janice Adair is working on rules to make sure offsets produce real and verifiable results. She's with a consortium of states and provinces called the Western Climate Initiative. In the long run, this messy task will probably fall to the federal government. But in the meantime, your new vocabulary word of the day is "additionality."

Adair: "It needs to be something that will capture additional greenhouse gas emissions — reductions that would happen in addition to what would have happened anyway. That is tough to point out or really be able to quantify in some industries."

Some big offset sales that have happened so far might not meet that test. For example, last year the Chelan County Public Utility District netted about $1.7 million from selling credits on the Chicago Climate Exchange. The credits were tied to upgrades to Rocky Reach Dam on the Columbia River. The dam now pumps out more non–polluting hydropower. But the utility makes clear the turbine upgrades were going to happen regardless.

Back in the Willamette Valley foothills, tree farm owner Ken Faulk also doesn't plan on doing anything differently if he sells carbon credits.

Faulk: "We keep hearing the term 'business as usual.' We are doing business as usual because we are doing good things. We are doing the best we can. That is what business as usual is for us."

Faulk says he doesn't want to sell his timberland. The carbon credits would make it easier to hold on.

Faulk: "There's so many pressures to sell our land and turn it into vineyards, or parking lots, or subdivisions or whatever. Something like this is going to help out woodland owners that I think need some help right now. We're just losing too much forestland."

Faulk acknowledges his credits might not pass muster in a federal carbon market. But he's hopeful a Northwest corporation or utility might value family woodlands enough to be interested in order to meet some self–imposed goal.

It's not just small landowners that are getting in the act. In northern California, timber company Sierra Pacific recently announced it would market the carbon soaking abilities of 60,000 acres of its vast holdings. Some offsets it hopes to sell will be tied to logging more conservatively and others to permanent protection for a stand of giant sequoia trees. I'm Tom Banse near Monroe, Oregon.