• Sue Neales, Rural reporter
• From: The Australian
• October 12, 2011 12:00AM

FOR Tasmanian grazier Roderic O’Connor, the debate raging in Canberra about a national carbon tax and emissions trading scheme seems a little irrelevant.

Not that Mr O’Connor is critical of attempts to redress the pressing global issue of climate change and global warming caused by harmful greenhouse gas emissions. Simply, he is already a step ahead of any national regulatory scheme administered by the federal government to penalise or price carbon pollution in Australia.

Two months ago, Mr O’Connor became one of only 14 farmers in Australia to be issued with verified carbon credits that can be sold on international markets. In the next few weeks, he expects to sell more than 30,000 carbon offset credits, or units, generated on his historic property, Connorville, to global companies looking to offset their greenhouse gas emissions.

Even more startlingly, the Cressy farmer has discovered he can earn as much by leaving native trees on his property standing and being paid for their carbon content, as he would by cutting them down.

At the current market rate of an average $15 for every carbon offset credit sold – equivalent to one tonne of emissions saved by not logging his forests and turning them into woodchips, paper or processed timber – it is a welcome cash injection of more than $400,000 annually.

“Do I now call myself a carbon farmer?” Mr O’Connor asks rhetorically. “Absolutely; and I’m very happy to do so.”

The switch from being a farmer of trees, sheep and irrigated crops to one with a large focus on carbon trading came over the past few years, as Mr O’Connor observed the changing viability of the Tasmanian timber industry and the emerging global carbon economy.

The seventh-generation landholder decided not to log any of the 3500ha of native forest on Connorville that had been slated to be gradually harvested over the next 50 years.

Instead, he called in specialist carbon assessment company Redd Forests to measure and assess how much carbon would be preserved – and then traded – in his tall eucalypt trees by deciding not to cut them down. The result surprised him, with the opportunity for earning as much annually from selling his protected trees over 25 years as if he had progressively cut them down.

“Too few Australians realise that you can already trade carbon and farmers like my family are now being paid to do so,” Mr O’Connor said yesterday.

“By registering my forests for carbon offsets, I’m getting the same income as if I had harvested the trees, but I’m also delivering outcomes for the environment and for my family’s farming future.”

Other Tasmanian landholders are choosing to follow the same path as Mr O’Connor.

Last month, Bothwell’s Peter Downie became the first farmer in Australia to bank hard cash for selling his registered carbon credits. He was paid more than $200,000 when he sold his first 15,000 carbon credits of the 70,000 units he has had assessed, registered and verified to a German property developer and a Japanese wool processor. Both were looking to neutralise their companies’ carbon footprints – the former for marketing reasons and the latter to meet Japanese regulatory requirements.

Mr Downie admits it has been a long process to go through the rigorous carbon measuring, assessment and verification scheme for the 10,000ha of native forests he has decided to preserve rather than to log, but he emphasises that his decision to become a carbon farmer was one made for economic reasons from “the head”, rather than driven by any environmental or “green” emotions.

Redd Forests managing director Stephen Dickey admits he is delighted to see the first cash flowing from the campaign to translate standing native forests in Tasmania into valuable carbon credits instead of toilet paper or plywood.

29 September 2011 | Washington, DC | Investors and buyers have funneled record amounts of capital into forestry projects that reduce greenhouse gas emissions by conserving forests and capturing carbon in trees, according to a global survey of carbon market participants published on Thursday by Forest Trends’ Ecosystem Marketplace.

The report, “State of the Forest Carbon Markets 2011: From Canopy to Currency,” documents a record $175 million flowing to support forest carbon projects in 2010, representing commitments to sequester enough carbon to offset nearly 30 million tons of carbon dioxide (CO₂) emissions.

“Contracts for forest carbon offsets more than doubled over the past two years, likely due to international policy discussions, and increased awareness of the critical role forests play in sequestering carbon,” says Katherine Hamilton, Ecosystem Marketplace’s Director and a report author.

Co-author David Diaz, also of Ecosystem Marketplace, agrees with the clear signs of progress, but sees a long road ahead.

“These markets have shown tremendous innovation and growth, but we are still a long way from channeling a sufficient amount of funding to reign in global forest loss as a critical source of greenhouse gas emissions,” he said.

This is Ecosystem Marketplace’s second State of the Forest Carbon Markets report, which is compiled annually and builds upon data from hundreds of projects and interviews with dozens of market participants to uncover and analyzes trends by project type, country, and regulatory environment.

