Carbon cap-and-trade ended with a whimper in Richmond this past spring when Republican budget additions blocked the state from participating in the Regional Greenhouse Gas Initiative and Gov. Ralph Northam declined to issue a veto.
But in southwestern Virginia, it’s business as usual.
In the Appalachian Mountains that surround the Clinch River Valley, vast forests are quietly capturing carbon that is quantified for sale in California’s cap-and-trade market. Then, depending on the forest’s ownership, profits are plowed back into conservation efforts at home or, until recently, paid out to investors.
“We’re cashing checks, and it’s making a difference,” said Greg Meade, the conservation forestry program manager for The Nature Conservancy’s Clinch Valley Program in Abingdon, which oversees six forest carbon projects covering almost 145,000 acres in Virginia. “This is real. It’s working. The sky isn’t falling.”
Today, with the public increasingly concerned about global warming, carbon capture has become a popular way of combating the influx of greenhouse gases into the atmosphere.
The idea is straightforward: Because the atmosphere has little respect for jurisdictional boundaries, gains in one place will to some degree affect everyone by decreasing the world’s overall emissions burden. Emitters who can’t (or won’t) reduce their emissions further can make investments to decrease emissions elsewhere, “offsetting” some of their own impact.
One of the most effective sources of those offsets are forests. Trees have a unique ability to absorb and hold on to carbon, a characteristic that has earned them the nickname of “carbon sinks.” According to the U.S. National Climate Assessment in 2014, U.S. forests and wood products like lumber and pulpwood on average store 16 percent of all carbon dioxide emitted in the U.S. by the burning of fossil fuels, capturing and retaining an estimated 227 million tons of carbon every year.
That has created a growing market that relies not on the extraction of forest materials, but on their preservation. Nationwide, corporations like Disney and Delta have eagerly flocked to forest offsets as a way to achieve emissions-reduction goals or improve their public image.
But the most significant arena of the forest carbon market remains California. In 2013, the state established a cap-and-trade system to reduce greenhouse gas emissions that allowed emitters that exceeded their emissions cap to purchase offsets derived from the carbon captured and stored by forests — a characteristic still unique among U.S. cap-and-trade systems today.
“Our society is acknowledging and recognizing that there are climate benefits to our forests and [they] are willing to pay for it,” said Kaarsten Turner, senior vice president of ecological services for investment firm The Forestland Group, which specializes in investments in timberland management projects. Until this July, when the Forestland Group transferred more than 150,000 Virginia acres to the Cumberland Forest Project, which is managed by the Nature Conservancy, the firm oversaw three forest carbon projects in Southwest Virginia. (The sale, said Turner, was due to the funds the projects were linked to reaching maturity.)
“Those markets are real,” she said. “They’re happening, and people are paying us for it. It’s not artificially created.”
Forest carbon offsets sold by states in the California market, 2013-18
|State||All forest offsets issued by end of 2018 (metric tons carbon dioxide)|
Not everyone is as optimistic about the California forest carbon market’s potential: a recent policy brief from the University of California at Berkeley’s Center for Environmental Public Policy found that emissions reductions from these projects may have been overstated by 80 million tons of carbon.
Undoubtedly, however, the demand for offsets has incentivized the management of more and more forested acreage to maximize its ability to store carbon.
In southwestern Virginia, which Nature Conservancy Central Appalachian forest manager D. Stuart Hale called the “stronghold” of forest carbon capture, conservationists see the income that can be derived from carbon offsets as another way to diversify the region’s historically mining-dependent economy — although the extensive documentation and technical data required by California’s regulatory market often means that only the largest landowners participate.
“As yet, the economics haven’t worked out for small landowners,” said Hale.
Also, the common practice of severing mineral rights from land rights “makes Appalachia a really risky place to do carbon projects,” said Turner. In the middle of Virginia’s metallurgical coal boom in 2017-18, one coal operator who owned the rights to mine on Forestland Group acreage ended up disturbing 863 acres. While the firm was able to uphold its commitments in the California market, its tracts ultimately generated fewer carbon credits during that cycle, and consequently less income.
Still, Turner called the Highland tract that the Forestland Group transferred to the Nature Conservancy this July “a poetic piece of conservation.”
“I don’t know if there’s a whole lot of other properties that have stayed intact,” she said. “I don’t think that could have happened, honestly, without carbon.”
CORRECTION: This story was updated to reflect that the Forestland Group’s transfer of 150,000 acres was to the Cumberland Forest Project managed by the Nature Conservancy, not the Nature Conservancy itself. The Nature Conservancy does not own the land.