Timber Markets & Carbon Sinks

The Associated Press recently published an article by Don Thompson entitled 'Program Lets Forests Grow Longer to Combat Global Warming'. Here are some comments by Tim Haab followed by excerpts from the AP article via the Environmental News Network.

Since the mid-1800's economists have understood that a private owner of a stand of trees will harvest the trees when the future returns to leaving the trees in the ground (to grow) dip below the returns that could be earned by cutting the trees. But, if the trees provide external--social--benefits beyond those captured in the private market, like for example storing carbon, then the private owner of the trees must be given the monetary incentive to incorporate these benefits. Otherwise, the private benefits and the social benefits will not be the same and the trees will be cut too soon. That's exactly the premise behind Forest Protocols program of the California Climate Action Registry.

Don Thompson explains this program:

Californians could soon invest in trees to offset the greenhouse gases they pump into the air when they heat their homes or drive to work.

The nonprofit California Climate Action Registry was set up by the state six years ago to encourage corporations and government agencies to track, and ultimately reduce, their emissions. The Forest Protocols program will allow environmentally minded citizens to pay to preserve enough trees to offset their personal carbon emissions.

The registry has calculated how much the timber industry loses by allowing trees to grow longer and bigger -- past the time they are normally harvested. The industry would then be compensated by other companies that buy carbon credits -- or shares of the trees -- to offset their carbon emissions.
...

For instance, Pacific Gas and Electric Co. in January asked the California Public Utilities Commission to let it start a program next year where customers could choose to pay about 3 percent more on each monthly bill, with the money earmarked to preserve trees in a registered forest.

The utility pumps about 5.3 tons (4.8 metric tons) of carbon dioxide into the atmosphere each year to supply the electricity and natural gas used by a typical household. If the homeowner opted to pay about $4.31 (euro3.40) each month to be invested in forests, the trees would store an equivalent amount of carbon.

"It would cost them about $4.31 a month to become climate neutral," said Wendy Pulling, PG&E's director of environmental policy.

timber markets