Growing Carbon: Part Two
The economics of forest carbon
Introducing The Eco Update
I've got a quick update here before I get into my latest post: I'm introducing a new section, called The Eco Update, to the newsletter. This section is a quick round of up recent ecology and environment stories in the news. I'll provide links to the stories, along with some occasional summaries or comments, to keep you up to date on the current state of the planet. As always, thanks for reading!
The Eco Update #1
Popular Mechanics: A Species Has Gone Extinct in the Keys, and It's the Start of a Devastating Trend
The Key Largo tree cactus is the first U.S. species to experience local extinction due to rising sea levels. While there are still populations of the species in Cuba, the Bahamas, and the Caribbean, the Florida Keys population has disappeared. This kind of biodiversity loss will only increase as sea levels rise and hurricanes intensify.
The Carbon Brief: Every 0.1C’ of overshoot above 1.5C increases risk of crossing tipping points
It’s well established that there are thresholds of global temperature that, if crossed, will shift ecosystems into entirely new states. Think, for example, large portions of rainforests changing to dry savannah, loss of coral reefs, and collapse of agricultural systems. Every tenth of a degree over 1.5C the planet warms increases the risk that we’ll reach these thresholds, and we’re already at 1.3C of warming.
The Guardian: US Forest Service failing to protect old growth trees from logging, critics say
“The largest logging projects I’ve ever seen are targeting the last, best remaining old growth trees left in the country,” said Chad Hanson, a forest ecologist and co-founder of the John Muir Project.
The economics of forest carbon
As I write this, Hurricane Helene is barreling down on Florida, about to cause potentially catastrophic damage to a several hundred mile stretch of the Gulf Coast. The storm’s rapid intensification is the result of unusually warm waters in the Gulf of Mexico, linking this storm to the direct consequences of global warming and anthropogenic climate change. In a post about using forests as a solution to climate change, it’s hard to overstate how important is that we get this right.
Speaking of forests, there's a lot of buzz in the forestry world right now about how best to conserve, protect, and sustainably manage them. In my previous newsletter, I highlighted the science behind managing forests in ways that prioritize carbon storage, and now I want talk a bit about the economic aspects and why there's so much debate.
The whole point of managing forests to store carbon is to reduce the amount of CO2 emissions in the atmosphere, and thus to slow global warming. We know that in order to do this we have to harvest forests at lower intensities and on longer time intervals between harvests, but doing so has economic implications. The scale of timber production in the United States is in the hundreds of billions of dollars, with most of the harvested biomass going towards pulp and paper products. Any slowdown in harvesting means less revenue, so if managing forests for storing carbon requires less harvesting over longer periods, there's a very clear and direct contradiction here. How can forest management remain profitable while also prioritizing carbon storage?
This is where carbon offset credits come in. Without getting too into the technical aspects of how they work, the premise is that trees and forests enrolled in offset programs generate carbon offset credits through the carbon they sequester with their growth. Forestland owners can make money by selling the offset credits that their forests generate, giving them additional income at lower levels of harvesting. In turn, companies, institutions, and even individuals can buy carbon credits to offset their emissions.
Because the amount of credits generated depends on the amount of growth that takes place over the enrolled period, it depends on the same variety of factors that influence tree and forest growth. Some of these things are outside of the forest owners control, like climate and location, but how the forest is managed is a crucial aspect of how these programs work. The goal is to implement forest management practices that increase the amount of carbon stored on the land (based on the best available science) than what would be stored if different management practices were taken.
This all makes sense in theory–forest landowners get paid for harvesting less often and at lower intensities, while the growth these forests experience helps slow climate change by removing CO2 from the atmosphere. In practice, it's not so simple. You may have seen in the news that there's been a lot of scrutiny over these programs lately. The more closely these programs are looked at, the more people are finding that they aren't sequestering as much carbon as the amount of sold credits suggests. You might ask how that could be, if the amount of credits generated is supposedly based on the amount of carbon sequestered via tree growth. The answer has to do with both how carbon is sequestered and how this process is monetized.
One of the major sources of discrepancy is something called "permanence". Forests actually release carbon back to the atmosphere when trees die from things like fire, drought, disease, storms, and harvesting. So, permanence refers to how long the carbon is stored in the forest before it's released, or how "permanent" it is. Carbon offset programs vary widely in terms of how long they guarantee that carbon will be stored in the forest. Some standards use a 100-year time horizon, while some only guarantee carbon storage for 30 years. This begs the question, what if something happens during the program timespan that kills trees and causes the carbon to be released?
As I mentioned above, there's a number of risks (drought, wild fires, disease, etc.) that can cause tree mortality. Climate change is exacerbating almost all of these risks, and so carbon offset programs need some way to ensure that the carbon stored in the forest isn't going to be released back into the atmosphere during the project time period (all carbon stored in forests is temporary, so it's impossible to achieve actual permanence forever).
To account for these risks, offset programs include an insurance buffer pool, which just means that a portion of all generated credits must be contributed to the pool to make up for any losses as a result of unplanned disturbances. Again, this makes sense on paper, but the reality is that forest disturbances are occurring more frequently and becoming more destructive as a result of climate change. A recent study in California found that the state's entire carbon offset program could be overburdened by a single wildfire or severe drought event. In essence, these programs don't set aside nearly enough of the credits they generate in order to adequately mitigate risks to the carbon stored in the forests.
It's easy to understand why this the case when we consider that the monetization of these credits introduces market dynamics. The more credits that are set aside as a risk buffer, the fewer there are to sell to businesses for offsetting emissions, which drives the price up and the sale of credits down. At the same time, businesses want to their minimize costs, so they seek out the cheapest offset credits on the market, which typically have the least environmental integrity.
All of the above contributes to the current situation where more credits are being issued than the amount of carbon actually being stored, not enough credits are being set aside to account for risks to forests, and the bulk of sold credits have low environmental integrity. Collectively this means that businesses can buy cheap offset credits that have little to no impact while claiming they are carbon neutral and potentially receiving tax breaks, all while continuing to emit carbon dioxide into the atmosphere.
These failures highlight the limits of using the principles of capitalism to solve a problem largely created by unchecked economic growth. Monetizing our environment isn't the way to achieve sustainability. Instead, we need to address what is actually contributing to ongoing climate change, namely the burning of fossil fuels and emitting greenhouse gases into the atmosphere. Only by reducing these activities can we slow, stop, and reverse the damage.
To cite this article, use the following:
Lockwood, B. (2024). Growing Carbon Part Two: The economics of forest carbon. _Brief Ecology Newsletter_, 6. Retrieved from: https://benlockwood.substack.com/p/growing-carbon-part-two
Are you following @Chris Lang @REDD-monitor? Really important articles there about how bad the ethics of this can get.