Forest owners stand to win big in climate bill

/ Source: The Associated Press

For years, landowners have gotten paid for not farming. Now they may get paid for not cutting down trees.

While U.S. families could see their annual energy bills rise hundreds of dollars under a massive climate bill that President Barack Obama and congressional Democrats are trying to push through the House, owners of large swaths of forestland — timber companies, large farms, even foreign countries — could reap billions of dollars.

The bill is aimed at curbing the gases, largely carbon dioxide from power plants and vehicles, blamed for global warming.

But it would allow polluters to buy credits from owners of forestland as an alternative to switching to fuels other than coal and gas or installing expensive equipment to capture the greenhouse gases. The land owners would get the credits because trees suck up greenhouse gases, preventing them from reaching the atmosphere and acting like a blanket to warm the Earth.

The premise is that at some point, the sources of greenhouse gases will find it cheaper to switch to other fuels or install pollution controls than to keep paying for the credits.

"In effect, the public is going to pay polluters to plant trees," says Frank O'Donnell of the advocacy group Clean Air Watch. "Does that really lead to a major improvement in global warming? I don't know and I'm not sure anybody knows."

Calculating carbon
Here's how it works, hypothetically.

Say an acre of forestland sucks up two additional metric tons of carbon after a landowner plants more trees on his land or promises to rotate the way he cuts them down so more are standing at once. If the pollution market created by the legislation is currently trading at $20 a ton, then the landowner could stand to make $40 per acre if he qualifies for the program — a potentially good investment for owners of thousands of acres of forest, such as timber companies or large corporate farms.

The legislation would also extend to international forests, promising to pay some countries that agree to slow their harvesting of trees abroad.

The Agriculture Department, which includes the U.S. Forest Service, will oversee the domestic program and develop regulations for verifying whether a forest owner's particular tract of land is actually capturing carbon. Farm state lawmakers had threatened to vote against the bill if the Environmental Protection Agency was given that authority.

Rep. Collin Peterson, the Minnesota Democrat who led the fight to include the offsets for forests and other agricultural programs, said many farmers don't trust the EPA.

The program is not unlike another set of payments that many farmers have been receiving for years — conservation subsidies that pay farmers not to plant on environmentally sensitive land.

Farmers and foresters are also exempt from the bill's greenhouse gas emission reduction requirements under the bill.

Some criticize incentives
Critics say the program is ripe for abuse and that landowners could reap new rewards for things they're already doing.

Much of the concern revolves around how the Agriculture Department can accurately measure how much carbon is sucked up by a particular tract of trees and the government's ability to enforce penalties against those who collect money for the credits and don't produce results.

"The Agriculture Department has a long track record of siding with its constituent groups against the EPA and environmental protection," said O'Donnell, of Clean Air Watch. "Giving it such a huge role in this emission reduction process could threaten the integrity of the program."

Another concern is weather and disease, which can destroy a forest in a short period of time. The legislation takes into account these "unintentional reversals" in carbon absorption, and a landowner may not have to pay back all of the funds he collected if the devastation wasn't his fault.

Kate Horner, a policy analyst for the environmental advocacy group Friends of the Earth, says the international aspect is particularly troubling. It will not be easy for the United States to monitor what is going on in other countries, she says, or to know if the offsets will actually reduce carbon emissions or help save forests.

"What these forest offsets will do is to pay forest destroyers for doing something in a slightly less bad fashion," she says.

Dave Tenny, the president and CEO of the National Alliance of Forest Owners, says the program could help those in the forest industry who have suffered from a slowdown in homebuilding over recent years.

"If someone is able to benefit from that economically, the fundamental question is, 'Is that bad?'" said Tenny, who lobbied for the language.