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California's Forest Owners Think Ahead

Cameron Walker

The Ecosystem Marketplace finds out why forests are starting to register with the California Climate Action Registry.

The Ecosystem Marketplace finds out why forests are starting to register with the California Climate Action Registry. Teetering on the fault lines tracing the U.S. Pacific Coast, California has always been on the cutting edge—whether the eureka moments of a first gold strike or now, the novel blending of conservation and forestry that's paving the way for a future carbon market. Several California groups are in various stages of the process to register their forests with the California Climate Action Registry (CCAR), an organization that promotes reducing greenhouse gas emissions through a voluntary registry, to turn their trees into what may be a future jackpot: carbon. In July, Humboldt County's van Eck Forest worked with the San Francisco-based Pacific Forest Trust (PFT) to register with CCAR. The move represents the first step toward determining how many carbon credits the forest's 2,100 working acres could generate for potential market transactions. According to preliminary data, forest managers think the carbon project will sequester 500,000 tons of carbon dioxide during a 100-year period. Further south along the coast, the California office of the Virginia-based Conservation Fund—which has, as an entity, registered with CCAR—intends to register 24,000 acres of the Garcia River Forest in Mendocino County. The conservation organization bought forests along the Garcia River for $18 million in 2004; this October, it plans to complete the purchase of another 16,000 acres in nearby watersheds. All of these forests will become part of the registry as well. Both areas have the potential to make significant contributions to the carbon pool. The van Eck forest's 500,000 tons of sequestration "is a lot of tons" for a relatively small forest, says Diane Wittenberg, CCAR president. And once the Garcia River Forest project is up and running, even larger numbers are likely. "It will be a little while before they actually have certified carbon," says Sam Hitz, CCAR vice president. Still, PFT has already been fielding calls from people interested in purchasing carbon credits from the van Eck Forest; PFT president Laurie Wayburn says the group has enrolled qualified certifiers and the certification protocols are being finalized. "While you may have some sales of forest carbon here and there, it really won't come into its own until there's a mandatory cap-and-trade system" in this country that is compatible with international markets, says Andrea Tuttle, the former director of the California Department of Forestry and Fire Protection. But these projects, and the climate registry itself, provide a solid foundation if a market emerges—and highlight the one-two punch of protecting threatened private forests and reducing greenhouse gas emissions, says Tuttle, who is now a PFT board member.

The Plight of Private Forests

Researchers blame forest loss for at least a quarter of human-caused CO2 emissions each year, making its contribution to climate change second only to fossil fuel emissions. This spring, California's Climate Action Team recommended that forests play a key role in reaching the goal of reducing the state's greenhouse gas emissions to 1990 levels by 2050. In the 1990s, private forests across the country began disappearing even as public attention focused on forested public lands. Private forests make up more than half of U.S. forests. Fifteen million acres of private forests make up California's slopes and shores; between 1992 and 1997, the state lost these forests at a rate of 40,000 acres a year, a trend that has since accelerated. Around the world, people fell trees to provide fuel or create areas for farming or livestock grazing. In California, development and conversion to agriculture are the primary causes of forest loss. The pressures to convert forestland into real estate increased as California's forest regulations became more stringent. Not only did practices have to change to protect endangered species and habitat, but landowners needed to spend as much as $50,000 to cover paperwork confirming their forests met new standards. "You have to cut a lot of timber just to pay for the regulation costs," Tuttle says. In addition, U.S. timber prices sank on the global market as international woods flooded in. With the odds stacked against them, private forest owners started selling off their land. "Forest practices became less of a threat to the land than the outright conversion to development," Tuttle says. "It was a tragedy to see the pressures of well-meaning regulations driving [owners] out of business."

Forestry's Next Generation

Now, surprising groups are becoming foresters in order to prevent more forest loss. PFT manages several California forests, including the van Eck Forest's four tracts near the northern California towns of Eureka and Arcata where large-diameter redwoods and Douglas fir dominate the landscape. The forest's original owner, Fred van Eck, "was someone who believed in the synergy of environmental and economic interests," Wayburn says. Van Eck asked the trust to conserve the forest in 2001. In these forests and elsewhere, forest management is an essential part of forest conservation, Wayburn says. In Mendocino County, three or four timber companies own most of the forestlands along the coast. Chris Kelly, now the California director for the Conservation Fund, saw an opportunity. "Often in conservation, you're buying small pieces [of land] to try to reassemble a landscape," he says. Looking at the vast swaths of private forests, he says, "I thought, if you could buy those acres, you could accomplish remarkable things." And so that's what the Conservation Fund did. Using a combination of state and private funds, the Conservation Fund bought the Garcia River Forest from Coastal Forestlands, Ltd. and then sold the development rights to The Nature Conservancy. The Conservation Fund has set aside 35% of the Garcia Forest as a permanent conservation area, and plans to practice sustainable forestry in other areas. This next generation of foresters may be part of a novel approach to addressing California's environmental issues. "I think there's been a growing awareness among the environmental community that forest sequestration is not a silver bullet, but it's a really important transitional way" of addressing climate change, CCAR's Hitz says.

