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Timber companies stand to benefit from new climate law

Susan Robinson/Ebbetts Pass Forest WatchA large pile of debris is left after a cut near Dorrington in Calaveras County.

California timber firms could emerge as big winners in the state’s fight against global warming, earning millions of dollars through the sale of carbon credits under a new set of rules approved by the Air Resources Board this week.

The plan has stoked controversy among environmentalists who assert it gives the timber industry too good a deal, enabling them to clear-cut trees at the expense of the overall vitality of the forests, while the timber industry claims the plan will help them promote the storage of carbon dioxide, a greenhouse gas, in the trees on their land.

The state board has responsibility for implementing AB 32, California’s landmark effort to limit greenhouse gas emissions. On Thursday, the board approved a new cap-and-trade system aimed at bringing emissions to 1990 levels by 2020. It will allow companies to cancel out their emissions by purchasing carbon emission reductions somewhere else. A significant portion of those credits, or offsets, are expected to come from the carbon-storing capacity of forests.

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One of the most controversial provisions would enable timber companies to obtain credits by replanting trees in clear-cut areas of the forest. The protocol also makes California the first place in the world to assign carbon credits to wood products created from the trees themselves.

For those credits, the state relies on a U.S. Department of Energy registry that estimates the carbon in everything from wooden chairs and bed frames to two-by-fours made from fir, pine, cedar and hemlock trees harvested in California.

Timber companies would then be free to sell its pool of credits to utility companies, refineries and major industrial enterprises which need them to meet their emission limits.

The state has proposed a minimum price of $10 a ton and estimates that 20 million tons will be needed over the first decade. The total offset market will likely reach $200 million by 2020, according to Point Carbon, a news service offered by Thompson Reuters.

David Bischel, president of the California Forestry Association, representing timber harvesters and processors, says that the new rules, known as the Forest Protocol, “help to monetize an important environmental benefit by encouraging more standing timber in the forests, and more wood products used by society.”

Early drafts of the protocol did not permit clear-cutting, according to Jeff Shellito, an environmental consultant and former aide to state Sen. Byron Sher, now retired. But in 2007, the timber industry began lobbying to alter the protocol in their favor. A nonprofit organization, the Climate Action Reserve, which was created to establish standards for the verification of greenhouse gas emissions and reductions, is the primary author of the new rules.

In 2002, Sher had authored legislation that established forest preservation standards for California's then-voluntary carbon market. “We went to great pains (in 2002) to ensure you couldn’t get carbon credits from clear cutting,” Shellito said.

The biggest timber company and landowner in California, Sierra Pacific Industries – with some 1.9 million acres across the state – was the most aggressive individual timber company lobbying on the regulations. Over the course of 2007 and 2008, Sierra Pacific paid $37,500 to California Strategies, a major Sacramento lobbying firm, to present its case.

The company also nurtured a relationship with Gov. Arnold Schwarzenegger. Sierra Pacific has donated $29,600 to the governor’s campaign committees, and its billionaire owner, Archie Aldis "Red" Emmerson, hosted a $250-a-plate fundraising lunch for the governor's reelection campaign at his estate outside of Redding. Emmerson is listed by Forbes as one of the world’s 500 wealthiest people.

Altogether, according to campaign contribution records filed with the secretary of state, the company has donated about $890,000 to political candidates and ballot measures in California in the past five years.

The California Forestry Association, a frequent donor to political causes and candidates, also reported spending $245,000 lobbying state agencies on a variety of issues in 2007 and 2008, including climate legislation and the Air Resources Board policy on greenhouse gas emissions.

Among the company’s requests was a plan to qualify what it calls “even-age management” of its forests for carbon credits. Even-age refers to trees that are planted at the same time for future cutting.In September 2007, Sierra Pacific sent a six-page letter to the Air Resources Board outlining the changes it would like to see in the protocols – most of which the board accepted.

A letter from Sierra Pacific to the California Air Resources Board outlines the company's recommendations.

