Significance of family-owned forests for climate change mitigation
Maintaining and increasing carbon storage in family forests is crucial to meeting the country’s target of reducing net GHG emissions by 50% below 2005 levels by 2030 . Family-owned forests encompass 290 million acres, or 36% of the forestland in the US. However, only 19% (49.5 million acres) of these family-owned forests are in ownerships of 1,000 acres or more . The average ownership size is currently around 28 acres . While the sale of carbon offsets is becoming an important source of revenue for ecologically minded forest managers, forests under 2000 acres do not usually generate sufficient credits to cover the development costs associated with verifying projects using rigorous registry methodologies. Several mechanisms, including ACR’s small forest protocol on aggregated ownerships and TNC/AFF’s incentive-based family forest carbon program, have been developed to alleviate these limitations. However, these methodologies still require a minimum of 40 and 30 acres to participate respectively, and do not compete with potential revenues from timber harvesting or development.
To better understand where carbon prices need to be to include this vital portion of the US forests, TCT analyzed potential carbon revenues for the average family forest-owner in the US (28 acres) as an ACR Improved Forest Management project. For this analysis, we assumed an initial carbon stocking of 120 mtCO2e/acre (typical for well stocked pine forest in the Southeast) and included all relevant development costs. We found that at current prices, developing a stand-alone verified carbon project would cost tens of thousands more than it would generate in revenues. A hypothetical carbon price of $75/mtCO2e is the point at which the project revenues fully cover development costs and generate some revenue for the landowner. This would essentially be a pro-bono project for the developer, while the landowner could expect to receive $54,012 cumulative net revenue by Year 6 and $69,040 by the end of the 20-year crediting period. At $100/mtCO2e (hypothetical), a 28-acre IFM project would start to generate returns for the landowner and the project developer. The landowner could receive $85,128 cumulative net revenue by Year 6 and $114,463 by Year 20.
This analysis highlights the unfortunate disparity between the high costs of development and the relatively low cost of carbon. Many have suggested lowering the cost of entry as a means of overcoming this, however, rigorous measurement and modeling are the crux of what make forest-based offsets real and additional and should not be sacrificed . If small family forests in the US are to be a meaningful part of carbon markets, carbon prices will likely need to rise significantly. In the meantime, there is much progress being made to streamline the process of developing, monitoring, reporting, and verifying carbon offsets via technological innovation including satellite and aerial-imagery. The sooner these methods are fully honed, vetted, and accepted by the registries, the sooner small projects may become viable.
2. Butler, B. J., Caputo, J., Robillard, A. L., Sass, E. M., & Sutherland, C. (2021). One size does not fit all: Relationships between size of family forest holdings and owner attitudes and behaviors. Journal of Forestry, 119(1), 28-44.
3. Broekhoff, D., Gillenwater, M., Colbert-Sangree, T., & Cage, P. (2019). Securing climate benefit: a guide to using carbon offsets. Stockh Environ Inst Greenh Gas Manag Inst, 60.