With the right incentives, Maine's forest landowners could be the next big carbon offset players
Maine wants to open up the multi-billion dollar carbon offset market to small forest landowners, creating a voluntary, incentive-based program to increase carbon storage, and encouraging forest management while maintaining current timber harvest levels.
The plan would establish a dedicated funding source and would revise existing state and federal land conservation programs to include projects that store carbon, reduce greenhouse gas (GHG) emissions and prepare for climate change impacts.
Maine's natural and working lands currently play a critical role in capturing atmospheric carbon, sequestering the equivalent of 75 percent of the state's GHG emissions per year. Studies show that net growth in U.S. forests currently offsets 13 percent of total U.S. carbon dioxide (CO2) emissions annually.
But figuring out how to monetize these offsets could be easier said than done.
Since last year, the Natural and Working Lands (NWL) Work Group and the state's Climate Council have been exploring how a carbon storage plan can be implemented utilizing Maine's vast land resources to offset harmful emissions.
“There is definitely a lot of interest in this issue,” Tom Doak, Executive Director at Maine Woodland Owners, told NPM. “I get a lot of calls from people saying, ‘I have trees, I’m careful with my management, I obviously have carbon. How do I get in the carbon market?’ And my answer at this point is, 'you can't.' I think it really comes down to a scale issue and probably a length of time issue that we’re going to have to deal with in order to make it work.”
Woodlands cover nearly 90 percent of Maine, making it the most forested state in the nation. Maine's natural and working lands are the foundation of significant sectors of its economy, including agriculture, forestry and wood products, and tourism. The vast majority of these lands --93 percent-- are privately owned.
“There are 86,000 owners of forestland in Maine between 10 and 10,000 acres, so a lot of people have a piece of heaven,” Doak said. “Instead of a traditional carbon credit, can you incentivize certain practices that are going to increase the benefits from the forest and sequester more carbon? Can you incentivize landowners? There’s a long history of programs that have supported landowners to do certain practices over time, and usually that's to increase the value of the timber or make long term investments. Well, that same model could possibly be used on increasing carbon sequestration on the land.”
Maine Woodland Owners owns nearly 8,000 acres of land in dozens of communities across the state, and Doak says the organization has already done a carbon inventory of its 73 land parcels.
“Now we know how much carbon we have,” Doak said. “Now we’re looking at taking our land or some combination of lands and plugging them into the different systems because we can see with real data now. We’re testing different systems and approaches. We may or may not sell carbon, but we can evaluate different approaches with real data. Remote sensing has come a long way. The traditional way of measuring is expensive, but can you do some of this remotely? Can you tell how much carbon you've got from a satellite? And I think that's the future. If you can do that, now you're changing the cost structure.”
The devil's in the details
Mark Berry, Forest Program Director at The Nature Conservancy (TNC), believes that Maine has a critical role to play in carbon offsets, but says that monetizing the initiative will take some time--and ingenuity.
“The carbon that is already out in Maine’s forests--in the trees, the soil--is based on recent research according to the University of Maine, which is equivalent to about 400 times Maine’s annual emissions from its economy,” Berry told NPM. “And so that's really a starting point for us in thinking about the role of Maine’s forests and climate change-- that what we already have is hugely important. And we’re in a context where we know we’re losing forestland.”
It’s estimated that Maine will lose approximately 10,000 acres of its undeveloped land every year--most of it forest--and that figure is expected to significantly increase.
“We do think that incentives are an important part of a strategy for slowing forest loss,” Berry said. “And those incentives can help make forest ownership and good stewardship of private forestland more economically viable and give an option that can complement timber harvest and see that financial return from forestland. It's not a perfect or complete solution, and we’re going into this new task force process keeping an open mind about ideas and alternatives. But we think it's unlikely that the state is going to have the budgetary resources to fund a big incentive program itself.”
The task force is exploring the state’s current land taxation policy through legislation introduced by the Governor to update open space and farmland taxation programs in a way that incentivizes climate-friendly land management practices, making it more attractive to woodland owners.
The task force is also considering funding the currently eligible but unused “wildlife habitat” criterion of the Farm and Open Space Tax Law to provide landowner financial incentives for conserving parcels of land with high biodiversity.
Another option is maintaining the Tree Growth Tax Law as an established program for landowners committed to active forest management.
“There are things that can be done to shift the system in a positive direction,” Berry said. “There are programs coming from the marketplace to help make carbon incentives available to private landowners at smaller scales. TNC is involved in one of those, and there are others. It does seem feasible that in a couple of years, owners of smaller forest properties in the range of 40 to 100 or 1000 acres could have a clearer path to a financial incentive to increase forest carbon.”
Berry says the initiative has seen widespread support, but that the devil will be in the details.
“One concern comes from the forest products industry that a strategy that focuses on increasing forest carbon could compete with the timber harvest and increase challenges for the forest products industry, which provides a lot of important employment in Maine communities,” Berry said.
There are also social justice and equity considerations surrounding whether a program to pay landowners is rewarding those who already have wealth.
And then there's the issue of funding.
“If the source of the funding is from the private market, then questions come from that perspective around whether that funding is enabling other emissions or not,” Berry said.
But success of a carbon offset program will ultimately come down to whether landowners can derive some real benefits from the initiative.
“If you can provide some model by which there’s a reasonable expectation of covering costs or some return--if you can take the cost pressure of the conversion of those lands or the division of the land--then that's helpful just in itself,” Doak said. “And carbon credits could play a role in that. It's really in the overall management of existing forestland that you're going to see the change. Can you manage your land for high-value forest products and for carbon? That's what we’re looking at. Instead of saying you're just going to lock it up for 100 years, can you produce high-quality wood products that store carbon?”
Using structural materials as ways to store carbon could open up a host of possibilities, according to Doak.
“We’re going back to buildings made out of high-quality wood,” he said. “The amount of wood stored in a wood building has a life of decades and decades. That carbon sits there in that wood, so you've sequestered it. It's sitting there in the framing structure of a house or commercial building. Now you're talking about a different dynamic. Now you're taking those trees and making solid wood products out of them and creating growing space on the land and sequestering more carbon. That's the model that we see as the future.”