“This excellent source of information on market transactions in the forest realm is a vital part of our long-term vision to support land-use projects to reduce greenhouse gas emissions and combat climate change in an environmentally and socially responsible manner,” says Ellysar Baroudy, who manages the World Bank’s BioCarbon Fund.  “The forest carbon market is gaining momentum and it’s important to step back once a year, take stock of the achievements to date as well as the challenges, and use this data to prepare for the future.”

The report shows a decline in the number of projects that plant trees, a steady increase in projects that promote improved forest management, and a surge in projects that save endangered rainforests (REDD – Reduced Emissions from Deforestation and forest Degradation).  Indeed, despite being the source of the earliest carbon offset transactions, REDD projects roared back from near obscurity just a few years ago to account for nearly 70% of the market activity last year.

The report also finds an influx of private-sector project developers, investors and intermediaries willing to market these credits – a clear transition from previous years, when conservation non-profits paved the way by developing most of these projects.

“The influx of private-sector investment is a positive indication that some of the major financial firms have a level of confidence – albeit backed by early-stage market risk – that forest carbon projects will play a significant role in the future of carbon markets and in reducing global GHG emissions,” says Steve Baczko, Director of Commercialization for ERA Ecosystem Restoration Associates Inc.

A strong demand for projects with other environmental and social benefits beyond carbon reductions is also now apparent, particularly through independent certification of each project’s carbon reductions and broader environmental and community benefits.  In 2010, the leading standard for demonstrating carbon reductions was the Verified Carbon Standard (VCS), which was applied to more than half of the credits projects planned to deliver.  Beyond carbon, additional certifications to the Climate, Community & Biodiversity (CCB) Standards found widespread appeal.

The hundreds of projects tracked in this report (many of which have public profiles on Ecosystem Marketplace’s Forest Carbon Portal, www.forestcarbonportal.com), come from a broad spectrum of project developers, governments, indigenous and community groups, and the private sector demonstrate that forests projects can and are meeting many of the demands for high-quality emissions reductions.  What remains to be seen is whether this work of this diverse sector will be meaningfully scaled up and incorporated into the efforts international negotiators and other policymakers are now designing for the bigger fight against climate change and to conserve the world’s forests.

The State of the Forest Carbon Markets 2011 is public and freely available thanks to support from the report’s Premium Sponsors – Wildlife  Works Carbon, ERA Ecosystem Restoration Associates Inc., and the World Bank BioCarbon Fund – and Sponsors – Ecotrust, Face the Future, Forest Carbon Group, Det Norske Veritas, and Baker & McKenzie.

Support for Ecosystem Marketplace comes from USAID, the Gordon and Betty Moore Foundation, the David and Lucile Packard Foundation, the Norwegian Agency for Development Cooperation, the United Nations Development Programme, the Global Environment Facility, and the John D. and Catherine T. MacArthur Foundation.  For a copy of the report, please visit www.ecosystemmarketplace.com/reports/forestcarbon2011

We have now contracted with 13 landowners to protect native forests on private land in Tasmania.  As of today we have over 36,000 hectares under contract and have issued some 170,000 VCS (and NCOS approved) offset credits.  If you are looking to be carbon neutral then these offsets can help you and you can watch the forests grow year after year! Check us out on the VCS website www.v-c-s.org

As of Aug. 11, the state of Texas had lost at least $5 billion worth of crops and cattle to the current drought that is choking the U.S. South.  That number has surely grown since, and is likely to continue growing across the entire region, hitting everything from peanuts and cotton to trees.

Those trees are especially troubling, because forests provide hundreds of thousands of jobs across the South.  They provide not only billions of dollars worth of timber and paper products every year, but also perform a dizzying array of “ecosystem services” that keep other industries alive.

In addition to filtering and purifying water, for example, forests curb erosion and naturally regulate the timing and amount of water flows, which helps lessen flooding during heavy rainstorms.

The World Resources Institute (WRI) recently published a series of six papers outlining the ecosystem services that southern forests deliver, as well as emerging programs that offer economic incentives for keeping those services flowing.

We’ve posted three of these on our web site, Ecosystem Marketplace.

The first, Beyond Timber: New Economic Opportunities for Southern US Forests, outlines the three basic ways that forests help keep water folowing:

• By naturally filtering water, forests can reduce drinking water treatment costs. For example, New York City famously saved billions of dollars in water filtration costs by conserving the forests and natural landscapes of the Catskills instead of paying for a new water filtration system.
• By curbing erosion, forests can keep sediment and excess nutrients out of waterways. For instance forest buffers near streams can prevent nitrogen from entering waterways at approximately one-third of the cost per pound of nitrogen relative to wastewater treatment plant upgrades.
• By filtering water through its porous soils, a forest can minimize wastewater treatment costs. For example, according to the Army Corps of Engineers a forest or forested wetland can filter water at approximately one-seventh of the cost per thousand gallons than can conventional wastewater treatment systems.

