Lending markets

Small forest owners gain a foothold in US carbon markets

New efforts aim to provide smallholders with alternatives to logging while mitigating climate change.

  • 39% of US forest land is private or family owned

  • New carbon credit projects allow only 30 acres to be listed

  • Contract Cost and Duration Barriers for Small Landowners

By Carey L. Biron

WAYNE COUNTY, Pa., Aug. 9 (Thomson Reuters Foundation) – For Sara Velazquez and her husband, purchasing the 55 acres behind their rural Pennsylvania home was the start of a long effort to preserve and resurrect the hilly forest.

The question was how to pay for this work.

“A beautiful forest of healthy oak trees – that’s what I want,” Velazquez, 28, told the Thomson Reuters Foundation in June, sweeping his arm over the property’s shady valleys and stands of mixed trees. .

“We have a lot of invasive species here, so dealing with that is part of our plan over time,” said her husband, Dan Nelson, 37.

However, just after buying the land in 2019, the pandemic forced them both out of work, raising concerns about how to pay annual taxes on the land.

One option could be logging, a common priority in the region, Nelson said.

“It’s a bit of the culture here. When we bought the property, everyone said to themselves: “Are you going to exploit it?” he said, noting that many see timber as “free money in the woods.”

Now they think they have found another solution.

In December, the couple signed a 20-year contract with the association American Forest Foundation Family Forest Carbon Program, which aims to help small landowners with as little as 30 acres do something new: tap into fast-growing “carbon markets.”

The trees on Velazquez and Nelson’s properties will now absorb and store a measured amount of carbon for at least the next two decades.
Credits for this effective reduction in climate change emissions will in turn be sold to help businesses such as outdoor outfitter REI achieve their “net zero” emissions goals.

To meet the targets, companies are supposed to reduce their own emissions to near zero, but can buy emission reductions elsewhere – called “offsets” – to cover any remaining pollution that is hard to reduce.

Velazquez and Nelson, in turn, receive money that helps them cover their tax payments, plan for forest revitalization, and, for now, stay away from logging.

In the United States, the majority of forest land – 39% – is owned by the family, according to the American Forest Foundation, in addition to that owned by the government, forestry companies and other entities.

As such, connecting small landowners to carbon markets has long held promise, said David N. Wear, senior fellow at the Washington-based think tank Resources for the Future.

But the question of how to proceed also arose, given the up-front costs of up to $200,000 for project development, monitoring and more, and the 100-year contracts typically involved.

“Now we’re at a turning point,” Wear said of new efforts to close that gap.

“It’s the emergence of something like agricultural cooperatives: you don’t have the ability to market directly to your buyer as an individual, but you can come together and engage the market as an aggregate. “

These efforts are now poised to be boosted by climate legislation passed this week by the US Senate, which would provide $450 million to nudge private landowners toward management practices, according to the nonprofit American Forests. beneficial for the climate.

The bill places particular emphasis on underserved communities and family forest owners, and would likely bolster programs such as the Family Forest Carbon Program.

If passed by the U.S. House of Representatives, the legislation will “unlock the power of family forests to fight climate change,” American Forest Foundation President Rita Hite said in a statement.

ALTERNATIVE TO EXPLOITATION

For small landowners, these new programs aim to help tip the scales on the value of forests, making standing trees more valuable than harvested timber and, in turn, guiding new management practices.

“The majority of landowners don’t actually say their number one interest is timber, but the majority end up afforesting their land,” said Sarah Hall-Bagdonas, senior forestry officer for the Family Forest Carbon Program, which was launched in 2020 and also helps landowners develop a sustainable forest management plan.

“So the voluntary carbon market really gives them another option in addition to the timber market.”

The voluntary carbon market has more than doubled between 2020 and 2021 to more than $1 billion, according to the Ecosystem Market research group.

That growth could make it seem like “there’s a conflict between carbon management and wood management” as landowners increasingly opt for carbon, said Nathan Truitt, senior vice president. from the American Forest Foundation.

But the two are not exclusive, he said.

“Rather than thinking about harvesting rather than not harvesting, good projects will think about how you adjust harvesting to maximize the productivity of the land…to create more carbon and more wood.”

For now, the financial incentive for carbon storage is not enough to cause harvest reductions, said Jim Hourdequin, CEO and managing director of the Lyme Timber Company, which manages about 1.5 million acres. of forest.

For that to start happening, “the price has to be much higher than the current carbon price,” he said – around $30 to $60 a tonne, or two to three times the current price.

‘ALL OWNERS’

Across Pennsylvania from Wayne County, Raul Chiesa and Janet Sredy own and manage Beckets Run Woodlands — 110 acres that belong to Sredy’s family but have long suffered from poor farming and management practices, it said. she declared.

Since 2007, the couple have worked to resurrect the country’s forests, manage wildlife and save rare plant species like the snow trillium, which blooms when snow still covers the ground.

The work costs about $10,000 a year, funded by grants, timber harvesting, hunting leases and other revenue streams – now including carbon sequestration.

Chiesa and Sredy are working with a company called NCX, which uses satellite imagery and artificial intelligence to assess the potential for carbon storage on small landholdings. It then sells carbon credits, with the revenue helping landowners postpone logging for a year at a time.

Since last year, the company has recruited nearly 2,500 U.S. landowners who own more than 4 million acres, with a median size of about 200 to 400 acres per owner, he said.

“If our societal goal is to mitigate climate change and enable climate storage on land rather than in the atmosphere…we will need to enable all landowners to participate in the carbon market,” said Jennifer Jenkins , Director of Sustainability at NCX.

Long sequestration contracts can be barriers for small landowners participating in carbon storage efforts — but shorter contracts can help take immediate action to protect forests, she said.

“It’s too late if we wait 99 years,” said Jenkins, who noted that NCX hopes to extend its one-year contracts to two to five years.

The reviews, however, question the approach climate impact.

Chiesa and Sredy, who first started thinking about carbon sequestration a decade ago, signed with NCX in January, and in December they should receive just over $1,400.

They can then re-register, although the duo plan to compare timber and carbon prices first.

So far, the process has deepened their appreciation of the trees on the property — and Chiesa said the carbon credits look like a real opportunity.

“It’s the conservation enterprise that is supported, supported by a different type of economy…other than conventional forest products. It’s something absolutely new,” he said.

Related stories:

“The Woods Next Door”: America’s Community Forests Take Root

In the southern United States, a forestry project helps black families keep their land

The carbon markets we trust? New global guidelines aim to end greenwashing

(Reporting by Carey L. Biron; Editing by Laurie Goering: (Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters. Visit http://news.trust.org/climate)

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