While much has been written from a theoretical perspective about markets for ecosystem services, few on-the-ground projects currently exist. Yet the projects that do exist provide one of the best windows onto what actually works in practice. That’s why WRI has issued a new brief, Insights from the Field: Forests for Climate and Timber to discuss an innovative initiative called the Carbon Canopy. The Carbon Canopy, led by NGO Dogwood Alliance and office products company Staples Inc., is a consortium of companies (including Domtar and Coca Cola), corporate and non-industrial private woodland owners, and NGOs (including Rainforest Alliance and Pacific Forest Trust) that seeks to leverage markets for ecosystem services with the aim of increasing the area of southern U.S. forests certified under sustainable management. Currently, the Carbon Canopy has projects under development that span approximately 26,000 acres in Appalachia.
When managed appropriately, forests can yield many economic, climate, water, and other benefits, including forest products. And placing forests under sustainable certification can help ensure these benefits into the future. However, only about 18 percent of the 214 million acres of southern U.S. forests is currently certified as meeting sustainable forest management standards. This low penetration may be due in part to many woodland owners lacking information about certification, being uncertain of its financial benefits, or finding the cost of becoming certified—the assessment and monitoring fees, the cost of preparing management plans, and other expenses—economically prohibitive.
Emerging voluntary and compliance markets (driven as a result of a regulatory requirement) often have provisions for greenhouse gas reductions or emissions avoided by preventing forest conversion or by changing forest management practices. These reductions or avoided emissions are considered “forest carbon emission reductions.”
A “forest carbon offset” is a metric ton of carbon dioxide equivalent (CO2e), the emission of which is avoided or newly sequestered and is purchased by greenhouse gas emitters as a cost-control mechanism to compensate for emissions occurring elsewhere.
In order to increase the number of acres under sustainable certification, the Carbon Canopy’s initial focus has been on linking forest carbon offsets generation (see Box 1)―that meet the requirements of the Climate Action Reserve (CAR) and Californian Air Resources Board (ARB)―and certified forest management standards (based on the Forest Stewardship Council (FSC) standard).
Meeting the California offset standards will allow projects to sell into California’s carbon market, where a stringent cap-and-trade program is expected to create robust demand for offsets.
The institutions in the Carbon Canopy partnership provide the technical and business expertise necessary to do actual project development, and Carbon Canopy acts as an important facilitator between the landowners and the corporate buyers of the carbon offsets and wood products.
Andrew Goldberg, Director of Corporate Engagement at Dogwood Alliance, views the development of the Carbon Canopy and the broader ecosystem services marketplace as a critical opportunity to protect Southern U.S. forests:
“The Carbon Canopy is building a new paradigm for landowners, one in which they can actually profit from improving forest management practices that protect our climate, water and biodiversity.”
Within this innovative approach, carbon offset revenue can compensate woodland owners for the cost of certification, and provide a new revenue stream. As other ecosystem markets develop, such as payments for watershed services, Carbon Canopy will look to pursue additional revenue streams.
Mark Buckley, VP of Environmental Affairs at Staples, believes that the Carbon Canopy approach offers a win-win solution:
“Staples and other buyers can purchase carbon offsets and the fiber supplied by engaged woodland owners and, in turn, woodland owners are financially compensated for providing valuable benefits to society, which helps protect forests.”
The issue brief discusses the Carbon Canopy’s experiences since 2009, when the project began. It highlights a number of insights for other organizations seeking to build and expand markets for forest carbon offsets linked with forest certification. These insights apply to building demand, ensuring supply, and creating the transactional infrastructure for such markets. For instance, as profiled in the brief, organizations seeking to replicate the Carbon Canopy approach should:
Actively recruit buyers with a potential business case for purchasing forest carbon offsets, certified products, or both to build demand. One set of prospective buyers is companies that have established voluntary targets for reducing their greenhouse gas emissions.
Invest significantly in educating woodland owners about sustainable forest management certification and forest carbon offsets in order to build supply. One effective practice is to leverage existing woodland owner networks for such educational outreach.
Engage experts on both the forest certification and forest carbon project development standards early on in the process to inform the development of the pilot projects. This helps ensure that the process runs as smoothly as possible from start to finish.
Replicating the Carbon Canopy’s Approach
If approached with these insights in mind, The Carbon Canopy and other similar projects can provide a “multi-win” opportunity for woodland owners, buyers of ecosystem services, and the environment. Woodland owners can earn a new revenue stream. The availability of certified forest products can grow for forest product buyers. Interested buyers can also gain access to a greater availability of forest carbon offsets. The availability of forest carbon offsets can also increase for interested buyers. In addition, people and the environment can enjoy the co-benefits arising from sustainably managed forests such as clean water, recreation, and wildlife habitat.
The Carbon Canopy is currently spearheading three pilot projects -- each covering several thousand acres and including both corporate and non-industrial private landowners -- in the Appalachian regions of North Carolina, Tennessee, and Virginia. These projects are scheduled for completion in 2012. For more information, please contact: Andrew Goldberg.
This brief is part of a series, the Southern Forests for the Future Incentives Series, about innovative financial mechanisms designed to help private landowners in the southern United States sustain their forests. To access this brief and other issue briefs in the Southern Forests for the Future Incentives Series, and to learn more about southern U.S. forests, visit: www.SeeSouthernForests.org. Developed by WRI with support from Toyota, this interactive site provides a wide range of information about southern forests, including current and historic satellite images that allow users to zoom in on areas of interest, overlay maps showing selected forest features and drivers of change, historic forest photos, and case studies of innovative approaches for sustaining forests in the region. To order free hard copies of this issue brief, and other briefs in the Southern Forests for the Future Incentives Series, please contact us.