What is Selling Forest Carbon Like? Three Landowners' Experiences

Private landowners are responsible for 69% of forests in Pennsylvania, but until recently only large landowners (those who owned 2,000 acres or more) were able to participate in forest carbon markets. But there are now, several new programs that focus on smaller forest owners, such as the Natural Capital Exchange (NCX) and the Family Forest Carbon Program (FFCP). Since forest carbon is still a new market commodity, selling carbon may seem a bit complicated to the average forest owner. This paper describes the experiences of several small forest landowners in Pennsylvania who recently enrolled in a carbon program. The names of the landowners and identifying details have been changed to protect the identity and privacy of the parties involved.

Case Study 1: The Wilsons

The Wilsons are a pair of very active forest landowners in Bedford County, PA. They own roughly 135 acres of land, 130 acres are forest, and the other 5 acres are gardens, chicken coops, and other native habitat. They have owned the land for more than 35 years and they want to manage the forest to enhance biodiversity and conserve it for future generations. In 2010, they donated the development rights to the Western PA Conservancy through a conservation easement. The management they conduct includes harvesting timber and deer, installing deer fencing, and controlling invasives species to help promote healthy forests. To help improve their management activities, the Wilsons are always looking to learn new things about their forest. So far, they have worked with their local DCNR Service Forester, NRCS Forester, Penn State Extension, Forests for the Bay, PA Game Commission Wildlife Diversity Biologist, and are certified Forest Stewards. These experiences and relationships led them to join the Golden-Winged Warbler Conservation Program (the Golden-wing warbler is a near endangered bird that needs early successional habitat). With funding through the USDA Environmental Quality Incentives Program (EQIP) they conducted a seed tree harvest on 30 acres of their forest in 2014. This harvest opened the canopy and created excellent habitat for the Golden-wing warbler. The funding allowed them to install a deer fence around the harvested area to reduce deer browse and ensure regeneration success. The funding could have also been used to cover the cost of harvesting non-marketable timber, but their logger was able to find a market for most the low-quality wood from the harvest, so the Wilsons were able to profit from the sale of timber.

Through their education, the Wilsons were made aware of forest carbon markets and became interested in learning how their forest could help support climate change solutions. What was still of primary importance to the Wilsons was being able to create small openings in the canopy to support a diversity of birds and native plants by harvesting timber. Another important objective is to protect the forest for future generations, so they were willing to consider a multi-year contract. After attending a Penn State Extension program about forest carbon, they found that they qualified for both the NCX and FFCP market programs. After exchanging emails with friends who sold carbon through NCX, they expected to earn $8 an acre on the 100 acres of mature forest for a total of $800 in a year. The 30 acres that had been harvested could not be enrolled. With FFCP, they were offered $280 an acre to help with competing plant control in the 30 acres of warbler habitat (as part of Enhancing the Future Forests program) and $230 an acre for the 100 acres of mature forest (through Growing Mature Forests), which totaled $31,400 over a 20-year contract. To help make comparisons between programs, the authors of this paper estimate that the FFCP payments for the Wilsons would have an average annual net present value of $4.00/acre (3% discount rate). Through NCX, they expected to make $8 an acre on the 100 acres of mature forest for a total of $800 in a year. All NCX contracts are for 1 year at a time and payment levels are renegotiated each year. They would get nothing for the 30 acres that had been harvested for warbler habitat. Assuming they would continue to get $8 per acre for the next 20 years the authors of this paper estimate the NCX payments have an average annual net present value of $2.60/acre (3% discount rate). One key difference between the programs was that the FFCP allowed them to create small gaps in mature forest areas, which the NCX program did not allow that practice. In the end, the Wilsons elected to participate in the FFCP program.

Joining FFCP involved a multi-step process. They had an older forest management plan, but part of joining FFCP meant they needed a new forest management plan written by an approved forester. Forests for the Bay had offered to give them almost $1,000 for a forest management plan and FFCP gave them $800 to supplement the cost of writing a plan, but it was challenge for them to find a forester who would write one for under $2,000. After two months of trying to find a forester, they were finally able to find forester who wrote a plan that met the criteria for both programs. The Wilsons are now fully enrolled in the Family Forest Carbon Program and have been so for several months.  

Case Study 2: Jannette Weaver

Jannette Weaver is a new forest landowner is Blair County. 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 forest health.

