- Courtesy Of The Nature Conservancy
- Burnt Mountain
In the summer of 2018, the Nature Conservancy announced it had found a way for polluters in California to fund forest conservation in Vermont. The environmental group had acquired the 5,500-acre Burnt Mountain property in northern Vermont and was planning to sell carbon offsets tied to the tract's millions of trees.
The idea was that big California companies would pay good money — an estimated $2.4 million over a decade — to balance their greenhouse gas emissions by paying to protect trees, which pull carbon from the atmosphere, from logging.
But last month, consultants reached a surprising conclusion: The Vermont forest doesn't store enough carbon to cover the project's costs because the trees are smaller than expected. In the cold, nutrient-poor hills north of Hazen's Notch, trees grow more slowly than elsewhere.
"It's a hard life for a tree in northern Vermont," said Jim Shallow, the Conservancy's director of strategic conservation initiatives.
Trees remove carbon dioxide from the atmosphere through photosynthesis and store it in their branches, trunks and roots. Protecting forests to help them accumulate more carbon is increasingly seen as vital to offsetting the human-caused carbon emissions that drive climate change.
The setback illustrates how difficult it is proving for Vermont — one of the most heavily forested states — to tap emerging markets for forest carbon storage. In response, some legislators are proposing that the state address the conundrum.
"I do not think that selling forest carbon offsets is the be-all and the end-all solution to climate change," Sen. Ruth Hardy (D-Addison) said. "But I think we should be doing everything we can, and for some forest property owners, this may be a really good opportunity."
Hardy serves on a group studying how the state can support property owners who want to participate in carbon markets. Vermont should lead by example by enrolling one of its own forests in a carbon-offset program, she said.
At first glance, the opportunities seem huge.
California's cap-and-trade program, launched in 2013, has become one of the biggest sources of cash for green projects in the nation. The state requires its largest polluters, including power plants, factories and large dairies, to ratchet down their emissions each year or pay to offset them.
That money — $1.7 billion last year alone — is now helping to protect grasslands from development in Colorado, capture methane from mines in Wyoming and allow redwood trees to sequester carbon in California.
Not a dime of this windfall has made its way to Vermont.
Shallow hoped the Burnt Mountain project could change that. The property near Long Trail State Forest in Montgomery was owned by Atlas Timberlands until 1997, when a partnership that included the Nature Conservancy acquired it as part of a larger purchase.
A 2017 timber assessment showed the previously logged parcel had higher than average timber stocks. The group hoped to boost those stocks over time with a "forever wild" easement to permanently ban logging. Selling the forest's ability to sequester and store carbon would provide an alternate source of revenue.
However, a detailed analysis commissioned by their San Francisco-based carbon consultant, Bluesource, showed the math didn't quite work. The property had less carbon than anticipated, meaning fewer credits could be sold.
Selling the credits would carry significant expenses. There's the upfront cost of the carbon analysis, for which foresters measure a sampling of trees down to an inch in diameter. Consultants like Bluesource also get a cut to cover sales and marketing expenses. In addition, property owners need to pay monitoring expenses — for 100 years.
Those costs, when balanced against the lower expected revenue, showed the project was not cost-effective, Shallow said.
To date, just one Vermont property owner, Middlebury College, has figured out a way to get paid for not cutting its trees. The 2,100 acres of forest surrounding the school's Bread Loaf Campus were conserved in 2015 and forever protected from most logging.
The school sells carbon offsets to people and organizations voluntarily looking to blunt the climate impact of their carbon emissions. This fast-growing voluntary market is less regulated than California's mandated cap-and-trade program. The college expects to earn $1.4 million from sales of its offsets by 2022.
The possibility that other Vermonters could get paid for letting their trees grow, instead of — or in addition to — chopping them down for lumber or firewood holds great promise, according to Nick Richardson, president of the Vermont Land Trust.
In theory, if all the carbon being added to the state's forests every year were monetized through carbon markets, landowners could reap $45 million to $90 million a year, Richardson said.