The second, the US South can Protect its Water by Paying to Protect its Forests, dives more deeply into the vital role that forests play in keeping water flowing.  This is critical, because two thirds of drinking water in the United States comes from rain that is filtered through forests, from where it flows to streams, lakes, and reservoirs.

Indeed, cities around the world have followed New York’s example and learned that it’s more economical to pay for the maintenance of forests than it is to invest in costly filtration equipment.  In the past few years, we’ve seen such payment mechanisms implemented in the US city of Denver and the Mexican city of  Zapalinamé, among others, and the Tanzanian capital, Dar es Salaam is moving in that direction as well.

Finally, last week, we posted What Woodland Owners Should Know About Forest Carbon Offsets In The US South, which outlines the risks and opportunities that southern forest owners face when looking to earn money from carbon markets by either planting or preserving trees.

by David Bowman

We have been fascinated and repelled by fire for millennia. It’s the defining feature of humanity and it has powered all cultures.

But our relationship with this fundamental element, whether wild or contained, is changing with our planet.

The intellectual gulf between fire and human life has been entrenched in urban environments because fire has become hidden.

Now it’s contained in machines such as coal-fired power stations and internal combustion engines, not – for the majority of us – out in the open.

So landscape fires are routinely represented in the media and popular culture as “disasters”, even though the vast majority don’t directly threaten human life or property, and are integral to the functioning of many ecosystems.

A brief history of flames

Fire is an ancient phenomenon that developed shortly after plants colonised the surface of the Earth more than 400 million years ago.

Indeed, human evolution is closely coupled with the mastery of fire that led to the development of cooking, and the capacity to transform landscapes. Humans have developed a remarkable diversity of uses of fire.

The intertwined relationships between humans, landscapes and fire throughout our history blur any distinction between “natural” and human-set fires in nearly every ecosystem on Earth.

But understanding the relative influences of climate, human ignition sources and cultural practices in particular environments is critical to design sustainable fire management to protect human health, property and ecosystems.

Four ways to burn

I have been leading a transdisciplinary research team at the National Centre for Ecological Analysis and Synthesis (NCEAS) at the University of Santa Barbara, California to understand fire in the Earth System.

We have just developed a framework to help researchers and managers think about the relationships humans have with fire.

We recognise four “fire phases”:

1. Natural fires that occur regardless of humans;

2. Tame fire used by hunter-gatherers to manage landscapes for game and wild food production

3. Agricultural fire used to clear land, grow food and burn fallow;

4. Industrial fire to power modern societies, which has switched from using living to fossilised plants as the primary fuel.

All these phases occur on Earth today.

Flammable planet

The roll-call of nations affected by fire is stunning: Greece, Israel, USA, Russia, China, Britain, Argentina, South Africa, Brazil and so on.

Indeed, disastrous fires have occurred on every vegetated continent.

The extreme 2009 Black Saturday bushfires in Victoria that followed record-breaking temperatures on the back of a prolonged drought were consistent with predictions of extreme bushfire conditions under global warming.

The excessive combustion of fossil fuels driving climate change may completely overwhelm human capacities to control fire.

This could lead to a dangerous feedback as more burning releases more carbon into the atmosphere, further driving climate change.

More frequent fires favour plants that are more tolerant of fire, which compounds the feedback cycle.

And humans have made this situation worse by liberally spreading highly productive and flammable plants (such as robust grasses and eucalypts) around the world. This may create a truly vicious fire cycle.

Winning any sort of “war” on wild fire would seem impossible, so industrialised civilisation must now relearn how to live with flammable landscapes.

Applied research can at best only guide and evaluate major interventions, such as the current plan to burn around 5% of Victorian public wildlands to reduce the intensity of fires.

Managing flammable landscapes is one of the big climate change adaptation challenges, equal to the challenge of sea level rise to the coastal environments.

In both cases there are a lot of people residing in very vulnerable settings. Adaptation will be costly and politically painful.

One of the few recommendations of the Victorian Bushfire Royal Commission that was not accepted was the government buyback of properties at high risk of fire.

There can be no doubt our future will be shaped by fire, just as our past has been.

That is the fate of the sole “fire creature” who lives on a flammable planet.

It’s just as the myth of Prometheus foretold.

David Bowman is Professor of Environmental Change Biology at the University of Tasmania

This article was originally published on The Conversation – theconversation.edu.au.

