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How Companies Can Benefit from the AFF’s Family Forest Carbon Program

The American Forest Foundation’s new program harnesses the collective potential of smaller US landowners to help them participate in carbon markets and carbon-credit schemes — not only benefiting them, but helping the companies that support them fuel the fight against climate change.

For more than 75 years, the American Forest Foundation (AFF) has helped family forest owners to promote forest stewardship and protect the nation’s forest heritage. Family-owned forests account for more than one-third of forest land in the United States, so — although each individual holding may be small — collectively, they make up an area the size of Texas and California, combined.

This means that, given the right support, they have enormous potential to help address the problem of climate change. And that’s where the Family Forest Carbon Program comes in. Developed by the AFF in conjunction with The Nature Conservancy, this new program uses their collective potential to remove some of the barriers that have in the past prevented smaller landowners from participating in carbon markets and carbon-credit schemes.

We caught up with Nathan Truitt, VP of Strategic Partnerships at AFF, to learn more about the program’s potential.

Many companies today are looking for ways to offset their carbon footprint. What is the role of carbon markets in this and how can family forests help companies accomplish these goals?

Nathan Truitt: Typically, companies are looking to pursue different ways to reduce emissions. Inevitably, there will be emissions that either can’t be reduced at all or can’t be reduced right now given current technology. So, companies that want to accelerate their positive impact on the climate are looking beyond buying carbon credits to offset those residual emissions. Based on research from the Nature Conservancy, it is apparent that companies are increasingly interested in natural climate solutions as a potential source of credits to offset those emissions.

And this is where the family forests fit in. In North America, about 38 percent of forests are owned by families and individuals. Collectively, they own approximately 280 million acres which is roughly the size of the states of Texas and California, combined — a huge amount of land. Although each individual family forest owner does not provide a large amount of climate mitigation; in aggregate, it quickly becomes a large source of climate mitigation — in the order of gigatons, if you can get 20 percent of them acting in concert with one another.

Family forests therefore can provide a huge source of credits for companies to reduce these residual emissions so they can achieve first, climate neutrality — but also net zero impact on the climate.

Why have family landowners historically been left out of carbon markets?

NT: This has to do with the transaction costs associated with the traditional approach to forest carbon accounting. Many forests are family-owned; and most are relatively small, with an average size of 16 to 70 acres. The vast majority of forest carbon projects have been developed on large properties, with 98 percent of projects on properties larger than 5,000 acres. Less than 1 percent have been on properties between 20- to 1000-acre properties, which is where the vast majority of these family ownerships lie.

In traditional forest carbon accounting, each participant has to do a full carbon inventory at the beginning of the project and at various points throughout to verify their carbon impact. The cost of this, which is a fixed cost, is very high. It is only viable if the cost is spread across 5,000 or 10,000 acres. But if you only have 100 acres, the cost of that inventory could be more than the revenue you would expect to earn from the project. This is a real barrier for family forest owners.

The other challenge is permanence, which is a crucial issue. We have to make sure that these carbon impacts are long-lasting, in order to adequately compensate for the carbon emitted into the atmosphere. The typical carbon contract is 100 years, plus a monitoring period beyond that. While this may work for institutional landowners like a company or trust; if you are a family landowner, you may not want to burden future generations with rules and restrictions imposed by the contract.

These two factors have tended to keep family landowners out of the carbon market. So, we have to design around them if we want to engage them in climate mitigation.

What has the AFF been doing to help landowners improve forest stewardship and maximize the sequestration of carbon?

NT: The aim of the Family Forest Carbon Program is to aggregate these family landowners and bring them together in the carbon market — not property by property, but on a landscape scale. We can then use that process to create verified emissions reductions, creating third-party-verified carbon credits that could be used by companies to make climate-mitigation claims.

