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Carbon Offsets and the Role of Forests

Global warming threatens to profoundly alter our forests, yet forests can also play a vital role in protecting the climate. If strategies for combating climate change, such as the Regional Greenhouse Gas Initiative (RGGI), are to be effective, policymakers need to recognize the vital importance of forests and seek to maximize their benefits. Forestry can contribute to mitigating climate change by: storing carbon onsite; storing carbon in finished products, such as lumber and paper; and substituting wood for fossil fuels or materials (steel, for example) that require more energy to produce

RGGI (commonly pronounced “Reggie” ) is a market-based, carbon “cap-and-trade” program that is designed to reduce global warming pollution from electric power plants in the 10 Northeast states, from Maine to Maryland. The participating states issued a final model rule in August 2006, with the agreement scheduled to go into effect in January 2009.

RGGI allows electricity generators flexibility in meeting emissions reduction goals through the use of “offsets,” which are projects that reduce greenhouse gas releases from sources outside of the carbon emitting-and-trading program. Afforestation (the planting of trees on land that has been out of forest for at least 10 years) is one of five offsets the model rule currently allows. While the potential for afforestation is limited in the Northeast because approximately two-thirds of the land is already forested, the RGGI states are now engaged in discussion about expanding the offsets to include forest conservation and changed forest management.

In order to be considered legitimate, offset projects must prove that the carbon benefits they provide are real, additional, verifiable, permanent, and enforceable. For example, a forest management project would have to demonstrate that a change in management behavior will produce increased storage of carbon, in the forest or in wood products, in perpetuity.

Conversion of forestland to residential and commercial uses, meanwhile, does just the opposite - threatening climate goals because it reduces carbon on-site storage. Though long-term trends indicate that forest cover and forest age are increasing over the entire Northeast, this trend has reversed in high-population-growth areas. A review of forest inventory and other data shows that in Maine alone, 5,000 to 10,000 acres of forestland are converted each year to developed uses. Across New England, roughly 60,800 acres of rural timberland are developed each year.

Annual carbon emissions from this land conversion are estimated to be 6.1 to 14.3 million tons (three to seven percent of New England’s total emissions), based on average amounts of carbon stored on forestland. Moreover, conversion removes the forest’s ability to sequester additional carbon (sequestration is estimated to currently be absorbing the equivalent of 12 to 20 percent of New England’s annual carbon emissions). 

In June, the Maine Forest Service and Environment Northeast joined numerous participants from the forest industry and environmental groups in a conference hosted by the Manomet Center for Conservation Sciences on carbon offsets and forestry in New England. Although the discussion was a good start, the conference highlighted the continued uncertainty over what types of forest activities will be found eligible for offset credits, not only through RGGI but also through other carbon-reduction trading programs.

In advance of clear specification for acceptable projects, companies and organizations have begun forest projects for the voluntary carbon market and, on a pilot basis, for emerging regulatory markets. (None of these are in the Northeast yet, though, explorations are being made.) The lack of clear, consistent rules in the voluntary market, however, leaves the door open for questionable projects that may threaten the overall credibility of forestry as an emissions-reduction tool. Uncertainty about what rules will look like under RGGI or an eventual national cap-and-trade program also limits investment in forest projects.

Those of us who work in the Northeast’s forests must help to develop a protocol that will allow forest-based offsets to compete with other offset categories, such as the capture of methane gas from landfills or farm animal waste. Carbon accounting requirements for forestry offsets must be feasible, minimize costs, and produce credible reductions in order for this type of offset to be accepted by the larger environmental community. Given that RGGI will likely influence an inevitable federal cap on carbon emissions, it is of vital importance to get forestry offsets right the first time. 

Offsets are not the only answer to maintaining and expanding the vital role forests can play in stabilizing our climate. A regional strategy to protect our forests and increase their productivity must be more encompassing. It should maintain and enhance incentives for landowners to keep forests as forests and in active management, expand the use of sustainably-harvested biomass to replace fossil fuels, promote smart growth, and encourage use of the region’s forest products as an environmentally responsible choice. But as the offset market steams forward, it can be an important tool for encouraging sustainable forestry in the region. We must join together to develop project standards that will capitalize on the ability of forests to reduce atmospheric greenhouse gas levels while benefiting forest landowners and the environment, regionally and in the nation as a whole.

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