Living on Credit

Forest landowners are beginning to turn carbon to cash
carbon trees

Forest landowners are beginning to take advantage of emerging carbon credit markets while scientists confirm details of the forest carbon cycle. (Photo: Eppic Photography)

As Arctic ice thins, sea levels rise and glaciers recede, Ken Faulk takes stock of his trees in the Oregon Coast Range. Last summer, he began measuring his stands of Douglas fir and white oak by pounding plastic pipes into the ground to mark the centers of circles nearly 30 feet across.

Working steadily in the soft twilight under the forest canopy, he recorded the height and diameter of every tree in each circle. It took him five days to cover 40 acres, but Faulk didn’t mind. He regards trees with the experienced eye of a man who loves the woods. “I saw old friends I hadn’t seen in a long time, trees I remembered, that I had taken an interest in. It was of value to me for that alone,” he says.

He sent his data to Oregon State University forest modeler Greg Latta, who analyzes carbon offset policies for the U.S. Environmental Protection Agency. Latta calculated that Faulk’s Douglas firs, planted in 1980 by a previous owner, were growing fast enough to absorb more than five tons of carbon per acre annually, an amount equivalent to that generated by a car driving more than 35,000 miles.

Faulk’s forest isn’t unusual. The process, known as carbon sequestration, occurs everywhere that plants grow. As they absorb carbon dioxide from the air during photosynthesis, trees store part of that carbon in branches, stems and roots. Not all species are alike. The oaks come in a poor second to the firs, and on Faulk’s land, they absorb only about one ton per acre.

An OSU College of Forestry alumnus and the son of a Tacoma millworker, Faulk has seen the woods from every angle – independent logging contractor, Weyerhaeuser forester, Oregon Department of Forestry inspector and now president of the Oregon Small Woodlands Association. The nonprofit organization’s 3,000 members own about 16 percent of Oregon’s 30.5 million forested acres. With help from OSU Extension, the American Forest Foundation and other organizations, OSWA has created a company, Woodlands Carbon of Salem, Oregon, to create access to carbon sequestration markets.

By the end of December, Woodlands Carbon had signed up 11 landowners who agreed, like Faulk, to tally the tons of carbon being sequestered by their woodlands. More importantly, according to OSWA’ s Mike Gaudern, it had assembled nearly 20,000 tons of carbon credits and was seeking buyers for them. Unlike with other commodities – two-by-fours or bags of wheat – you can’t take a ton of carbon home and put it in the garage. But by paying landowners to lock carbon away in the woods for a period of time, buyers can offset their own carbon emissions.

“We need to look for ways forest resources can mitigate or ameliorate undesired climate change.”

— Hal Salwasser, Dean, College of Forestry

The hope is that carbon credits can provide a boost to financially struggling landowners who are facing growing pressure to convert their lands to other uses. If Gaudern and Faulk succeed, they won’t be the first. Such deals have already been struck in California, Michigan and elsewhere in the Pacific Northwest.

An Appetite for Carbon

Oregon has long been the nation’s mother lode for softwood lumber, but if carbon sequestration is the goal, Faulk and other forest landowners are in the right place. OSU researchers have determined that forests here are among the best in the world for absorbing carbon dioxide, the gas linked to global warming. Old-growth stands in the Coast Range and west side of the Cascades store as much or more carbon than tropical rain forests, according to studies by OSU forest scientists Mark HarmonBeverly Law and their students. Moreover, Law and her team have found that there is enough capacity to theoretically double the amount of carbon currently stored in forests stretching from San Francisco to the Columbia River.

“Many of the mature and old forests are on public lands, so they are uniquely positioned to act as carbon reserves,” Law told a U.S. Senate subcommittee chaired by Oregon Senator Ron Wyden November 2009.

To Faulk, more capacity for carbon means opportunity. “Scientists are telling us we need to draw the carbon dioxide level down as quickly as we can,” he says. “And that’s what we’re aiming to do here. Whether we can find some buyers who will accept that concept is our next challenge.”

It is just one of many hurdles confronting forest owners and scientists who are still coming to grips with what it might mean to put a price on forest carbon. At present there is little consensus. While professional forestry groups develop standards for inventorying carbon, economists are highly skeptical that, without national carbon emissions limits, carbon-credit markets can work. Forest ecologists are evaluating the carbon consequences of forest management practices and have barely begun to consider the influence of a changing climate. And forest products engineers have shown that wood can both store carbon for long periods and reduce carbon emissions by replacing other energy-intensive building materials such as concrete and steel.

Global Accounting

“If you’re going to make policy decisions to reduce carbon emissions and to mitigate by picking up carbon on the land, you need to measure these processes and ask, ‘Are we even coming close to what we think is going on?’” says Law, a Professor of Global Change Forest Science. “‘What is the ultimate effect on the atmosphere across the globe?’ That’s a big task.” (Note: Law is a member of a National Research Council committee that released a report, Verifying Greenhouse Gas Emissions, March 19. Download a PDF of the report here.)