She applied for money through EQUIP to control the invasives species but EQUIP has limited funding and her property was not selected. After attending a Penn State Extension webinar called Forest Carbon Markets 101, she thought she may qualify for the Family Forest Carbon Program. In late 2020, she put her property in the website Woods Camp, but at that time the FFCP had not expanded to Blair County. A few months into 2021, she got an email that the program expanded, and she now qualified. The FFCP representative came to her property and examined the invasive plant problems in her forest. It was determined that her forest qualified for the Future Forests program under FCCP and was offered $280 an acre to control the invasives. The contract would provide a total of $11,200 over 10 years, which she determined was sufficient for helping offset the cost of managing the invasive plants and promoting tree regeneration. that she received $196 per acre to begin management, which was enough to hire an applicator. The net present value of the next two payments was $27.77 per acre at year 5 and $8.51 per acre at year 10 (3% discount rate). She used the money from FFCP to hire her uncle, a recently retired Penn DOT pesticide applicator, who has started managing the invasives by spraying them with herbicides.

Case Study 3: Linda Roth

Linda had been a small business owner in Philadelphia, but with the economic crunch caused by Covid, concerns over her aging parents, and a desire to return to the land, she sold her business in 2020 and moved back to her family’s farm in Clearfield County. The farm was a small dairy that was struggling to get by—Linda’s parents were getting too old to care for the cows, they could not afford the new equipment which was needed to maximize output, and the new technology that they needed to keep the farm functioning was becoming too complicated for them.

After taking a serious look the farm’s books, speaking to her local Extension educators, and doing some deep-thinking Linda made the tough decision to get out of dairy and to invest in a horse boarding business. To make the transition, she dipped into her savings and built a new barn with a place for guests to stay along with several hoop houses for growing vegetables and medicinal herbs. She also sought out ways to diversify farm’s income, so with help from the PA DCNR she planted a multi-use riparian buffer with pawpaw, raspberries, and fruit trees. The buffer would both protect the stream from pollutants and produce fruits that could be turned into jams and preserves. She also got an EQUIP grant to turn several of the pastures into pollinator habitat with trails for her boarders to ride through and enjoy.

After maximizing income from the farm, she turned to the 37 acres of forest surrounding the farm. Linda’s cousin suggested that harvesting the forest to help fund the farm upgrades, but the forest had been high-graded several times and the standing trees had little economic value so harvesting was not an option. She began farming mushrooms and investigated forest carbon market opportunities. Since she needed income rapidly, she decided it would be faster and more straight forward to put in a bid at NCX. However, her bid of $22 a credit was too high. They rejected her bid, and she was not able to sell the additional carbon stored in her forest that year. Next, she considered the FFCP and found her forest qualified for “Growing Mature Forests” program. Linda was offered $200 an acre for a total of $7,400 over 20 years. It took her a month to find and hire a forester to write the required plan, but she was eventually able to join the program. The authors of this paper estimate that the net present value of the FFCP payments average about $1.30 per year for Linda’s property (3% discount rate). Linda believes that while the money from selling carbon is not as substantial, it does give her guaranteed income that can offset the costs of her other investments in the farm and help preserve the aesthetic values of the property which she and her boarders enjoy.

Lessons Learned

All three of these forest owners successfully sold carbon, but it took some work to find the program that was the best for them and to meet the requirements for the different programs. The largest obstacles these landowners faced was finding a qualified forester. This is due to both a lack of foresters in Pennsylvania and that few of them are certified to work with forest carbon programs, largely because carbon markets are a new industry. Joining a carbon program was easiest for Jannette, as she was already working with a forester, so if forest owner is thinking about selling carbon it would be best to already have a relationship with a forester. The owners interviewed all recognized that forest carbon does not generate a huge sum of money, but after considering their values and forest management objectives, they found that forest carbon payments supplemented their income in ways that helped them meet their own objectives and help contribute to climate change solutions. We conclude that while forest carbon markets are an exciting new opportunity, it is important that owners do their research and get advice from others (like legal and forest professionals), so they fully understand what they are joining. 

Follow-up

After this article was published, FFCP has updated their policy to allow foresters on their staff to write plans for landowners. This may reduce the barriers of entry to landowners and speed time to enrollment.