Industry Insight from Ethical Corporation Magazine, a part of Thomson Reuters.
December 19 - Toilet paper and biomass pellets are emblematic of the fight to save northern forests – and prevent some the planet’s more important biodiversity from going down the toilet (or up in smoke). While much of the focus on deforestation is on the world’s tropical forests, the degradation of boreal and temperate forests continues apace, threatening their ability to store carbon and destroying ecosystems.
As Climate Analytics noted in a recent report, opens new tab: ”Northern forests are critical in the race to net zero.” Alongside steep emissions cuts, its authors say protecting and restoring the forests is both essential to mitigating emissions and supporting forest ecosystem services and biodiversity.
Parties to the COP16 biodiversity talks are due to reconvene in Rome next February to try to agree how to mobilise funding for nature, after negotiations in Colombia were suspended. So far, Canada and Norway are the only countries in the Boreal region to submit an updated national biodiversity strategy and plan, as set out under the global biodiversity treaty signed in Montreal in 2022. Precisely what action on forests will follow in Canada is unclear, in a country that clearcuts one million acres, opens new tab of boreal forest each year.
Jennifer Skene, a policy director at the Natural Resources Defense Council who covers northern forests, notes that Sweden is on track to lose the rest of its old-growth forests before the end of the century, while those of Estonia and Finland are rapidly turning from carbon sinks into carbon sources.
She told journalists at a press conference in Cali that where positive policies have been developed, ”we’re actually seeing northern countries continuing to try to find workarounds and to define themselves out of accountability”.
She is, however, optimistic that there are signs of change. ”Some logging companies are moving to better practices that avoid degradation, and there are sourcing companies that are increasingly adopting standards that ensure that they are both avoiding deforestation and degradation in northern and southern forests and respecting indigenous rights.”
Some money is flowing too. In October the U.S. government announced $1.5 billion for more than 90 partnership projects on farm and forest lands. Some of these are to restore forests and watersheds in the south and eastern United States, where much of the old growth forest – one of the planet’s most valuable ecosystems – has been logged.
”There used to be old-growth in the eastern half the United States, trees that were as large (and) as wide as some of the sequoias and redwoods that we see on the west coast. But there’s only a few legacy trees that speak to what it used to be,” says Cakey Worthington, vice president of carbon operations at Aurora Sustainable Lands.
Aurora, which has focused on buying what was industrial timberland, is a joint venture between a group of equity investors and carbon credits developer Anew Climate. It now has 1.7 million acres across 14 states, under ”active management”, to increase diversity across different ages and species of trees. Trees are still logged – albeit on a smaller scale than previously, so there is net growth.
The focus is on sequestering carbon, while also protecting biodiversity and managing water resources. ”We can do active management practices that promote biodiversity at a really large scale, and take a mosaic approach,” adds Worthington.
That means maintaining a diversity of ecosystems and habitats across the landscapes. According to CEO Jamie Houston, a former forester himself, the forests contain over 130 different tree species and support more than 60 different species of mammals and 225 bird species. He adds that Aurora’s harvesting practices are designed to promote biodiversity, as well as carbon sequestration.
Worthington estimates the forests will be removing four to six million tonnes of carbon dioxide from the atmosphere every year for the next 100 years, and argues that the carbon sequestration potential is greater when forests are actively managed for some timber production than if they are just left to grow.
”The world needs wood products, and we’d rather have people buying wood products than plastic,” she adds. Indeed, researchers have tried to assess the mitigation potential , opens new tabof products made of wood, instead of using their fossil equivalents. For example, for every kilogram of wood used in construction that replaces a non-wood product emissions could be reduced by 1.3 kg CO2. For textiles, the emissions reduction could be greater – up to 2.8 kg CO2 per kg of wood product. Aurora earns credits for the portion of its harvest that goes into long-lived products.
Houston says 90% of the company’s income is now generated by selling carbon offsets. In August, for example, Aurora agreed a $100 million offset deal with TotalEnergies, while Anew Climate sold almost one million nature-based carbon removal credits to Microsoft, some of which will be derived from projects on Aurora’s land.
It is also taking decisions now to take account of what environmental conditions will be like in a few decades, drawing on science-based models developed by researchers.
”If we imagine that certain areas will become hotter and drier, maybe more water stressed, or potentially experience just a higher severity or frequency of natural disasters, we want to be developing a forest that will be resilient to those things” says Worthington.
