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What’s the Proper Accounting for Forest Off-Sets?

Posted in Green Building, Natural Resources and Environment, Sustainable Business

The American Forest Resource Council (AFRC) held its annual meeting two weeks ago, and as part of that meeting hosted the most heated debate on the proper accounting for carbon sequestration by forests, and the potential credit that forests in the United States may be entitled to that I have heard.  On one side, Mark Harmon of Oregon State University, who has studied forest carbon cycling for decades, argued that the forest products industry risks losing all credibility by overstating the case for forest carbon sequestration.  Ron Neilson of the Pacific Northwest Research Station pointed to the risk of catastrophic die back from global warming.  Elaine O’Neil of the Center for Research on Renewable Industrial Materials (CORRIM) showed that the math changes if you assume that wood products are used in place of other building materials, such as steel and concrete, which require more energy to produce and are not renewable.

The Intergovernmental Panel on Climate Change has said,

In the long term, a sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an annual sustained yield of timber, fibre or energy from the forest, will generate the largest sustained mitigation benefit. Most mitigation activities require up-front investment with benefits and co-benefits typically accruing for many years to decades. The combined effects of reduced deforestation and degradation, afforestation, forest management, agro-forestry and bioenergy have the potential to increase from the present to 2030 and beyond.

IPCC Fourth Assessment Report, 2007.  If that’s true, climate change legislation needs to foster a sustainable forest management strategy.  But if, as seemed to be the case in the debate at the AFRC meeting, there is not agreement as to the proper accounting, how can that happen?

Here’s a nickel version of the issues that respected scientists almost came to blows over.

Don’t get distracted talking about old growth.    The scientists could debate ad nauseum whether replacing old growth with young managed stands and using the old growth trees for lumber would result in more carbon sequestration over time.  Back in the Reagan Administration there were those who defined “old growth” as a forest where the annual loss of biomass to decadence equals the growth on live trees.  At some point a forest breaks down, and starts releasing its carbon back into the atmosphere.

Don’t even go there.  Even if harvesting old growth and replacing it with managed stands could be proven to be carbon positive, there are way too many reasons why in the United States we won’t be harvesting the remaining old growth.  Old growth has too many other environmental benefits.  So don’t waste breath on the question.  The real debate has to be about managed forests and dead and dying forests and smart people should turn their attention there.

What time scale do you use?    A standing, commercially mature forest holds a lot of carbon.  And in the Northwest it may keep sequestering more carbon for a hundred years or more after it is commercially mature.  If it is harvested and replanted, all that carbon is removed from the land and is turned into a variety of products – some of which (lumber used in buildings) may stay sequestered from the atmosphere for additional decades or centuries, and some of which (wood burned as biofuel) may be discharged into the atmosphere almost immediately.  The new young stand will sequester carbon at a higher rate per ton of existing carbon in the replacement forest, but since the replacement forest has far less existing carbon, it will be decades before it sequesters as much absolute carbon as that commercially mature forest was sequestering.

So does that mean you shouldn’t harvest the commercially mature stand?  You can answer that question differently if you look at the short term or a longer term, and based on what you think will happen with the wood removed from the forest in a harvest.  In the short term, obviously the accounting on a particular acre is negative for harvest on that acre.  But over the 150 years or so that a given stand may keep sequestering carbon in the Northwest, it could produce as many as three stands of timber, with each yielding wood products that keep the carbon sequestered for as long as the buildings they are used in remain standing.  The total carbon sequestered over that 150 years is at least equaled, if not exceeded, by the three stands, as compared to one stand.

It is also essential to recognize that forests are not managed as individual stands, but as the collection of all stands in the forest.  In a sustainably managed forest, there is always harvest occurring, but there is also always planting occurring, and there are always stands moving from not-quite commercially mature to commercially mature.  A decision to stop harvesting is a decision to stop that entire process of renewal, and ultimately creates a forest that is not sustainable.

How do you account for substitutions?    The recession has slowed construction across the developed world, but it is folly to assume that the world is done building buildings.  If buildings aren’t built from wood, they will be built from something else – mostly steel or concrete.  Manufacturing steel or concrete requires more energy than manufacturing wood, and removing iron or cement and aggregate from the ground doesn’t make way for a new crop of carbon sequestering anything.  So if we assume that the world will continue building buildings, the accounting for forestry has to take into account that building out of wood has carbon benefits over building out of steel and concrete.

