Tribes look to cash in with 'tree-market' environmentalism
by Joshua Zaffos
Carbon banking could help restore forests and fight global warming
On the Nez Perce Indian Reservation in northern Idaho, ponderosa pine and Douglas fir saplings may hold the seeds of a movement to slow global warming. Known as the Tramway Project, these trees grow along the breaks of the Clearwater River, where the U.S. government once coerced the tribe into clearing the forest and farming. Now, the Nez Perce hope to restore their forests, fend off climate change, and make some money while they’re at it.
Brian Kummet, a forester for the tribe, calls the 400-acre Tramway "a flagship project" for the practice known as carbon sequestration, in which trees are planted to capture atmospheric carbon dioxide — the greatest contributor to global warming. Studies show that an acre of Western forest captures one to two metric tons of carbon dioxide annually, synthesizing it into food for growing plants. The Nez Perce have 29 forest-restoration projects dedicated to carbon sequestration — a total of 5,000 acres. During the projects’ 80-year lifespan, the trees will soak up the equivalent of a year’s worth of carbon dioxide from a half-million cars and SUVs.
As for the money? That’s still a dream, but the Nez Perce hope that someday corporations will pay to keep these trees growing, as a way to offset their greenhouse gas emissions. Although the U.S. lacks a large-scale market for carbon sequestration, small markets are budding among states and private companies.
If this particular brand of free-market environmentalism does take off, it could inject cash into forest conservation and restoration, in an era when such funding is in short supply (HCN, 5/1/06: Burning down the house). A carbon market could function like government cost-share programs that pay landowners to protect water quality or improve wildlife habitat, says Ted Dodge with the Butte, Mont.-based National Carbon Offset Coalition. Carbon sequestration, he says, offers "another income stream for practicing good conservation."
Funds for forests
Europe has been the trailblazer on carbon sequestration. To meet the requirements of the international Kyoto Protocol treaty, the European Union has set up a "cap and trade" market system. Participating countries set limits, or caps, on an industry’s total carbon dioxide emissions. Each company gets an "allowance" for a certain level of emissions; if it wants to expand, it must obtain enough allowances to cover its increased emissions.
To get those allowances, a company has several options. It can improve its energy efficiency, or turn to solar, wind or other renewable energy sources. It can also obtain "carbon credits" by purchasing them from another, less-polluting company, or by funding projects that reduce greenhouse gases — for example, efforts to sequester carbon dioxide in trees, soil, or underground geological formations (HCN, 4/26/04: Senate rejects Energy Bill – again).
The United States, which spews more carbon dioxide into the atmosphere than any other country — nearly 6 billion metric tons every year — has refused to sign the Kyoto agreement. Here, states and private enterprises are leading the charge to create carbon sequestration markets. In the West, Oregon and Washington require new power plants to make up for a portion of carbon dioxide output through reduction, efficiency or sequestration. The nonprofit Climate Trust in Portland, Ore., funnels industry money into projects that reduce or capture greenhouse gases, including car-pooling, climate-friendly concrete manufacturing and the installation of energy-efficient traffic light bulbs (HCN, 3/6/06: Facts about greenhouse gas emissions).
Three of the Trust’s offset projects use carbon sequestration, including the Lummi Tribe’s effort to restore a square mile of logged-over forest in coastal Washington to old-growth conditions. Over the next century, that restored forest will capture 350,000 metric tons of carbon dioxide, equal to the annual pollution of nearly 70,000 cars.
To date, companies have paid the Climate Trust to offset more than 1.6 million metric tons of carbon dioxide. The Trust’s executive director, Mike Burnett, anticipates a growing domestic market — along with more opportunities to fund private-forest conservation. His group is working to educate private landowners and tribes. "I’d say most landowners have not even heard of selling carbon," says Burnett, "and, if they have, they only vaguely understand (the concept)."
Sequestration alone won’t stop global warming. But government studies estimate that forest-based carbon sequestration could reduce the United States’ total carbon dioxide emissions by 15 to 20 percent. A 2004 California Energy Commission report concluded that longer timber rotations and reforestation could offset 28 percent of the state’s vehicle emissions.
Members of the California Legislature are pushing for an immediate state cap-and-trade system. And interest in carbon sequestration is growing in the business community, according to Judi Greenwald of the Pew Center on Global Climate Change. Pew is working on carbon dioxide mitigation with 38 large companies that anticipate eventual restrictions or are already dealing with emissions control programs in Europe.
Butte’s National Carbon Offset Coalition, with help from an Energy Department grant, is building two pilot portfolios. One includes tribal projects such as the Nez Perce’s, while the second is composed of private and state forests and cropland. The portfolios can be sold through the Climate Trust or the Chicago Climate Exchange, a private, voluntary cap and trade market.
But because few American companies are required to mitigate their pollution, the coalition has found no buyers. This, despite the fact that a metric ton of carbon costs only about $3; in Europe, where government emissions caps have increased demand for carbon credits, the going price is about $35.
If a mandatory national market emerges, Dodge projects a metric ton of sequestered carbon dioxide will be worth $10 to $20. The Tramway Project alone could earn the Nez Perce $4.2 million during its 80-year life.
The Nez Perce alone won’t create a market for carbon sequestration, says Aaron Miles, the tribe’s natural resource manager. "A lot of people are going to have to come on board with this." Nonetheless, he says the movement could change the way tribes and other landowners look at the land. "Land that hasn’t been seen as real valuable could eventually be profitable — in a different mindset."