Articles

Case Study 2: Three Landowners' Experiences with Climate Smart Forest Programs

This article describes the experiences of three forest landowners selling forest carbon in Pennsylvania and Mississippi.

Save for later Print

Updated:

January 31, 2023

Skip to the end of the images gallery

Two people walking through a forest, one with a backpack sprayer. Photo credit: Keri Griffin-Rowles

Skip to the beginning of the images gallery

Before engaging in new investment opportunities some family forest owners like to talk to other landowners about their experiences. This article describes the experiences of several family forest owners who sold forest carbon in Mississippi and Pennsylvania. The names and identifying details of the landowners have been altered to protect the identity of the parties involved.

David in Mississippi

David owns 325 acres of forests which has been in his family since 1915. The forest is predominately pine species but also includes some hardwood species. David enjoys walking in the forest with his family and wants to pass his forest legacy to future generations. He also places a great importance on the timber, firewood, wildlife, and scenic beauty benefits provided by his forest.

David has a forest management plan developed in consultation with a professional forester. He uses practices such as thinning, harvesting, maintaining fire lines and controlling invasive plant species to help enhance forest health and sustainable use. Some technical and financial assistance was recently provided to David by the Conservation Reserve Program (CRP) to help with erosion control no part of the forest. David has also participated in the Healthy Forests Reserve Programs (HFRP) offered by NRCS to support wildlife and their habitats.

Forest carbon projects were of interest to David because of his concerns about how climate change may impact forest health and sustainability and the condition of his forest for future generations. His hope is to use carbon payments as another form of financial assistance for managing his forest. David considered several programs over the past ten years, but they never quite worked for him or his forest. He decided to enroll in the Natural Capital Exchange (NCX) after learning about their carbon program. He submitted an application at the NCX website by entering his contact details, zip code, property type, street address and a boundary of his property. Soon he was contacted by an NCX representative via email with a proposal that contained information about his forest (e.g., age of trees, type, and density of the forest stands) that NCX collected at one point using remote sensing technology. The proposal also outlined what they determined was the likely quality of his forest stands and potential carbon storage capacity in the form of a harvest deferral credit (HDC).

An HDC is a guarantee made by the forest owner that a certain amount of carbon dioxide and equivalent greenhouse gases (CO2e) emissions will be prevented from entering the atmosphere for a short period of time (e.g., one year) by delaying harvest. How much CO2e is based on the characteristics of the forest enrolled in the program (e.g., tree species, stand age and density) and the likelihood that the trees would be harvested. The NCX aggregates and converts the HDCs into metric tons of CO2e which buyers purchase to offset their carbon footprint for at least 100 years. David found out that 280 acres of his forest qualified for NCX payment, because the average stand age was greater than 15 years. David also found out that he had a total of 509 Harvest Deferral Credits (HDC) available that he could sell to NCX at an auction.

David was agreeable to delaying all harvesting for one year in the designated stands, as outlined in the proposal. The proposal then became the contract in which bids could be placed. David submitted his bid in person at an NCX auction (held four times a year) where he was able to select from a range of bid levels. Other local forest owners were there as well, and they each used a paper survey to submit a silent bid. To help inform their decisions, participants were provided information about past bids on forests in the same area. It was David's understanding that NCX would consider the bids collectively and provide the same counteroffer to all the bidders. After a few weeks, David was offered a counter bid of $12 for each credit from the auction, for a total payment of $6,100. The payment would be distributed after the performance period, at the end of the 12-month contract period in the form of a check sent by mail. It was David's understanding that after the contract ended, he could manage his forest any way that he wanted. However, David intends to submit a bid to NCX every year, except for the year that he plans to do a select harvest. When he does harvest, his HDC will likely decrease because of the changes in stand density and mean stand age. David assumed that he would be able to enroll in another carbon payments program after his contract with NCX ended and he was pleased with the process and thought the experience was excellent.

Gary in Pennsylvania

Gary is a retired forester, and he owns 130 acres of forest land of which 120 acres are forests and 10 acres are reclaimed mine land. The benefits he receives from his forest include firewood for heating, maple syrup, and recreational services. He also sees his forests as important to his mental health by inspiring positive emotions like calmness, creativity, and joyfulness. "The most satisfying and neat feeling is to listen to the whistling wind touching the evergreens on the top of forested hills", said Gary.

Gary's forest and wildlife management goals includes growing quality timber, maintaining forest canopy, controlling invasive plants, diversifying tree species, and controlling deer population. To achieve these goals, he hunts deer, kills invasive plants with herbicides, does non-commercial thinning, and plants trees in the reclaimed mine. He is also involved with Deer Management Assistance Program (DMAP) offered by Pennsylvania Game Commission (PGC) to manage deer and meet land use goals. His tree plantings and invasive plants control operations are funded through the USDA-NRCS cost-share program called Environmental Quality Incentive Program (EQIP) and Conservation Stewardship Program (CSP).

