The Forestry Source - February 2011 - (Page 5)
Forest Carbon Marketplace
By Matt Smith, CF
2010 Carbon Market Ups and Downs
fter another year of twists and turns, and ups and downs, the carbon market in the United States ended 2010 with a bang. Without question, the most noteworthy development in forest carbon and US carbon markets in recent months has been the formal approval of greenhouse gas (GHG) emission regulations in California (see story on page 1). In December, the California Air Resources Board (ARB) adopted rules and regulations for a greenhouse gas cap-and-trade program that includes the use of offsets from approved forestry projects both within and outside the state. It appears that the Climate Action Reserve (CAR) will be the first such group qualified to deliver offsets to the new regulatory market, with others to be considered down the road. Of course, this situation isn’t entirely that clean and tidy, as many ARB requirements differ from CAR requirements, including vintages allowed, approved methodologies, and other significant details. As a result of the move to regulated GHG emissions in California and the recognition of the CAR by the ARB, pricing for CAR offsets that qualify under the ARB program have responded positively. Vintage 2005 to 2014 CAR tons have risen considerably in value since the fall of 2010 and are now hovering between $8 and $9 per ton. Market demand for these tons is expected to continue to
grow in 2011 as consumers in California position themselves to comply with their new regulations in as economically reasonable a fashion as possible. While demand for ARB-compliant tons has dominated interest in the compliance carbon market, demand has also remained steady for voluntary tons as well, with prices as high as $5 per ton. Perhaps the strongest performers in the voluntary category are forestry offsets produced under the American Carbon Registry (ACR), which has seen more interest of late. Pricing for these voluntary tons has been between $3 and $5 in limited trading. Some buyers are specifically requesting
Democrats and Republicans alike have climate change legislation on their short list of agenda items, albeit for entirely different reasons.
forestry tons in these transactions. At the federal level, 2010 ended in much the same way it started. Democrats and Republicans alike have climate change legislation on their short list of agenda items, albeit for entirely different reasons. Unlike this time last year, however, we now have a new group of Republicans in Con-
gress that seems positioned to slow the pace of progress on the issue. Despite the challenges ahead on climate change in Washington, Democrats seem to be committed to pressing forward on the topic in spite of a Republican-dominated House of Representatives. At the same time, the Environmental Protection Agency (EPA) has begun releasing bits and pieces of its plans to regulate GHG in the near future. We’ll have to see how Congress addresses both pressure from the executive branch and movement by the EPA on this topic in the coming year. It certainly appears as though the future of climate change regulation at the federal level will be as entertaining to watch in 2011 as it was in 2010. In the meantime, many other states and groups of states continue to follow a path similar to California’s. Some are setting their own GHG reduction targets and timeframes in the absence of federal leadership on the issue. Most recently, in late December Massachusetts set out goals for GHG emissions reductions. While the measures taken and tools used to reach these goals may vary, the movement and continued interest at the state level is encouraging for those interested in nationwide GHG reductions and a solid market for forestry-based offsets. So, what can we expect to see in 2011? ica’s Private Forests, a report examining how increased housing density near and on private forests is threatening habitat for plants and animals already at risk of decline or extinction. The report, the third in the “Forests on the Edge” series, provides details on at-risk species, including the Delmarva Fox Squirrel of the Chesapeake Bay region, one of the largest squirrels in the Western Hemisphere; the diminutive Key Deer, found only in the Florida Keys; and the Sonoma and Santa Barbara populations of the California Tiger Salamander. “Over half of America’s forests are privately owned and are under pressure from housing development, pests, diseases, and fire,” said Forest Service Chief Tom Tidwell in an announcement about the report. “Future development is likely to result in a decrease of private forest habitat for many at-risk species. This report will be a valuable tool for conservationists to assist in planning future developments and identifying at-risk species.” Cattle Help Restore Degraded Soil According to a study funded by the US Department of Agriculture’s Agriculture Research Service (ARS), cattle can help restore degraded soil. Soil degradation is a common result of decades of field plowing, and often the depleted land reverts back to forests and pastures. The soil in these discarded plots is robbed of nutrients and organic matter. Researchers tested cattle grazing on degraded soil to determine if the activity would have any effect on restoring depleted nutrients. During a 12year period, 18 paddocks were used to monitor the soils’ response to different land-management practices. In the end, the paddocks with medium to heavy grazing proved to be the best way to sequester
