Can Minnesota trees help control climate change?
Kent Scheer got his first check last summer for the red and white pines he planted on his land.
The Wadena landowner didn't cut them. He didn't even sell the trees. Scheer simply agreed to leave them standing so they can soak up carbon dioxide from the atmosphere.
Scheer became one of Minnesota's first forest landowners to cash in on photosynthesis, the process by which plants take in carbon dioxide from the air, store it and give off oxygen.
"I wanted to show people that this is real, it's happening now. And it's only going to get bigger," Scheer told the News Tribune.
"This isn't a get-rich-quick scheme. But when we have a [mandatory carbon cap and trade system] in place, this is going to be a way for people in rural communities to make a little extra money ... and help the world solve its biggest environmental problem."
So far, the cash Scheer gets is minimal. He planted trees on seven of his 60 acres to enroll in the effort, and his carbon broker sold only part of the total value for an annual check of $35, with carbon credits selling for about $2 per ton.
But that's because carbon credits in the U.S. are voluntary, traded through the Chicago Carbon Exchange or other fledgling markets. In Europe, where mandatory carbon dioxide caps are in place, credits trade for nearly $20 per ton. And experts say U.S. credits could hit $40 per ton when carbon caps are mandated -- a rate that would earn Scheer a check for about $700 yearly.
Even at the $20 rate, a Environmental Protection Agency analysis shows U.S. forests could store an extra 500 million tons of carbon, translating into a $10 billion market.
"Minnesota should be part of that," Scheer said.
That time may be soon. On Feb. 24, President Barack Obama proposed the nation's first ever carbon tax as part of his 2010 budget to Congress. In one scenario, carbon polluters would receive a cap on emissions that would be lowered yearly until carbon pollution is cut to the pre-1990 levels.
If they beat that cap, polluters may sell credits on an open market, much the way utilities now buy and sell credits for acid-rain-causing sulfur dioxide. If they exceed the cap, polluters must buy credits.
Last week, the Blandin Foundation, University of Minnesota and Society of American Foresters gathered experts from across the U.S. in Cloquet for a two-day conference to explain the science and economics behind carbon storage in forests.
The short answer is there's little money to be had under current prices. A study of Cass and Aitkin county forest lands found the counties would each gain only about $100,000 annually by selling carbon credits after reducing timber harvest and spurring more growth.
But it also found that the county forest land could store about two metric tons of carbon per acre, and when higher credit values hit, the proposition becomes very lucrative.
There is little debate that trees are very effective at storing carbon. Living trees pull carbon out of the air and even dead ones, even as lumber, can store carbon.
When they are cut and burned or begin to rot, however, the carbon goes back into the atmosphere.
Some experts say the wood from trees also should be considered for carbon credits, noting a wood house will continue to store carbon inside for decades. Moreover, producing homes and products from wood -- as opposed to concrete, steel or plastic -- uses far less fossil fuel and generally creates less pollution, said Jim Bowyer, a former University of Minnesota wood products expert who is now a principal in Dovetail Partners, a Minnesota-based non-profit aimed at promoting sustainable wood products markets.
Planting vs. managing
A serious carbon credit program probably won't be as simple as getting paid to leave trees standing. Instead, experts say, forest owners will be required to show how they are managing their forest differently to capture more carbon than would have otherwise occurred. They will be paid for the difference between doing nothing and making changes.
Experts in Cloquet last week said it's clear that any kind of carbon credits for forest storage will require verifiable action by landowners to make sure the carbon really is there and that it stays there.
So far, the cost of verifying how much carbon each plot of land can store has been more than the value of the credits. But when higher prices come, abuses are expected as unscrupulous landowners seek to cash-in.
"If we don't deal with it in a straightforward way, it's going to jeopardize having forests included in the global CO2 solution," said John Gunn of the Maryland-based Manomet center for Conservation Science.
Several efforts are under way to develop ways to verify how much carbon Minnesota forests can store and how to increase that storage.
John Rajala, whose family owns and manages 28,000 acres of forest in northern Minnesota, attended the Cloquet conference. He said he hopes carbon credits can help private landowners keep their land in forestry instead of bowing to high-prices paid by developers.
Like the conservation easements Rajala has sold on some land -- agreeing to keep the land undeveloped and open to the public -- carbon credits might offer a revenue source to help pay taxes and keep the land producing trees for the family's sawmill in Deer River.
"This is going to be real. It's coming sooner than we think and our family is trying to get ready for it," he said.
"We think we are a good fit because we already are managing for bigger trees" for lumber production, Rajala said. "But we also don't want this to be a tool to just promote more old growth... We think the best (carbon storage) will probably come for the best forest management, where we have the right mix of old and new that tries to mimic a natural forest.''
Farmers already are moving to enroll their idled rangeland or grasslands in carbon credit programs. National Farmers Union officials at the Cloquet conference said since 2006, their members have received more than $8.1 million for carbon credits -- payments that could balloon into serious cash under a mandatory system.
"It's extra income for farmers, a bonus ... It helps pay the property taxes,'' said Bruce Miller of the Minnesota Farmers Union. "Who would have thought 30 years ago that our members would be farming the wind or farming carbon?''
How a carbon credit program would work
- Mandatory government cap-and-trade system forces polluters to cut carbon emissions.
- If polluters can't reach limits fast enough, they may buy credits from other polluters that are below the cap -- or credits to store the excess carbon in trees or plants.
- Forest landowners are paid to plant or manage trees on their land that soak up carbon and store it for decades, event centuries.