Law seems undaunted by big tasks. In 1996, she joined scientists planning a new national network that monitors the exchange of carbon dioxide between forests, shrublands and other biomes, with the atmosphere. The goal was to track carbon flows across the country – from the maple, spruce and fir of New England, to the Ponderosa pine and aspen of the West. She suggested that sensors needed to be standardized and calibrated regularly so that data could be compared and analyzed nationally. “I spoke a little too much and became the science lead,” she says, a position she holds today for the international AmeriFlux network. Law also advises climate science programs run by the federal government and the United Nations.

Closer to home, she and her OSU colleagues manage three AmeriFlux sites in Oregon – two west of Sisters and another on land owned by Starker Forests Inc. along the Marys River near Philomath. They complement atmospheric carbon dioxide concentration measurements at three other locations – Newport, Marys Peak and Burns – that capture changes as air flows from the coast to the Great Basin.

Hardly a molecule moves at AmeriFlux sites without being detected. Instruments monitor weather, sunlight, heat and moisture. They track carbon in the soil, water, atmosphere and even water flowing through tree sap. Data flow every half-hour via cell-phone networks to Law’s lab on the Corvallis campus where she and her team monitor the instruments. They use the data to calibrate computer models that evaluate how carbon dioxide flows in and out of the forest and how carbon remaining in the forest changes at local, regional and national scales. Scientists will need such models to achieve the most ambitious result of the recent climate talks in Copenhagen: a program to cut carbon dioxide emissions in half by 2050 and to reduce carbon emissions from deforestation and forest degradation, particularly in tropical rain forests.

Meanwhile, the OSU professor and her collaborators have produced groundbreaking studies of Pacific Northwest forests. Some of their findings:

Fires produce less carbon emissions than previously thought. Even in a high severity fire, only about 10 percent of above-ground live carbon stocks are burned. About 60 percent of burned carbon comes from litter on the forest floor, underlying duff and mineral soil, and most of the rest comes from snags and other dead material. Less than 1 to 3 percent comes from the trunks of live trees, somewhat lower than the fraction commonly used by scientists who produce national estimates of fire emissions.

Like all living systems, forests constantly send carbon dioxide back to the atmosphere, but most of it, about 70 percent on average, comes from the soil (roots and microorganisms), not tree stems and foliage.

Still, most forest carbon is stored in the soil, and 15 to 25 percent of soil carbon is long-lasting fire-produced char.

Disturbance

When it comes to carbon, Mark Harmon describes the forest as a leaky bucket. As carbon pours into the bucket through photosynthesis, it constantly leaks out through other processes, mostly decomposition and respiring plants and microbes.

It’s no different, he adds, than a bucket of water. “People tend to think that a leaky bucket can’t hold water. Well, that’s not true at all. It can, and it does. As long as there’s something coming into the bucket and the leaks aren’t mammoth, some water will accumulate. The more you pour in, the higher it will rise. The more holes you have, or leaks, the more it will go down.”

The holder of the Richardson Chair in forestry has specialized in two parts of forest carbon cycle: dead wood and the disturbances that produce it. Logging typically leaves large amounts of branches and other unsaleable material on the forest floor. In past years, much of this so-called slash was burned to “clean” the site. Harmon’s research has showed that as this wood decays, it fertilizes the regenerating forest. Leaving slash on the ground not only benefits young trees, it saves money by eliminating unnecessary work.

However, decomposition sends carbon back into the atmosphere. Harmon and Law have shown that for 15 years or more, the amount leaving a harvested site outpaces what young trees can absorb. Eventually, rapidly growing trees catch up and reverse the flow, resulting in the high rate of carbon sequestration that is occurring in Ken Faulk’s forest. But, says Harmon, forests must go through a massive carbon release before they reach that stage. “You just can’t get to the mountain peak without going through a valley,” he adds.

Harmon and colleagues demonstrated this process in a landmark study published in the journal Science in 1990. In the late 1980s, some scientists had proposed replacing old-growth forests, thought then to be stagnant, with carbon-hungry youngsters that would take more carbon out of the atmosphere. Together with OSU colleague William Ferrell and Jerry Franklin of the U.S. Forest Service, Harmon reported that replacing old-growth with young stands would in fact pump more carbon into the atmosphere, even accounting for the carbon stored in wood products. It could take at least 200 years, they concluded, for the regenerating forest to store as much carbon as the old-growth.

“You look at a tiny young forest and a massive old forest and ask which one stores more carbon. It doesn’t take much to figure this out, although it’s taken some people a really long time,” Harmon says. It’s an argument that continues to the present day and has continued to motivate research by Harmon and his students on tree mortality, decomposition and the carbon consequences of harvesting systems.

Green Wood

The carbon story doesn’t begin and end in the forest. In fact, the benefit of wood as a “green” building material goes beyond its ability to sequester carbon. It also serves as an alternative to more fossil fuel-intensive products such as aluminum, steel, concrete and plastic. “If you don’t look at what it’s displacing, you miss a big part of the story,” says Jim Wilson. “You have to look at the whole life cycle.”