Forests could increasingly act as a backbone of sustainable economies. Companies that recognise this can advance their own bottom line, and help ensure that forests thrive

Forests can provide a multitude of renewable goods and services and forward thinking companies will realise this opportunity. Photograph: Duncan Willetts / Allstar/Sportsphoto Ltd. / Allstar

Over the past 150 years, industrialisation has taken its toll. All too often, forests have been sacrificed in the face of expanding business and national interests. In the future, forests could act as a backbone of sustainable economies by providing a multitude of renewable goods and services. The successful forest companies of the future will recognise this opportunity, use it to advance their own bottom line, and help ensure that forests survive and thrive.

Climate change, population growth, and soaring demand for food, energy, water and other resources are changing the way the world sees and values forests. A vision is emerging of a new kind of company – the forest services company.

Our vision is being propelled by new markets that are emerging for forest services such as carbon storage, wildlife preservation, recreational facilities and watershed protection. This trend is creating huge business opportunities for forest companies with the foresight to reinvent themselves and look beyond the traditional equation of forests equal timber.

Forest companies of the future will expand their business model beyond delivering products to providing an array of crucial services to communities. Timber revenue will still be important, but successful companies will have supplemented their income from the fast-growing new markets that emerge from the increasing scarcity of ecosystem services.

Forces of change

Why should forest management companies diverge from a seemingly successful business strategy to follow the services route? For the reason CEOs like best – it makes good business sense. Multiple global forces are converging in a perfect storm, creating a new operating context.

Climate Change: Trees not only capture and store carbon, they also produce fossil fuel substitutes (such as biomass) and provide flood control and water regulation services, helping reduce the impacts of climate change. The transition to a new era in forestry will be underpinned by the climate change imperative.

Rising demand for renewable energy and materials: Limited supply and rising prices of fossil fuels, concerns about energy security and climate change are reviving demand for renewable wood-based energy and materials. The European Union, for one, has pledged to boost biomass energy consumption, stimulating the market.

Restoring nature’s fraying services: Many of the services provided by forests have been degraded, including water purification, erosion control and flood control. This can create serious problems downstream as ports and hydro-dam reservoirs become silted up, fresh water supplies become degraded, and flash floods become more frequent. In response, there is a growing need to increase funding for restoring ecosystem services and the public benefits they provide.

Increasingly urban population eager to enjoy nature: With most of the world’s population now living in cities, forests fulfil a growing demand for recreational, educational and spiritual escape. At the same time, city planners are increasingly interested in the role urban forests can play in reducing water run-off, improving air quality, curbing noise pollution and providing green space.

At your service: new roles for forest companies

In order to meet these growing demands, forests companies must be able to shift from a narrow commodity focus (trees for timber and paper) to a multiple ecosystem service strategy.

Sveaskog, Sweden’s largest forest company, is doing exactly that. Approximately 15% of annual net sales comes from biomass for energy and non-timber services such as windfarm leases and hunting and fishing licences. In addition, Sveaskog is managing one-fifth of its land for conservation and promotion of biodiversity. The company is also experimenting with ways to maximise carbon uptake through different forest management measures and plans to sell the additional uptake to carbon markets. In 20 years, Sveaskog expects its current sales share of 15% from biomass and different kinds of non-timber services to have doubled.

Other major companies are similarly shifting focus to incorporate services. Plum Creek, the largest US private landowner, has about a third of the company’s 7m acres of timber lands under revenue-generating conservation and wildlife protection agreements. Mondi, a leading international paper and packaging group, recently identified opportunities to tap into growing markets for biomass and ecotourism through a review of ecosystem services at three of its South African plantations.

The shifting nature of forest companies is a win-win opportunity for governments as well, creating new jobs in struggling rural areas and improving the quality of life for urbanites.

But three interconnected conditions are needed to transform the forest sector as a whole. First, sceptics in the industry need to see more first-movers, who can point to positive balance sheets from non-timber services. Second, the industry needs clear signals from governments that they recognise the role of forests in combating climate change. Third, to truly transform the industry, more countries will need to adopt policies that value ecosystem services and put a price on carbon to mitigate climate change. Sweden, for example, introduced a carbon tax that transformed the country’s energy sector, boosting biomass.

We are betting that these three conditions will be met over the next decade, setting the stage for a transformation of the global forestry industry.

Göran Persson is chairman of Sveaskog and a former prime minister of Sweden. Janet Ranganathan is vice president of science and research at the World Resources Institute.

Australian companies and individuals wishing to become carbon neutral (or just offset some of their emissions) under the Australian Government’s National Carbon Offset Scheme (NCOS) can now buy and use Redd Forests Tasmanian forestry offsets (see the projects page on this site). Indeed ours are the only Australian based projects compliant with NCOS.