Small owners, government seen as missing link in US reforestation offsetting

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Large US industrial timber companies are beginning to embrace reforestation through carbon finance, leaving small forest owners and
government agencies key to scaling up offset efforts, a conference heard Wednesday.

The participation of big timber companies in reforestation-based offsets has been a “Goldilocks solution”, as the entities are large enough
to make a difference yet small enough to be nimble, according to Mike Smith, managing partner of forest carbon credit developer
RenewWest.

“But the really biggest opportunities are in the federal government, which has millions of acres and billions of trees that need to get
planted, and small forest owners, who are fragmented and need some sort of aggregation,” Smith added, speaking at the North American
Carbon World (NACW) conference.

Eric Sprague, vice president of forest restoration at conservation organisation American Forests, said that conventional methods of
generating reforestation-based offsets wouldn’t work on either constituent.

The federal government faces legal uncertainty regarding carbon rights, and small forest owners are wary of saddling their descendants
with forests they can’t develop, Sprague said, adding that many landowners had expressed a willingness to enter into shorter-term
agreements.

“We’ve done some market research showing buyers may be interested in this as well,” he added.

“Specifically, we’ve found some buyers, even with long-term net zero pledges, willing to claim progress over time as carbon is sequestered
in the project as the project develops.”

PJ Marshall, founder and executive director of the nonprofit Restore the Earth Foundation, said that many small forest owners had
become sceptical even of conventional carbon projects after deals fell through during the 2008 financial crisis.

However, Marshall noted corporate funders have begun pushing for the use of carbon finance in the last three years.

“In a very short period of time, the people we engage with have swung from seeing carbon markets as something to be leery of to being one
of the most cost-effective, simple approaches to getting projects on the ground through reforestation,” Marshall said, adding that there is
also a strong interest in bundling forest offsets with other ecosystem services, such as water.

On the federal front, Sprague pointed out that 80% of the reforestation needed on Forest Service land is driven by wildfires, and that
many of the rank-and-file agency members were interested in finding innovative ways of structuring deals that don’t run afoul of
government procurement and licensing guidelines.

“It’s not just at the federal level. I hear from states, too, that the carbon rights are a completely different animal from oil and gas, where
you can lease land,” Sprague said.

“There are a lot of legislative and policy issues that need to be worked through, and we need to do this as quickly as possible,” he added.

Many expressed optimism that there would be action on forest carbon from President Joe Biden’s Administration through the US
Department of Agriculture (USDA), as well as through Congress.

Marshall pointed to House Bill 2606, which aims to amend the Food Security Act of 1985 with respect to the acceptance and use of
contributions for public-private partnerships.

“This bill has bipartisan support, and I think it’s indicative of some of the things working their way through Congress now,” she said.

Smith agreed and said such bills have a way of breaking logjams on the ground, even if they’re not implemented.

“When these things work through the Senate and the House, whether they come through or not, you start to see people willing to stick
their necks out a little bit more,” Smith said.

By Steve Zwick – steve@carbon-pulse.com

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