For that to work, we need to remove the barriers of transactional costs and permanence. This can be done by approaching the accounting process in a different way. Rather than measuring carbon inventories — which is very complex — we measure the changes, because that change is what everyone cares about. We want to reduce emissions, which is easier and less expensive to measure across a landscape through a random sampling. This gives us much more direct measurements of the carbon impact of the practices that the landowners are implementing.

And although it doesn’t reduce transaction cost for the project, the cost is spread equally across a large number of landowners. Similarly, with permanence, we are not evaluating it at the property level. Any one landowner might come out of the project, but they would be replaced by other landowners, so that the carbon benefit itself is maintained over time and is in effect permanent.

These innovations designed along with The Nature Conservancy have been put into a new forest carbon methodology currently being reviewed by Verra under its verified carbon standards. This approach is relevant to family forests in the United States; but also to any areas where you have a large, disaggregated group of small land holders. We are piloting this approach in Pennsylvania in two counties; and next year, we will expand — first statewide in Pennsylvania, then throughout the central Appalachians region. We don’t want to expand too quickly, as we need to ensure that the program as designed meets the needs of the landowners and that it allows for highly credible carbon reporting and verification.

We believe that this methodology will help not only family forest owners in the US to access carbon markets but can potentially be applied globally.

What benefits does it offer to landowners who enroll?

NT: We compensate them — not for their carbon stock, but for the practices they implement on their property. We will give a landowner a payment to help them adopt a conservation practice that will generate carbon benefits over time. They will also receive maintenance payments through the life of the contract, which is usually between 10 and 30 years.

The cash flow this generates allows them to make the transition to more sustainable practices, and it allows us to be able to credibly account for that carbon without the need for property-by-property inventories.

To help promote the program, we are piloting a new tool for landowner engagement called WoodsCamp. It allows us to provide information to landowners about what kind of attributes their property has, so that they can find out quickly if they qualify for the carbon program.

What are the benefits of getting involved for companies? 

NT: There are a couple of ways that companies can get involved and gain benefits. First of all, there are companies, philanthropic organizations and government agencies for whom meaningful climate action is central to their ethos. These organizations tend not to be so concerned about what they get back from supporting the program.

The second way that companies can get involved is through the purchase of credits. There are two distinct pathways here: One is the purchase of credits that will be used by companies to potentially offset their emissions, which is the traditional use of carbon credits. This would only apply to companies who have already tried to reduce their emissions as much as possible and are wanting to offset the residual emissions. There are also companies for whom it would be too expensive or just not possible to reduce emissions right now — for example, airlines. They can use this as a way to help them reach their sustainability goals.

Other companies might want to get involved to support what is going on in their own locations, such as preserving wildlife habitat or supporting local rural communities. We can help them by working out how many credits they need over what time period, and help them to build a portfolio of credits that will match their needs.

Another path is for companies to create those same kind of credits through emission reductions within their own supply chains. Many companies either produce or rely on forest products, directly or indirectly. Companies may look at creating carbon credits within their own supply chain to protect it for the future, and make that supply chain more resilient and less prone to disruption in the longer term.

It’s important to keep in mind that this is a program that’s geared towards the next decade. So, we are not producing a ton of credits today or in the next couple of years. But we have the ability and the scale to generate significant credit volumes in the future.

For companies looking to get a more in-depth understanding of the Family Forest Carbon program, the AFF and The Nature Conservancy are hosting an introductory webinar on the program on April 30 at 1 pm ET.

What are some of the companies involved with the program thus far?

NT: We have several corporations who have shown their climate leadership by getting involved early on with the program. Most notably: Just this week, Amazon committed $7.3 million to support the launch of the program in Pennsylvania and expand the program in the Appalachians and other US regions. Other corporate partners include International Paper, 3M, Domtar and VF Corporation.

The early interest by companies in the program demonstrates the significant role family forests can play as a climate-mitigation solution. The Family Forest Carbon Program provides the bridge for these companies to be able to engage these owners in tangible actions that will have a true impact.