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Energy Efficiency

If A Tree Doesn’t Fall In The Forest, Is It A Carbon Credit?

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It seems like a counterintuitive request to ask landowners in the lumber business not to cut down their trees, but it’s a trend happening across America – and it’s all about carbon credits. Many corporations are pledging to reduce their carbon emissions and greenhouse gasses, but they are discovering that technology limitations (especially regarding business operations like shipping and travel) are making it difficult – if not impossible – to reach their net-zero goals. And this is where carbon credits come into play. Through carbon credits, companies pay landowners to keep trees standing, instead of cutting them down, in order to sequester carbon and thereby helping corporations offset their emissions. 

One sign that carbon credits are becoming a growth market is the increasing involvement by large corporations. Chevron, Disney, and Nestle, for example, are among companies doing off-set emission deals, while Amazon, BP, and Microsoft have partnered in carbon credit programs. Another positive indicator is how this concept has been surfacing across the entire U.S., from Alaska to Maine.

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Beginning in 2013, California was the first (and still only) state with a “cap-and-trade” system, which is designed to incentivize businesses to reduce their greenhouse gas levels by making it more costly for them to pollute over time. This system has subsequently been adopted around the globe.

California allows companies to cover up to 4 percent of their emissions through offset credits, which reflect the captured methane from preserved forests as well as from dairies and mines and the destruction of other ozone-depleting substances. Since California began this program, over 150 million forest credits (each credit representing a metric ton of sequestered carbon) have been issued and U.S. woodland owners have been paid more than $1 billion overall not to cut down trees. 

Carbon credits are a win-win for businesses and landowners. Besides helping corporations reach their carbon-reduction goals, the credits also help businesses tangibly prove their commitments to being environmentally conscious. For the timberland owners, there is the attraction of added income too. For example, the Passamaquoddy tribe in Maine has received over $30 million from its 98,532 acres of forestland; they have used this windfall to upgrade their maple syrup and wild-blueberry operations, open an opiate treatment clinic, and finance a housing program. The money also can provide a safety net when landowners face downturns in their other businesses. 

By helping to reduce greenhouse gases, these credits stand as a “win” for the planet too. Furthermore, old-growth trees hold the added environmental benefit of absorbing more carbon than younger, smaller trees are also more resistant to wildfires due to their thick bark and long trunks. 

The current carbon credit programs, however, are not without their shortcomings. The typical contracts for participants run longer than 10 years. California’s program, for instance, has a 100-year contract that is accompanied by a 140-page book of protocols. Programs’ guidelines and current technology have created an economy of scale situation that favors big woodland owners who have tens of thousands of acreage – even though the US Forest Service estimates that more than a third of American forest lands have individual or family owners whose acreage averages to 66 acres. 

These large tracts of forest, moreover, rarely are near cities, so “urban forests” (woodlands located near population centers) typically don’t wind up being carbon credit recipients even though their survival is imperiled by urban, and suburban, sprawl. 

Thankfully, several organizations have launched emission off-set initiatives to rectify these inequalities. One popular approach centers around banding small landowners together into a large group, thereby making it financially feasible for the proverbial “little guy” to receive carbon credits. Finite Carbon, which has BP’s financial backing, is taking a tech-based approach with its CORE Carbon project, which involves using satellites to measure and model tree growth instead of the standard and expensive (often cost-prohibitive for small landowners) method of having trees hand-measured by “consulting foresters.” 

Cutting-edge technology is also central to the Natural Capital Exchange’s program. In a partnership between the precision forestry company Silvia Terra and Microsoft, the NCE will use satellite imagery (paired with limited in-person measurement) to quantify a forest’s carbon value. NCE also offers a small landowner-friendly one-year contract instead of the typical,  lengthier, carbon credit contracts. 

The Family Forest Carbon Program’s (FFCP) focus is more on land management practices, instead of concentrating on carbon storage values, and the FFCP pays incentives to landowners for following certain practices, like limiting thinning and removing invasive vegetation. This collaboration between the American Forest Foundation and The Nature Conservancy, done with Amazon’s financial support, also utilizes data collected by U.S. Forest Service to create a less static, more dynamic method for carbon capture measurements. 

The Seattle-based nonprofit Forest City Credit, meanwhile, has developed a unique premium credit program geared for organizations with small urban tree parcels. Although frequently more expensive than standard carbon credits, fewer credits are typically needed for urban woodland plots since the acreage is much smaller. Forest City has helped the Allegheny Land Trust to preserve over 150 acres of woods outside of Pittsburgh from being cut down and replaced by housing lots. “We’re losing these trees that are very beneficial to our health and our daily lives,” City Forest Credits director Liz Johnston told the Pittsburgh Post-Gazette. “City budgets are really stressed. There’s a need to find a way to bring out other funding sources to help protect our existing trees and plant and care for new ones.”

Interest has jumped for agricultural carbon credits since the new administration took office in the White House, and discussions have been held involving the USDA to establish a carbon certification program. Because they can sequester carbon through techniques like covering crops, not tilling fields, and land retirements, farmers are an outlet for firms looking to off-sett greenhouse gas emissions. As with woodland owners, carbon credits provide benefits beyond financial ones; carbon-sequestering helps to enrich soil nutrition and serves to control runoff and erosion.  

State governments and trade organizations throughout the Midwest also are working on these types of programs. A carbon trading bill being considered by the Indiana State Legislature would not only provide financial benefits to farmers but also supply the state with revenue to support the President Benjamin Harrison Conservation Trust and Clean Water Indiana.

In central Ohio, the Soil & Water Outcomes Fund, the American Farmland Trust, Nutrien Ag, Ohio Corn & Wheat and Ohio Soybean Associations have banded together for an innovative program that incentivizes farmers in the Upper Scioto River Watershed to adopt conservation routines by offering the chance to sell carbon as well as nutrient water quality credits. “By stacking a water quality credit payment on top of a carbon credit payment, the SWOF is offering significantly more money per acre than the current carbon-only credit payments,” American Farmland Trust’s Mark Wilson explained in the Ohio Country Journal. 

While still in its early stage, the field of carbon credits is growing very quickly. Progressive Farmer journalist Chris Clayton recently stated that the first quarter of 2021 has seen carbon markets go from infancy to adolescence  – and, if it keeps up at that pace, it just might reach adulthood by the year’s end. 

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