Well, everyone has opinions, but here’s mine: We’ll probably see a heated debate on Capitol Hill that results in some small steps toward federal involvement in GHG regulation this year, spurred primarily by the efforts of the EPA, and I expect the market for compliance-grade forest offsets (ARB) to continue to grow rapidly ahead of this. Demand for purely voluntary offsets in 2011 should be stable at modest levels. This market could grow somewhat this year should the general economic condition in this country improve. Leaders in the voluntary carbon category will likely be more established registries such as the Voluntary Carbon Standard (VCS), pre2005 CAR, and ACR, but I also expect that some of the local trading and unique carbon solutions developed over the past years will persist. In any event, the carbon market roller coaster looks to continue into the near future. Hopefully, the path to a pay day for forestry will become clearer and more scalable in the year to come. Matt Smith, CF, is vice president of forest operations at Finite Carbon Corp. Contact him at email@example.com. To read past installments of Smith’s Forest Carbon Marketplace, visit the “Climate & Carbon” page on the SAF website at www.eforester.org/fp/climatechange.cfm and scroll down to the “carbon markets” heading. nitrogen and carbon in the soil. “From an environmental standpoint, grazing has traditionally been viewed as less desirable than leaving the land unused. However, these results demonstrate that if producers allow cattle to moderately graze pastures, they’ll be restoring soil quality and cutting greenhouse gases by keeping carbon in the soil as organic matter, rather than releasing it into the atmosphere as carbon dioxide,” said Alan Franzluebbers, an ARS ecologist and the author of a paper about the study published in the November/December 2010 issue of Soil Science Society of America Journal.
(“Industry News” continued from page 5)
Tallest Pine in the World The tallest live-top pine of any species in the world, a ponderosa pine, was found on the Siskiyou National Forest in Oregon in January. Michael Taylor and Mario Vaden measured the tree at 81.79 meters (268.35 feet) tall, with a dbh of 5.7 meters (18.7 feet). Nine other ponderosas in the area were found to range from 247 feet to 266 feet tall. “We found four ponderosa pines, each tall enough to be a new world’s tallest pine of any species, and at least eight trees that are the new tallest known among ponderosa pines,” said Vaden. “Our measurement on January 3 with a rangefinder was 268 feet, holding it freehand. On January 9, using a tripod, we got a firm 268.35 feet. Also on the 9th, we drove along the Umpqua River to the world’s tallest sugar pine in the Umpqua National Forest and measured it. The sign said 265 feet, but we measured it at 255 feet.” The tallest pine is listed, along with tall trees of other species, at conifers.org. California Roadless Areas Protected An agreement to protect more than one million acres of roadless areas on four national forests in Southern California—the Angeles, San Bernardino, Cleveland, and Los Padres—was reached in December by the US Forest Service, the state of California, off-road vehicle users, and environmental groups. The parties agreed to restrict road building and other development in the areas. The agreement was required by a federal district court ruling in a case brought against the Forest Service by the
The tallest pine in the world, a ponderosa pine measured at 268.35 feet, was located on the Siskiyou National Forest in Oregon in January.
more than 27.4 million barrels of fuel ethanol, up from 26.1 million barrels in September. The previous record, nearly 27.0 million barrels, was set in August 2010. According to the company, ethanol accounted for 9.1 percent of the US gasoline pool during the first 10 months of 2010. Pope’s Conservation Easement Pope Resources, a limited partnership based in Poulsbo, Wash., recently announced the $2.4 million sale to the Columbia Land Trust of a conservation easement on nearly 6,900 acres of timberland in Washington State. Under the terms of the easement, future development on the property is restricted, but timber management and harvesting will continue. The sale was funded by the US Forest Service’s Forest Legacy program. For the latest industry news, visit the SAF website at www.eforester.org/fp/ business.cfm.
Center for Biological Diversity, the Sierra Club, and other groups. “Under this agreement, some of the most wild and pristine areas of Southern California’s national forests will be better protected from potential damage,” said Ileene Anderson, a Center for Biological Diversity biologist. “These areas provide critically important strongholds for endangered species such as steelhead, California condors, and arroyo toad; especially during this time of climate change.” Threats to At-Risk Species The US Forest Service recently published Threats to At-Risk Species in AmerThe Forestry Source
Table of Contents for the Digital Edition of The Forestry Source - February 2011
The Forestry Source - February 2011
Forest Carbon Marketplace: 2010 Carbon Market Ups and Downs.
Grays Harbor Reinstates Forestry Program, Launches Student Chapter.
Libby Chapter’s Forum Airs Candidates’ Views on Natural Resources Issues.
People in the News
forestryimages.org: Photos for Forestry and Natural Resources.
Field Tech: Soil Erosion Modeling With the Modified Universal Soil Loss Equation.
The Forestry Source - February 2011