“In our view,” wrote the company, “there is no valid reason for requiring multiple ages of mixed species on every acre. Indeed, natural forests before the intervention of humans often consisted of large tracts of even-age stands which were generated from fires. Today’s management often mimics this type of forest through the practice of even-age forestry.”

Under this definition, a significant portion of Sierra Pacific’s land could be credited over the next century. The company would have to verify its claims of how much new carbon is being stored in its replanted trees – which it would be entitled to cut again in 50- to 80-year cycles. Sierra Pacific nurseries are already breeding new varieties of native trees to heighten the quantity of carbon in their trunks, leaves and roots. Sierra Pacific officials declined to comment for this article, referring reporters instead to the California Forestry Association.

Critics, like former legislator Sher, say that the new protocol violates some of the basic principles of forest conservation. What the timber industry calls “even-age management” Sher calls “tree plantations.”

“The forest companies are interested in being able to harvest their trees, and replant, and then produce a new asset that they can sell,” Sher said. “It undermines the biodiversity of the forest. You end up with tree plantations that are much more vulnerable to fire and disease.”

Earlier this month, 47 environmental and conservation groups, including the Sierra Club California and the Center for Biological Diversity, protested to the Air Resources Board.

A letter from 47 environmental groups to the California Air Resources Board listing their reasons of protest.

“The protocol subsidizes the current business as usual: aggressive timber management,” said Brian Nowicki, a policy analyst with the Center for Biological Diversity, a group that has sued the state over Sierra Pacific’s logging practices. Nowicki questioned whether the rules encourage companies to do anymore than they’re doing already.

Other environmental groups, like The Nature Conservancy and Environmental Defense Fund, support the idea of creating financial incentives to keep trees with more carbon standing and rewarding landowners for agreeing not to convert forests into commercial developments for at least one hundred years, which is another provision of the protocol.

“Landowners will have to go above and beyond their current practices,” comments Michelle Passero, a senior climate policy adviser to The Nature Conservancy California. “And that should lead to more protection and better management of our forests.”

To Susan Robinson, however, that sounds like clear cutting as normal. Robinson, a former safety manager for Chevron, lives in the area around Ebbetts Pass, a community in Calaveras County that has been one of Sierra Pacific’s most heavily clear-cut areas. She’s now a leader of the Ebbetts Pass Forest Watch, an environmental group representing residents of the small towns in and around the southern Sierras.

During harvest season, which continues until the snowfall, she sees the timber trucks heading down from the mountain headed for the company’s mills in Redding and elsewhere. She says that the new protocol will enable timber companies “to transform natural forests into tree farms.”

"We’re not against logging,” she said. “But we want to see it done sustainably, and the forest protocol does not do that.”

Gary Gero, president of the Climate Action Registry, said he was given a narrow goal: to fight climate change by increasing the quantity of carbon dioxide in trees and wood. “The primary purpose of the protocol,” he said, “is to ensure that the total amount of sequestered carbon increases over the next hundred years."

The registry, he said, refused one of Sierra Pacific’s additional requests – that it grant carbon credits for wood discarded in landfills.

The tension between preserving forests and preserving trees for their carbon lies at the heart of the controversy. The state’s climate legislation calls for the air board to "design emissions reduction measures … in a manner that minimizes costs and maximizes benefits for California’s economy.” Carbon in trees are the cheapest of various options that would create an abundant supply of offsets, making all credits relatively inexpensive.

Mary Nichols, administrator of the Air Resources Board, said that California “already has the strictest timber standards in the nation, and we will leverage those standards onto other states which hope to participate in the California forest protocol.”

Those standards limit clear cuts to 20 acres and require replanting areas of cut trees. She said that states like Washington and Oregon, which permit clear cuts of as much as ten times that, would have to abide by this state’s limitations if its landowners are to gain credits to sell to California industries. The same applies to forests in Brazil and Chiapas, Mexico, which are likely to be the first foreign participants in the California program.

“The advocacy groups in the forest area,” she said, “tend to value forests primarily for their ecosystem value, whereas the industry is looking at carbon as elements of value on the land.”

She says that the state board is considering additional provisions to “make it absolutely clear that we are not going to provide any incentives for even-aged management.”

