Just like carbon programs for crops, do plenty of homework on carbon credits for forestry.
Chris Torres, Editor, American Agriculturist
Most talk on carbon centers on row crops. But with millions of acres of forest in the region, it might be a better option for landowners to think of their forests if they want to take a dive into the growing carbon market.
“It's not right for every situation, but the math is really easy for carbon developers to figure out the value of that forest and to estimate potential future growth,” says Calvin Norman, co-founder of the Forest Owner Carbon and Climate Education program at Penn State.
While carbon crop programs focus mostly on no-till and cover crops, Norman says forest carbon programs focus on carbon credits generated by one of three methods: harvest deferral, reforestation and improved forest management.
Harvest deferral is the most common forest carbon program on the East Coast, he says, and it is the simplest way of determining carbon credits a forest can generate. These contracts require a landowner to keep their forest intact for a set number of years in return for a payment that is based on the amount of carbon sequestered in the trees, not the land. These contracts can last 20 to 40 years, or even longer.
Payments and carbon calculations vary by company selling the program, but Norman estimates they pay anywhere from $6 to $15 an acre, with an average forest sequestering 0.75 to 1.5 tons of carbon dioxide per acre.
Of the 16.8 million acres of forest in Pennsylvania, about 11.5 million acres are privately owned, he says, which makes it a prime market for companies that wheel and deal in the forest carbon space.
But just like carbon programs for crops, companies are the ones that calculate payment and how much carbon dioxide a forest can sequester. This is where a landowner needs to be careful and do their homework, Norman says.
“It's really important that they look at their forest first and figure out, does harvest deferral line up with my goals for the land?” he says. “Does it line up with … what's good for the woods and what's good for wildlife? Sometimes it does, and sometimes it doesn't.”
Is it good for forest health?
One of the unique challenges of East Coast forests is the trees themselves. Most forests are between 80 and 140 years old, as most started growing after the Dust Bowl. Those trees are reaching biological maturity, but they are also being affected by non-native forest pests, such as the emerald ash borer, oak wilt, spongy moss and more.
“All these non-native pests are attacking these trees, and so we’re starting to see a lot of mortality in these stands,” Norman says. “And also, not every tree lives to be … 400 years old.”
This matters because it not only affects the management of the overall forest, but also — depending on the carbon contract — you could end up paying the carbon company if some of your trees die, or if you have to cut some down. Here’s how it works.
“Do we have intentional release?” Norman says. “And so that's when the landowner intentionally breaks the agreement. So, let's say that they clear-cut the land, or they sell it to a developer. The developer knocks the forest down and puts up … a parking lot. That's intentional release.
“And so, in that case, the landowner is responsible for repaying the carbon program, usually with a fee and interest. And then if there's an unintentional release, like a forest fire, high winds or whatever, the landlord doesn't have to pay the program back, but they're now out of the program.”
Do your homework
Bottom line, if a company is interested in your forest and wants to sell you a carbon contract, think long and hard about it. Would you be better served selling the timber and cashing out that way? Will it benefit the overall health of your forest?
“The first thing to do is look at the forest,” Norman says. “You want to talk to your forester and make sure that everything's alright, and you want to talk to a legal professional and make sure that the contract checks off OK, because the lease contracts are rather onerous. I have seen contracts where if there's an unintentional release, then the landlord is responsible, and you'd hate to be responsible for a windstorm.
‘The average payment I've seen is between $6 and $15 an acre — $15 an acre being on the high side from a couple of years ago, and for large properties. So, it's not life-changing money here. We're not talking about that this saves the farm. We're talking about, this might pay some of your taxes.”