Along the same vein, it matters where trees are harvested.  If a Northwest forest is not harvested, that increases demand for harvest in other parts of the world.  The biggest problem globally with forests is deforestation – especially in the tropics but in lots of other areas.  Finding incentives to stop deforestation is a major focus of climate policy makers.  So there is benefit in not forcing American demand for forest products overseas.

How do you look at forest health and fire danger?    Fire is a part of all natural forests.  A century of fire control has profoundly changed forests across the west, resulting in far more trees per acre and far more late-successional trees, which used to be rare in the forests, than occurred in pre-European settlement times.  The result is that millions of acres of Western lands carry far more biomass than they historically carried (from a carbon perspective, that’s a positive).  Unfortunately, overstocked stands mean that the trees must share the limited water among more neighbors, and all trees become stressed.  Particularly the late-successional species become an easy mark for the Western bark beetle, and today we have millions of acres of dead and dying trees across the West.

The issue then is, should those dead and dying trees be removed, so that the land can be reforested and a new stand of timber be developed?  Those dead trees aren’t pretty – but they keep carbon sequestered.  At least until they burn up.  So there is an argument that they should be left where they are, as holders of the carbon they have stored.

But what about fire?  There the debate is over what time scale to use in the accounting.  If you look at the number of acres that have burned every year since we started keeping track, the odds of any acre burning any given year is quite low.  On the other hand, if you take out the dead forest and replant it, all that carbon is removed.  So, even if the dead forests will make a very hot fire when they burn and will release all their carbon into the atmosphere  when they burn, there is an argument that if future fire rates are like historic fire rates, they aren’t all that likely to burn in the near term, and removing the dead wood to burn as biofuel is a net negative.  BUT, if you base the odds of a forest fire discharging the stored carbon on the rate of forest fires during the last eight years, the odds of a forest fire removing any particular stand of dead trees gets much higher.  If you assume future fire rates will be more like the last eight years, using the carbon stored in dead wood as a replacement for burning fossil fuels rather than waiting for it to be discharged in a forest fire has a clear advantage.

What about thinning the forest?  Thinning removes some of the trees from a forest so that the others don’t have as much competition and grow better.  As with a clear cut harvest, its first effect is to reduce the total carbon stored in the stand.  But silviculturalists agree that the best defense against the Western pine beetle that is killing hundreds of thousands of acres of trees annually is to reduce the stocking on the forests.  Thinning is clearly important to forest health.  Is it also important to carbon sequestration?  That again depends on what you assume about forest health in the absence of thinning, and whether storing carbon in dead forests seems like a net positive over removing part of the stored carbon now, so that the forest stays healthy.

How do you determine additionality?        Carbon offsets are supposed to be for doing something that would not be done otherwise.  If a forest is already being managed sustainably, why should it get offset credit?  Because managing forests to maximize their growth, and thereby their carbon sequestration, isn’t the only way to manage forests.  If the world market for forest products gives offset credits to forest landowners who have not been managing for high carbon sequestration  to begin doing so, and thereby gives them an economic advantage over landowners who had been managing for sustained high growth, will the landowners who have been making the investments all along  continue making those investments?  Some say not.  Some argue that additionality should be measured from the minimum forest investments, with investments that increase carbon sequestration over that minimum being eligible for offset credit.

Does any of this matter?    Deforestation is a major cause of world-wide carbon emissions, and stopping deforestation is a major goal of carbon offsets.  But is deforestation a risk in the United States?  It is probably unlikely that large areas of forest will be cut down to turn into pastures for cattle or for crop land, as happens in many parts of the world (and happened  in the American South after the Civil War, and in the Northeast in the 1800s, and in the Upper Midwest during the same period.)  But that doesn’t mean that land won’t be taken out of forestry.  The forest products industry competes on a global basis.  It is a commodity industry, where margins are always slim.  It requires patient money in a world where money is increasingly impatient.  As a result, thousands of acres of forest land are converted to non-forest use, primarily low-density residential sprawl, every year.  Other lands are managed with minimal investment, resulting in lower growth and less carbon sequestration than if there was an incentive to manage for carbon sequestration.  If sustainably managed forests are, as the IPCC says, a critical ingredient in limiting carbon emissions and controlling climate change, then climate policy must encourage continued sustainable forest management and discourage conversion of forest lands to other uses.