Uncertainties cloud state's carbon offset opportunities
ANDERSON, Calif. - Forestry's recognition as a carbon-friendly industry could provide lucrative opportunities for timberland owners in the emerging world of carbon credits.
However, uncertainties in California's upcoming cap-and-trade regulations could make it costly and risky for companies to sign up with forest projects, industry insiders told a gathering here.
Critical details of the program set up by Assembly Bill 32, the state's global warming law, have yet to be worked out, they say. The state may skim as much as 10 percent off the top of carbon-offset fees paid by emitters, with some money perhaps going toward a controversial high-speed rail project.
And enrolling a swath of forest land in the program to offset emissions elsewhere could cause the land to be tied up for as many as 150 years - a major disincentive for small landowners, said Ed Murphy of timber giant Sierra Pacific Industries.
"It's not for the faint of heart," Murphy said during a workshop Feb. 10 at the Sierra Cascade Logging Conference. "It's not exactly an opportunity yet."
The prospect of turning their forest-management activities into a revenue stream is enticing to many in a timber industry that has been slowed by regulations, lawsuits and economic slowdowns over the last 30 years.
In a properly managed forest, the carbon going into the atmosphere from harvests is offset by carbon absorbed in new plantings of trees, said Terry Collins, a forester for Collins Pine Co. in Chester, Calif. The company owns stands near Chester and Lakeview, Ore., and the sale of energy from its cogeneration plant in Chester offsets emissions from the timber operation, he said.
"There's eight times more carbon stored in a board than was emitted by making the board," Collins said. "There's not very many products that could say making their product resulted in a net loss of carbon into the atmosphere."
While environmentalists argue more carbon would be absorbed by leaving trees in the forest, Collins said more would be burned by importing lumber than producing it domestically. Indeed, making a comparable amount of concrete brick would emit 10 times more carbon than wood, steel would produce 15 times more and aluminum would emit 40 times more, said Steve Brink, vice president of public relations for the California Forestry Association.
Some landowners already participate in a voluntary carbon-offset program. Manufacturers buy offsets to be able to advertise to environmentally conscious consumers that their products are carbon-neutral.
California is set to begin auctions later this year for offsets for the 436 oil refineries, utilities, cement factories and other operations whose emissions will be capped. Forestry and agriculture have been recognized by the state as sectors where offsets will be generated, Brink said.
But details are still murky at best. Yet to be nailed down is the concept of "additionality," where a bar is set based on the previous year's activities and could rise every year. Also, the price of a carbon credit could work out to be about one-tenth of the price of the harvested wood, Murphy said.
"Obviously there's a lot of work to be done" on details, said William Keye, government affairs specialist for the California Licensed Foresters Association. "We know that forests eat carbon like a teenager devours pizza, especially if they're actively managed ... If society is looking for ways to mitigate man-caused carbon, providing support for the forest sector is a positive step."