Forest Carbon Tax and Reward: Creating more jobs and carbon in the woods.

Deforestation, forest degradation, and unsustainable forest practices are major drivers of climate change. Deforestation and other land-use changes have released approximately 150 gigatons of carbon to the atmosphere since 1850, roughly one-fifth of the current atmospheric total. The contributions from forest degradation (i.e. converting real forests into tree plantations) and unsustainable practices (i.e. those that cause irreversible damage to soils) are on the rise. Globally, emissions from forest degradation have increased from 0.4 to 1.0 gigatons CO2 per year between 1990 and 2015. In Oregon, emissions from deforestation and industrial forest practices are not monitored by any state or federal agency but are likely the scond largest source of greenhouse gas pollution each year.

A swift transformation to sustainable forest practices that halt and reverse deforestation and forest degradation has the potential to capture and store much of the excess carbon that is now fueling climate change. For example, climate scientist James E. Hansen has calculated that we can pull 100 billion tons of carbon from the air through large scale restoration of areas denuded by logging and agricultural expansion. This has the potential to reduce CO2 concentrations by 30 parts per million by 2100, which can make all the difference as to whether humanity achieves the 2° C warming cap established by international agreements or blows past that critical threshold.

As it has done in the past on so many other issues, Oregon can lead the way. It can do so by passing globally replicable legislation implementing a forest carbon tax and reward program to penalize clearcutting, chemical sprays, short rotations and construction of logging roads and dramatically scale up climate smart forest practices that enhance carbon sequestration and storage capacity of its state and privately managed forestlands.

Here’s how it would work: Forestland owners who release more carbon through logging than is sequestered by natural forests on their properties would be levied a tax equivalent to the social cost of carbon – roughly $42 per ton of carbon dioxide emitted – on these net emissions. However, forestland owners would receive credits against the levy for a wide range of beneficial practices that bolster carbon storage including long rotations, selective harvesting and set-asides for streams, wildlife, non-timber forest products, recreation, and other beneficial uses. In addition, forestland owners that embrace these practices would be eligible for generous payments from a Forest Carbon Incentive Fund (FCIF) capitalized by the tax and managed by the Department of Forestry in consultation with the Oregon Global Warming Commission. Many forestland owners would make money on this deal – in particular, good actors who know how to produce timber while leaving a real forest behind.

The revenue impacts of the proposed legislation have yet to be calculated. But a reasonable estimate is that the net (after credits and deductions) tax would generate $50 per thousand board foot harvested – equivalent to $120 million per year at current rates of harvest on industrial forestlands. Oregon’s Department of Forestry and the Oregon Global Warming Commission would keep what they need to fill in their budget holes and administer the tax and reward program. The rest (about $100 million) gets dispersed to forestland owners who agree to implement climate smart, labor intensive practices needed to boost carbon storage and transform Oregon’s private forest landscape from a veritable wasteland of clearcuts and logging roads into a green carpet of healthy, functioning, and naturally evolving forests. If managed well, Pacific Northwest forests have the potential to capture and store more carbon per acre than any other forest type on the planet. A forest carbon tax and reward program would help fulfill this potential and by doing so, create thousands of new jobs.

A typical multiplier for money spent in the woods paying workers to restore timber plantations back to real forests and implement other climate smart practices is about 60 direct and induced jobs per million dollars invested. That’s 6,000 jobs per year associated with FCIF payments of about $100 million per year. Not a bad deal for skilled forest workers. And a welcome shot in the arm for distressed rural communities searching for ways to decouple from the booms and busts of industrial, high emissions logging cycles.

Time is running out on the climate time bomb. One of the great contributions Oregon can make on the global stage is to recruit its state and privately held forestlands into its climate agenda, help restore the world’s most effective carbon sink, and create thousands of jobs in doing so. The Oregon Legislature and Governor Brown would do well to provide such leadership by enacting forest carbon tax and reward legislation this year.

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