Improved Forest Management (IFM) carbon projects have weathered a lot of criticism in the past several years. Projects have been criticized for everything from not accounting for the carbon benefits of wood products to overestimating climate impacts. There is no shortage of articles and videos circulating online that rehash these criticisms of forest carbon projects. Whether purposefully misleading or just misinformed, these articles often promote incomplete knowledge and misperceptions, particularly when it comes to forest carbon projects within the U.S.
The truth is that the methodologies through which forest carbon projects are developed, at least through credible, publicly available registries, have been developed, refined, and vetted for decades by professional foresters, and teams of PhDs with expertise in everything from carbon life cycling to economics. Each project must complete an exhaustive forest inventory, modeling, and accounting process that is then thoroughly audited and reviewed by third-party accredited auditors. The projects are then reviewed by the registry, then again by ever scrupulous buyers eager to avoid the bad PR of making climate claims that are later accused of being false or misleading. The entire process of developing, vetting, and selling credits from a project can routinely take multiple years to complete.
In previous posts, we discussed the importance of private forest conservation and management in addressing climate change and other environmental issues. In this article, we will address a few of the most common misperceptions about the forest carbon projects that may prevent landowners and investors from taking advantage of an incredible opportunity to conserve valuable forest land in the U.S. and address climate change.
A frequently cited misperception of carbon markets is that by creating an instrument to “offset” real GHG emissions, carbon markets are greenwashing emitters and “allowing” them to continue business as usual. The sad fact is that the U.S. has never been farther from regulating GHG emissions and U.S. corporations are not otherwise required to reduce or eliminate their emissions in the absence of carbon markets. Voluntary carbon markets have provided a free-market solution to climate change that funnels investment from large, multi-national corporations to private landowners willing to take meaningful climate action.
With LandYield, these investments go to small, non-industrial forest owners and the rural communities they live in. To date, 9.3 million acres have been conserved through Improved Forest Management projects with billions of dollars being generated and invested in keeping forestland as forests. This comes at a time when the forest products industry has been struggling, prices for timber have been slipping and land conversion pressures are rising in many areas.
Additionally, an analysis of Fortune Global 500 firms found that companies using carbon credits are twice as likely to set near term science based targets, three times as likely to commit to full value chain net zero goals, and are reducing their emissions faster overall, contradicting the idea that credits serve as a substitute for internal decarbonization. Similarly, a global MSCI study of more than 4,000 companies showed that firms using significant amounts of carbon credits were more likely to disclose emissions, more likely to cut Scope 1 and 2 emissions, more likely to reduce emissions intensity, and were decarbonizing at twice the rate of non users, further reinforcing that credit buying companies are also taking stronger internal climate action. [hbs.edu] [netzeroinsights.com]
Forest carbon credits issued through credible registries are based on modeled, business as usual harvests that are designed to mirror common practices in a region. Common silvicultural methods are modeled based on location and forest conditions to quantify the volumes of wood that would have been harvested over the life of the project under prevailing conditions. Methodologies also consider regional wood product allocations and the half-life of the various products. These allocations are applied to the modeled harvested volumes and the carbon that remains in long-lived wood products, such as structural timber and furniture, are deducted from the carbon totals that are considered additional. That is all to say that the methodologies used to develop these projects do in fact account for carbon stored in wood products.
The oft-cited peer reviewed study that appeared in Science, (Wunder, S., et al. (2023) dealt specifically with Verra methodology REDD+ forest conservation projects outside the U.S. These projects operate and make carbon claims very differently than U.S.-based IFM projects such as LandYield’s.
In a nutshell, REDD+ projects look at deforestation rates over time across a large area. These projects have often been deployed in Africa and Asia to protect vitally important rainforests where very little forest and market data exist. The criticism leveled at these projects accuses them of issuing too many carbon credits because deforestation rates in comparable areas did not match that initially modeled by the project. This and other debates about carbon accounting and additionality seem to miss the forest for the trees, but more on that in a minute. Regardless of the merits of these criticisms of REDD+ projects, they simply do not apply to U.S. IFM projects. IFM projects in the U.S. use more granular and standardized forest and market data backed by decades of research by the US Forest Service. This data is used to model baseline and project carbon flows and establish additionality and quantify carbon credits. Ultimately, numerous studies on natural climate solutions cite avoiding forest conversion as one of the most accessible and cost-effective climate mitigations.
Carbon accounting is complicated, particularly when trying to model hypothetical carbon flows through forest systems and wood products. In light of how complex and debated carbon accounting methods still are, and the fact that taking meaningful actions within the next decades are critical to hitting climate targets, one would hope that the scientific and environmental community would be focused on the successes of conserving ecologically valuable forest and less about how many tons of carbon are modeled as “additional”. This would seem to be particularly true in a political atmosphere where GHG regulations are unlikely and voluntary corporate actions are incredibly important.
Forest carbon projects have been accused of prohibiting timber harvesting and thus making what can be considered responsible, pro-active forest management difficult or impossible to implement. While some methodologies (such as LandYield’s) require a deferral of commercial timber harvests, they do allow for activities necessary for forest health such as:
Additionality is an important concept in carbon markets. In forestry projects, only tons of carbon that are sequestered above and beyond “business as usual” can be considered additional. Only tons of carbon that are considered additional can be sold as offsets. Carbon that is sequestered and held in the normal, economically incentivized forestry practices of a region are not considered additional because, on average, forest owners are likely to pursue these practices through the normal course of events. This is the concept of financial additionality; that certain types of forestry practices, such as extending harvest rotations beyond what is economically optimal, would not be pursued without carbon financing.
A common criticism of private forest carbon projects is that some landowners may be getting paid to do what they would have done anyway, or that carbon offsets were issued based on unrealistically aggressive potential harvest scenarios.
Unfortunately, as evidenced by persistently high divorce rates, stated intent is not a great predictor of future behavior. Research has shown that private forest owners often harvest timber due to unexpected expenses or land transfers through sale and inheritance. This also applies to conservation-oriented landowners that become financially insolvent and sell forestland. According to the U.S. Forest Service, the average age of forest owners in the US is between 62 and 65. The Land Conservation Assistance Network describes the pending generational transfer as a “quiet crisis” facing forest conservation as this often leads to parcelization of forestland. Smaller parcels are less viable to continue managing for timber and are often converted to non-forest uses.
Generational transfer also leaves heirs with immediate financial burdens such as funeral expenses, settling debts, and estate taxes that can lead to quick land sales and development. These sales are often accompanied by “liquidation cuts” to capture all possible timber value prior to land sale. Given that many private forests will change ownership in the next 40 years, and that the generational transfer of land often incurs a harvest, many family forests will be exposed to a substantial risk of harvest in the next 40 years, regardless of the intent of the current owners. (Source: A Survival Analysis of Family Forest Owners in the USA: Estimating Life Expectancy and 5-Year Survivorship) To address the uncertainty around future landowner action, LandYield requires a 40-year, legally binding timber deed. These are recorded on project site titles with the respective county offices and will outlast most of the current decision makers enrolling in the carbon program.
Carbon programs like LandYield can ensure that landowners have stable cashflow from their forested lands and alleviate the pressure to harvest or convert their forest to meet periodic capital requirements. We support honest criticism and the continued evolution of carbon accounting standards. However, we also realize that conserving and improving forestland is, and should continue to be, a top priority in addressing larger climate concerns.