U.S. Endowment for Forestry and Communities Provides Support for Dovetail Partners and Cambium Consulting to Explore the Potential Effects of an Expanding Forest Carbon Market

U.S. Endowment for Forestry and Communities Provides Support for Dovetail Partners and Cambium Consulting to Explore the Potential Effects of an Expanding Forest Carbon Market

• Oct 10, 2023

Research, Survey, and Conveying of Stakeholders to Create Shared Understanding

(10 October 2023) Minneapolis, MN -  The U.S. Endowment for Forestry and Communities (Endowment) has provided a grant to Dovetail Partners to conduct a project in collaboration with Cambium Consulting over the next year with the goal of creating shared understanding around the potential effects of an expanding forest carbon market in the United States. The project has four distinct phases designed to raise awareness and encourage consideration and integration of approaches to maximize positive outcomes and minimize negative impacts. The project includes development of a concept paper, a survey of stakeholders and interested parties, development of mapping strategies, and a conveying workshop to be held in mid-2024.

“Forest carbon offset prices are now competitive with lower value traditional forest products such as pulp, and chip-n-saw logs in some markets,” says Pete Madden, President, U.S. Endowment for Forestry and Communities. “As offset prices continue to rise, it’s reasonable to anticipate price competition with forest products in the near future.”   

With the growing awareness of climate change impacts, brands and other corporate entities are increasingly recognizing the economic and reputational threats to their businesses and stakeholders.  Already, 38% of Fortune Global 500 companies have set a public net-zero target. Demand for carbon offsets has been expanding and financial investment strategies are beginning to acknowledge the value of carbon.  Over the past two years, millions of acres of commercial U.S. timberlands have been acquired by banks and joint ventures speculating on future carbon offset markets.  

“These investments in carbon capture and storage projects appear to be positive developments for combating climate change, as well as for  forest owners seeking alternative sources of income,” says  Kathryn Fernholz, President, Dovetail Partners.  “Expanding the area covered by forest carbon projects could also be good news for biodiversity and sustainable forest management - but  downstream from forests, the outlook may become less favorable.” 

As more forest owners commit to forest carbon projects, under the existing approaches less timber could be harvested, even on sustainably managed forests.  Reduced wood availability could lead to raw material shortages for local industries, which in turn can lead to mill closures, job losses, reduced tax revenue and decline in communities. Commercial volumes from carbon offset projects associated with tree planting may not include desired commercial species, develop quickly enough, be sufficient in scale, or be located in appropriate wood baskets to balance potential changes in supply.

“Existing forest carbon offset methodologies inadequately account for impacts to biodiversity and local communities - we can do more and better,” says Dave Bubser, Principal, Cambium Consulting. “And additional tools and innovation are needed to avoid or mitigate potentially harmful short and long-term effects arising from land use conflicts and to ensure carbon markets develop in ways that provide triple bottom-line benefits.“

Awareness of potential downstream impacts and a broader, shared understanding of cause and effect can help with strategies for future investment in an expanding forest carbon market.  This project aims to provide elevated awareness, shared knowledge, strengthened connections, and support for critical thinking among key stakeholders regarding the potential for expanding markets for forest carbon offsets that may materially disrupt raw material availability and supply to domestic forest products manufacturing sectors. The desired outcome is to provide space and momentum to spur research, increase understanding of potential downstream impacts, and initiate development of integrated, multi-dimensional strategies for optimizing benefits from natural climate solutions, and buffering or otherwise mitigating potential negative outcomes to communities.

For more information, to receive project updates, or to join the stakeholder and project contact list, please contact:  Katie Fernholz, Dovetail Partners, katie@dovetailinc.org, 612-333-0430 or visit: http://www.dovetailinc.org