For the last decade, the OSU wood scientist has worked with a national organization, the Consortium for Research on Renewable Industrial Materials, or CORRIM, to follow the carbon trail for wood and other industrial materials from cradle to grave. With public and private funding, CORRIM has conducted life-cycle analyses of wood products industries across the country, from softwood lumber and plywood in the Pacific Northwest and South to hardwoods in the Northeast. It has analyzed wood flooring, particle board, laminated timbers and even the adhesive resins used in engineered wood products.

A 2009 CORRIM report, Maximizing Forest Contributions to Carbon Mitigation, notes that harvesting trees more slowly to increase carbon storage in forests would be counterproductive. That’s because a smaller supply of wood products would lead builders to substitute materials that require more energy to produce, thus leading to larger carbon emissions from fossil fuels. Over time, according to the CORRIM model, the use of wood to displace other building materials keeps more carbon out of the atmosphere than would be solely stored in the forest ecosystem itself if no harvesting was done.

To reach that conclusion, Wilson and his colleagues compared typical wood-frame houses to homes built with steel framing and concrete blocks. They also assumed that wood would come from “sustainably managed” forests, not old-growth. “If they aren’t sustainable, it’s not going to work,” Wilson adds.

“The CORRIM study suggests that when we take a comprehensive look at building materials, including total energy consumption, global warming, air and water emissions and solid waste disposal, wood turns out to perform better in most categories,” Wilson says in a 2009 report, Building to Benefit the Environment, by the Oregon Forest Resources Institute.

Pork Bellies

Andrea Tuttle, board member for the nonprofit Pacific Forest Trust (PFT), put it bluntly in a recent public radio interview: “Anything you can do with a pork belly, you can do with forest carbon, in terms of cash sales, derivatives, hedge funds, portfolio mixes. It’s a legitimate product now.” The trust has arranged to sell carbon credits from a mixed redwood and Douglas-fir forest in northern California to politicians (Governor Arnold Schwarzenegger, Speaker of the House Nancy Pelosi), utilities and even commodities traders. It predicts that the Van Eck Forest in Humboldt County will store an additional 500,000 tons of carbon over the next century. Spurred by California’s climate change program, buyers have already paid nearly $2 million for 185,000 tons of carbon credits, according to Christine Harrison, PFT communications director. In December 2009, national energy supplier Green Mountain Energy was selling Van Eck carbon credits for $19.95 per ton.

Despite this success, economists find the idea of a carbon market hard to swallow unless there is a government policy imposing emissions limits. “Carbon is not like pork bellies,” says Andrew Plantinga, OSU professor of Agricultural and Resource Economics. “Since people can derive the benefits from carbon sequestration without paying for carbon credits, there are powerful incentives for them to free-ride on other people’s purchases. Unless there are restrictions on emissions, the incentives for anybody to buy carbon credits are weak.”

Even with emissions limits, a market for forest carbon suffers from three major problems, he explains. The first, known as “additionality,” stems from the fact that trees sequester carbon just by growing. Landowners need to demonstrate that their actions will cause the forest to store more carbon than it would have done on its own.

Second, he adds, carbon credits aren’t permanent. If a contract ends and landowners are free to harvest their forest or convert their land to another use, much of that carbon can be released back into the atmosphere.

Third, carbon credits can reduce tree harvests in the short term and lead to less wood available for paper, construction and other uses. That may raise prices and give other landowners an incentive to harvest their trees earlier. This so-called “leakage” problem also puts carbon back into the air.

In an analysis for The Harvard Project on International Climate Agreements, Plantinga and Kenneth R. Richards of Indiana University suggest an alternative: an international treaty that places national limits on forest carbon emissions and requires regular accounting of carbon stocks across the globe. Such a system could avoid the pitfalls of a project-by-project approach, which was adopted in the Kyoto Protocol.

“We need to look at forestry at as broad a scale as possible,” says Plantinga. “We need to count everything. We should have a way of looking at all of the forests in the United States and relative to a (carbon) benchmark that we all agree on, determine if they go up or go down.”

A national cap on carbon emissions could provide an incentive for utilities and other emitters to buy carbon credits, such as those offered by Woodlands Carbon and Green Mountain Energy. Plantinga is currently studying the potential for policies based on emissions caps to meet the problems posed by carbon markets.

OSU news releases:

January, 2010, “Effects of forest fire on carbon, climate overestimated

July, 2009, “Forest fire prevention efforts will lessen carbon sequestration

July, 2009, “Northwest forests could store more carbon, help address greenhouse issues

January, 2009, “Warmer Climate Causing Huge Increase in Tree Mortality Across the West

January, 2007, “Nitrogen study may improve accuracy of ecological predictions

To support the OSU College of Forestry, contact the OSU Foundation

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