"In my view, the forest carbon opportunity is where the solar opportunity was about 15 years ago," Richardson said.
Barriers exist, however, including the relatively small size of Vermont's forest parcels. Nearly 80 percent of the state's 4.5 million acres of forestland is privately held. The average size of the 15,000 private properties registered as state timberland is just 155 acres — too small to make it practical to participate in the carbon markets.
That was one reason legislators like Hardy introduced legislation earlier this year to have the state enroll some of its own 350,000 acres of forest in carbon markets. She hoped that would demonstrate environmental leadership and generate state revenue.
The effort hit a few snags. Michael Snyder, commissioner of the Department of Forests, Parks and Recreation, urged legislators to look before leaping.
"I'm all for monetizing the power of Vermont forests," Snyder said. "I want to get it done right. I want it to be successful.
The Senate Agriculture Committee proposed having Snyder’s department do a pilot program. After further testimony in the House, lawmakers instead agreed to create a 10-member study group.
"I was surprised they wanted to slow it down," Hardy said.
Snyder, who chaired that group, said he wants to help owners of the state's increasingly fragmented forestlands keep them intact, but he's not sure whether property owners or the middlemen would be the real beneficiaries.
"That's why I'm kicking the tires," he said. "It's extremely complicated, and it's untested here. We have a lot to learn."
After five sparsely attended public meetings and a crash course in carbon markets, the panel has drafted recommendations. They include developing information for landowners about how carbon markets work, exploring whether to help enroll state and town properties, and creating a public-private partnership between the state and environmental groups to make it easier for landowners to participate. The group's final report is due by January 15.
One of the key issues that emerged during the meetings was whether participating in carbon markets is compatible with existing timber harvests.
A growing forest removes more carbon from the atmosphere than a forest that is cut down or regularly logged, according to the theory behind forest carbon credits. Sales are meant to incentivize that growth.
But some question whether owners who had no intention of logging their land in the first place should be able to participate.
"Why should people get paid for something they're already doing?" asked forester Robert Turner, who served on the panel. "That's a core ethical question."
Snyder, who had a long career as a county forester, said the vast majority of Vermont's forests already benefit from a "higher standard of stewardship and care and management than any forests on the planet." That makes him wonder how much extra value landowners might receive for reducing the size or frequency of timber harvests, as well as what doing so might mean for the state's wood products industry.
Proponents like Shallow say it's possible for properties to generate income from carbon credits for "improved forest management practices" even while their timber is still harvested. Snyder said he's heard this claim before but notes that the two carbon projects furthest along in the state — Middlebury and Burnt Mountain — ban or severely limit logging.
"If the carbon program that emerges is, you don't cut any trees, I don't think that's good for the wood-using people," Snyder said.
Shallow said it is unfortunate the logging restrictions in those two projects may leave some with the impression that managing a forest for timber-cutting and carbon storage are incompatible.
A pending Vermont Land Trust carbon project in Cold Hollow near the Canadian border will provide additional income from carbon credits to property owners while still allowing sustainable logging, Shallow said.
"The message here should not be, to do carbon, you can't harvest," Shallow said.
Despite the setback on the Burnt Mountain project, the work will help prepare the land for the growing voluntary carbon market, said Josh Strauss, vice president of Bluesource. More and more private companies and organizations are pledging to make their operations carbon neutral, and they need offsets to do that, he said.
"I really do believe that right now, forest carbon is a completely undervalued asset that is just on the cusp of really turning a corner," Strauss said.
Though the voluntary market is likely to generate about $500,000 less for the conservancy over the 40-year life of the project, Shallow said the group is committed to making it work.
He understands that such setbacks may deepen skepticism of carbon markets. But Shallow said he hopes that state leaders will remain open to new tools to support forests.
"This climate emergency demands of all of us to be more innovative, and that's what we're going to continue to try to do," he said.Correction, December 19, 2019: The Senate Agriculture Committee introduced the forest carbon legislation last session. An earlier version. of this story contained an error.