CCAR's Forest Protocols

The California Climate Action Registry, established in 2001, provides a voluntary system for companies to register their baseline carbon emissions and establish a credible record of any reductions they make. (For more about CCAR, see California Leading: New Thinking on Carbon Accounting) Besides leading the pack in tallying California's carbon, CCAR also took a head-on approach to the problem of forests. "When Kyoto was first signed, the last major fight was over forests," Wittenberg says. Countries couldn't agree on how to count forest carbon—or whether forests and their carbon credits should factor into greenhouse gas mitigation at all. In California, instead, PFT lead the development of Senate Bill 812, which established a series of forest protocols that CCAR now uses to register forest projects. For forests to be part of the registry, their carbon stocks must have permanent protection so that their benefits last over time. In the California forest protocols, this lasting shelter comes in the form of conservation easements. In addition, the registry has set out models to establish carbon storage baselines and requires that carbon credit-producing projects are truly "additional"—that is, they create and preserve carbon stocks above and beyond what would happen if projects continued with traditional practices. The protocols also put a premium on projects that deliver important benefits beyond GHG reductions. For example, new trees planted under the protocols must be a mix of native species, a requirement that helps projects deliver additional benefits such as critical habitat restoration, Hitz says. California's strict forest standards make establishing the "business as usual" carbon baseline relatively straightforward, Tuttle says. Then, this baseline is compared to a scenario that manages for additionality. "Certified" reductions, she says, require measurement of forest stocks. There are certainly still kinks to be worked out, especially for wood products. When a tree is cut down, carbon sticks around in the wood for a period of time. The question is, who owns the carbon rights: the forest landowner, the mill, or the person who frames up a new house? CCAR now allows wood products as an optional pool, but additional policy decisions may be needed to track down who owns the carbon credit once the wood is sold. Even though some aspects of the forest protocols might need tinkering, the intensive stakeholder process that went into their design created a well-respected standard for the state, CCAR's Wittenberg says. Now, she says, other states and countries have been looking to California's forest protocols for ideas when designing their own.

More Work Ahead

Forests must do more than register before they can begin selling carbon credits. Each year, forests have to report to the registry, checking that their initial estimates of the land's productivity and carbon stocks remain accurate. To monitor the forests, CCAR uses third-party verifiers with expertise in forest protocol rules, and teams that must include a registered professional forester. "There's a tremendous amount of scrutiny," Wayburn says. In the meantime, several more California landowners are looking into the registry process. The Collins Companies, an Oregon-based sustainable forest company with 100,000 acres of forestland in California, has committed to joining the climate registry. Near Mount Shasta, Bascom Pacific has given 9,200 of its 40,000 acres to PFT to conserve; this area, which provides habitat for bear and elk as well as several endangered and threatened species, could someday register as a forest project. Not every California private forest will sign on. For private landowners to put their lands in conservation easement requires a commitment to conservation in perpetuity, a commitment that some landowners resist. "Right now, they see it as a constraint on their future development and their revenue stream," Tuttle says. "But retention of the forest land base is as key as the forest practice side of the story." With a marketplace that places value on hanging on to forestland, she says, landowners will have another option when making decisions about their forests' futures. One new entry into the Climate Registry's forest world is Pacific Gas and Electric Company. In January, the company proposed the Climate Protection Program, a $20 million program allowing customers to pay a voluntary premium on their monthly bills to offset greenhouse gas emissions from electricity and natural gas use. The first target for these funds: forest projects. The accounting of carbon in California's forest projects may be just the first of many steps. "What would really be terrific is if we could add other ecosystem services to the income stream," Tuttle says. Cameron Walker is a regular contributor to the Ecosystem Marketplace. She may be reached at cwalker@nasw.org. First posted: September 5, 2006 Please see our Reprint Guidelines for details on republishing our articles.

Please see our Reprint Guidelines for details on republishing our articles.