As a professional forester and being a landowner himself, Gary had known about HDCs for quite a while. He knew about NCX at their launch and was looking forward to the opportunity to sign up. Gary signed up at the NCX website by submitting his contact information and information about his property. This involved outlining his property boundary on a map and including a zip code and street address. He was then contacted by an NCX representative with information about his forest characteristics and eligible carbon volume. Gary was offered a total of 56 HDCs to not harvest trees for one year on 120 acres of his forest. Same as David in the first case study, after agreeing to the proposal, the proposal became the contract in which Gary could submit a bid. He was told the bid could range from $1 to $30 per HDC. Gary bid $10 but NCX provided a counter offer of $12, totaling in $680 for the contract year. The reason why the counteroffer from NCX was higher was due to other forest owners at the auction bidding higher. The bids of all owners were used to create an average bid which NCX then uses to determine the same counteroffer for all participants in the auction.

After one year and the harvest deferral commitments from his forest were verified, Gary was paid in the form of check. It took around 15 months to complete the whole process (including 12 months of no harvesting). He used this income to improve his forest and pay his property taxes. Gary also encourages other owners to sign up with NCX. The NCX program pays 2% of aggregate price for each of the credits he sold as incentive to others who help enroll landowners. However, Gary feels it is important that owners get more information about forest carbon management, such as those offered by extension education, to help make more informed management decisions.

During the interview, Gary also expressed that he would have liked to have more opportunities to manage for different types of forest carbon. He recognizes that currently most carbon payments are associated with delay in harvest methods. However, he is also interested in supporting the climate benefits provided by wood products like lumber, plywood, and furniture. "It is important to think about options to store carbon in transformed wood in the future", says Gary.

Jannette in Pennsylvania

Jannette is a forest landowner in Blair County, Pennsylvania. In 2016, she inherited 10 acres of forest after her parents passed away. She enjoys walking in the forest, collecting berries, and eating the game her nephews harvest in her small patch of woods. Because of these positive experiences, she bought another 30 acres of forest from her neighbor in 2019. To help fund the purchase and to make smart forest management decisions, she hired a forester and conducted a shelterwood harvest on all 40 acres of forest.

Unfortunately, shortly after the harvest, mile-a-minute vine, an invasive plant, took over 25 acres of forest and began strangling out all the plants in the forest. Another invasive plant, Japanese stiltgrass, grew thick on the skid trails and started invading the forest. There was also plenty of multiflora rose and bush honeysuckle, which competed with the native vegetation. Ticks became more common because of the habitat opportunities provided by the invasive plants, and wildlife became less common as the native plant forage disappeared. In the end, the changes in forest health, caused by the invasive plants, prevented her from enjoying her forest. Because of this Jannette became more open to considering new types of financial opportunities if they helped her restore the health of her forest.

She applied for financial assistance through the USDA Environmental Quality Incentives Program (EQIP), a conservation program that helps farmers, ranchers and forest landowners integrate conservation into working lands. Unfortunately, funding was limited in her area and her property was not selected. In late 2020, she used the Woods Camp website to find opportunities for financial assistance and discovered the Family Forest Carbon Program (FCCP) by the American Forests Foundation. A few months into 2021, she got an email that the FCCP program has expanded into Blair County and her property could qualify. The FCCP representative came to her property and examined the invasive plant problems in her forest. It was determined that her forest could benefit from the Future Forests program under the FCCP and she was offered $280 per acre over 10 years to control the invasive plants for a total of $11,200. She initially received $196 per acre to begin management, which was enough to hire an applicator. The next two payments were $27.77 per acre at year 5 and $8.51 per acre at year 10 (net present value at a 3% discount rate). She used the money from FFCP to hire her uncle, a recently retired PennDOT pesticide applicator, who has started managing the invasive plants by spraying them with herbicides.

Closing Thoughts

These owners are good examples of early adopters who want to use carbon payments to help achieve a variety of management objectives. They also expressed strong ethical views about stewardship and managing forests for future generations.
The owners in this article both have experience enrolling in a variety of state sponsored financial and technical assistance programs. This may have made the idea of enrolling in a new incentive program seem less risky.
All the owners were successful in enrolling in different programs and receiving payments from selling their forest carbon. However, some had to wait a long time to find a program that was a good fit for them. Gary would have also liked to support carbon projects that use wood products to provide climate benefits.
All the owners were willing to manage carbon for an extended period of time, however, some did like the flexibility provided by a shorter contract. David was also interested in the option of switching to another program in the future.
Because the process and contracts offered could change in the future, these owners' experiences may not be everyone's experience. It is important to gather information from others and work with a professional forester before committing to a carbon program.

This article was produced by the Forest Owner Carbon and Climate Education (FOCCE) program. What do you think? Please take this short survey.