The measures, she said, would be aimed at ensuring that “no projects [would be] registered as offsets that had been done using any amount of clear cutting at all.” Adopting those rules, Nichols said, could take as long as two years.

The California Forestry Association would not comment on the prospect of further tightening of the rules. “We generally find it difficult to comment on potential future events,” the group’s communications director, Bob Mion, said in an e-mail.


Looking for more information about carbon credits? Read our frequently asked questions and contact officials to weigh in on the debate.



Filed under: Environment, Daily Report


Comments are closed for this story.
Vivian Parker's picture
We--the public, the state, and the planet have all been snookered with the development of these protocols. I can see Henry Paulson, former Sec'y of Treasury under Bush and Company, and board member of The Nature Conservancy, laughing around the board table while toasting their success. Yet another fake market scheme that will further enrich the already wealthy. This sweetheart deal for the timber industry permits the continuation and acceleration of unprecedented conversion of native forest into uniform, single species tree farms (and not organic, either). These tree farms are not forests—they lack all the components of native forests—the only thing they contain are commercial tree crops. They are “managed” with massive applications of very toxic chemical weed killers to ensure the native species don’t grow back. For this, timber companies will get rewarded with offset credits that they can sell on the cap and trade market. This, in spite of the fact that forests that are clearcut will take 80 to 100 years or more to recoup the carbon emissions lost during the destruction. This, despite the fact that every clearcut destroys the homes and habitat of countless species of plants and animals, many of which do not occur anywhere else on the planet but right in the forests of Northern California—in our Sierra Nevada, the Cascades, the Klamath Mountains, the Trinity Alps, the Coast Range and the Siskiyous. Thanks, Mary Nichols. Some clarification to this article: The new ARB forestry cap and trade regulations do in fact include credit for lumber "stored" in landfills...as long as the amount harvested in a timber offset project doesn't exceed business as usual. And "business as usual" is explicitly defined as the basis for what constitutes a project qualifying for offset credits...and business as usual in California includes clearcutting. Virtually every timber harvest plan submitted by Sierra Pacific Industries (SPI) includes hundreds of acres of clearcuts. It is fraudulent to delink the term clearcutting from the term "evenaged management" as the ARB had done in their forest protocols...clearcutting is simply the tool used to implement evenaged management. Mary Nichols’ reference to fixing this at some later time is simply happy talk...the industry got 100% of what they wanted in these regulations, and they are a complete sham and a fraud. Welcome to the 21st century, where fraud and deception rule beside the super elites.
Sarah Terry-Cobo's picture

Hi Ms. Parker,

thank you for your comment.

Regarding the clarification you pointed out, "The new ARB forestry cap and trade regulations do in fact include credit for lumber "stored" in landfills...as long as the amount harvested in a timber offset project doesn't exceed business as usual."

As you already know, understanding the forest protocol is not an easy task, because the document is quite complex and filled with technical terms used by the timber industry. The way I understand the protocol's treatment of the wood waste in landfills, it does not allow a timber company (or any forest project developer) to include the wood that is sent to landfills as "stored carbon," included in their overall calculations It does, however, penalize a company for reducing the amount of wood waste sent to landfills, depending on their baseline.

Unfortunately, describing the intricacies of this one element is complicated and takes away from the overall thrust of the piece. The amount of space with which we have to work is limited, so it is not possible to illuminate all of the scientific details of the forest protocol. For this reason, we stand by with how the article reads regarding landfills and wood waste.

As you correctly note, "And 'business as usual' is explicitly defined as the basis for what constitutes a project qualifying for offset credits...and business as usual in California includes clearcutting."

During my reporting, I did discover how incredibly difficult it was to establish the baseline--and differentiate what exactly is "business as usual." I know that the baseline is one of the many contentious issues about the forest protocol. Again, unfortunately, we did not have enough space to describe the many issues with determining the baseline in this article.

Thank you for your interest in this issue, and I will post an update to the comment section here when we follow up with what happened to the forest protocol at the December 16, 2010 Air Resources Board Meeting.

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