”In Louisiana, we’ve got a few small stands that are 200-year-old cypress trees that are really well adapted to high, frequent water inundation. We might choose to preserve that area, but then do some selective forest management in neighbouring areas to help ensure there’s a bigger buffer around that type of forest.” In another area, more drought-tolerant species might be encouraged.
She adds that the carbon market is ”directly funding our ability to do this climate adaptation management and (to) focus on biodiversity on the ground. There’s a reason that the traditional timber model doesn’t focus on those characteristics, because they’re not being financially incentivised to do so.”
In the Canadian province of British Columbia, on the opposite side of the North American continent, there’s funding to protect and restore forests, but within a very different model.
Here it’s being driven by the original stewards of the land, the coastal First Nations peoples of British Columbia’s Great Bear rainforest and Haida Gwai, which contain the world’s largest remaining coastal temperate rainforests.
In the nineties, protests against logging and mining by environmental groups and First Nations peoples who wanted to make their own decisions about how their territories were used garnered international attention and, with it, put economic pressure on industry and government. Eventually the first conservation agreements were signed with governments. However, ”this wasn’t about establishing parks or conserved areas where nations wouldn’t have access. This was about ensuring that the stewardship of these territories went back to the nations through co-management with the province,” says Eddy Adra, chief executive of Coast Funds.
The focus has been on community well-being, as opposed to solely on the environment. Adra explains: ”A core concept was that the deforestation that was happening in their territories was impacting the rivers and the watersheds and the salmon that couldn’t come through, and the wildlife and the people who were also integral to that system. So removing the people from the equation, as is often done in environmental projects, ignores the fact that people are not only interdependent, but also part of that system.”
Canada’s innovative multi-partner Project Finance for Permanence (PFP) model provided the funding upfront in one go, rather than in a series of piecemeal grants. The two Coast Funds, each managing C$60 million, were set up in 2007. Funding came from national and provincial government as well as private donors.
Since then the First Nations have leveraged almost $300 million more for investment in projects such as renewables or eco-tourism, for stewardship and research, as well as creating new jobs and providing access to education and training.
Coast Funds has also identified new tools to fill funding gaps, such as payments for ecosystem services and salmon impact bonds.
The First Nations also sell carbon credits on the voluntary markets, using the British Columbia government’s forest carbon offset protocol. Annual verifications are regularly put out to public tender to try to capture the latest scientific thinking, explains Great Bear Carbon general manager Paul Kariya.
It also tries to sell to companies taking positive steps to reduce emissions, not just offset them. But Great Bear Carbon doesn’t sell removals, partly because these haven’t been scientifically quantified.
”What we do say to buyers who inquire about removals and are sceptical about offsets is (that) there is very much a human and social component to what we’re doing. These are First Nations, people who Canada and British Columbia have dealt very unfairly with, and part of the reconciling process is this negotiated agreement on the forest that has led to the offsets that leads to stewardship, and (job creation).”
Emitters in Canada pay a ratcheting carbon tax, but new legislation in BC means that from 2025 companies will be able to offset up to 30% of their carbon emissions (above a baseline), instead of paying the tax.
Kariya says the company helped ensure the offsets would be bought within the province. Negotiations on price are going on now, but emitters this year would be paying C$80 in carbon tax for every tonne of carbon they emit.
At COP15 in 2022 the Canadian Prime Minister, Justin Trudeau, announced $800 million for another four large-scale, long-term Indigenous-led conservation initiatives, using the PFP model.
One of these will establish a network of marine protected areas covering 30% of the waters that neighbour the rainforest, in the Great Bear Sea. It’s an initiative that the First Nations have been working on since 2006 and is expected to deliver an economic impact of around $750 million over the next 20 years.
Great Bear Carbon is now exploring a methodology for blue carbon credits. As kelp and seaweeds die and sink, carbon is stored on the seabed. A university team is researching that sequestration potential, with a view to establishing a protocol. At the same time First Nations people could potentially benefit from growing seaweeds for foods and supplements. Kariya is confident that within a couple of years or so, it could be offering blue carbon credits. However, there will have to be some thinking about how fishing is done, so the seabed remains undisturbed.
Coast Funds’ Adra says a great many lessons have been learned over the past 17 years, but overall that, ”they really need to be led by communities and developed and grown with the community lens. They’re the ones who are impacted on the ground, the ones who are doing the work, and they’re the ones who are going to be there 100 years from now.”
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