Sustainable Forest Management
And Ecosystem Services In the
Private Sector
Matthew Smith,
Smith ACF,
ACF CF
Director of Ecosystem Services
FORECON EcoMarket Solutions LLC.
FORECON – An Overview
• Privatelyy owned multidisciplinary
p
y forestry
y & natural
resource services company in business since 1954
• Customer-focused and technology driven
• Spectrum of Clientele
• Investors
• Industrial and nonnon
industrial clientele
• Tribal Lands
• NGOs
• Government
• 7 strategic locations in NY, PA, and WV with nearly 50
employees
Forecon EcoMarket
S l ti
Solutions
LLC.
LLC
•Forest Carbon Offset Project
D
Development,
l
t Implementation,
I l
t ti
and
d
Marketing
•Forest
Forest Carbon Policy Analysis
and Development
•Forest Carbon Accounting and
Modeling Services
•Carbon
Carbon Offset Project Analysis
and Review Studies
•Carbon Credit Sales and
Marketing.
•www.foreconecomarketsolutionsllc.com
Landowner Classification
Fully
Sustainable
Exploitive
What is Sustainability?
How does the consideration of
sustainability and sustainable
practices influence traditional
forest management for private
landowners?
Answer: It forces
landowners and managers
to consider non extractive
forest values with
increased rigor.
T diti
Traditionally
ll this
thi shift
hift
represents a cost to the
landowner beyond previous
l
levels.
l
What Influences Private
L d
Landowners?
?
•
•
•
•
•
•
•
•
Costs of owning resources
Objectives
Regulation
Social Pressures
Incentives
Income
Personal Situations
Others…
In the end landowners will manage for what they
value the most…..at that point in time!
Values From Private Forest Lands
Primary Traditional
• Timber…Timber…Timber!
•
•
•
•
•
Sub surface (Oil Gas Mineral)
Agriculture
Fuel
Ancillary products…Maple Syrup,
Christmas trees, ginseng,
mushrooms…
Personal Recreation
Ecosystem
y
Services
• Public recreation
• Cultural
• Water Quality
• Water Quantity
• Air / Carbon
• Biodiversity
• Esthetics
• Habitat
• Nutrient Cycling
• Soil Formation
• Genetic Library
• Others…?
The challenge for the next generation
of forestry and land use professionals
is…how do we maximize or maintain
the host of values for a property…
how do we layer these values to create
the optimal solution for the
landowner?
Enter….Eco Markets!
Enter….Eco-Markets!
•
•
•
•
Ecosystem Services are limited in supply.
S
Some
actions
ti
compromise
i th
these values.
l
Infringement on these values has a cost.
These services are only available if the
forests exist.
• Caps on the ability to impact these services
in a negative way creates demand.
An Integrated Approach for Both
N
New
and
d Old Values
V l
• Diversifies the returns from the property
p p y
• Encourages the use of sustainable
practices…reward! Helps finance conservation
practices.
i
• Alleviates financial pressures through regular
additional income streams
• Increases or maintains non timber benefits
• Compliments returns from
traditional markets…
What is the Carbon Income
Potential for Forests?
• Most US forests can sequester
q
between 1 and 4 MtCO2e p
per
acre per year (net) in silvical carbon.
• Carbon is worth $0.10/Mt CCX, $3-$7.00/Mt
$3 $7.00/Mt VCS, and $5$5
$10.00 CAR. So, we’re looking at $0.10 to $40.00 per acre
per year in gross revenue from carbon sales.
• The projected net revenue from carbon sales can be $0 to
$20.00 per acre per year depending on the program chosen
project
j
dynamics.
y
and other p
• Carbon, at the current pricing becomes a complimentary
income stream for eligible forests. Eligibility is becoming highly
situation dependent under the leading carbon program rules.
Value Drivers…Offset Quality!
• Additionality…what
y
would have happened
pp
without the project…financial, regulatory, BAU,
proportional, base year….?
• Leakage…Unintended
L k
U i
d d carbon
b emission
i i
consequences…internal or external, market or
activity driven?
• Permanence…duration of storage…perpetuity,
100 yrs, 50 yrs, other?
• Ancillary Benefits…”green qualities”, social
benefits, political value, others…
Current Offset Opportunities
• Chicago Climate Exchange?! (pooled or stand
alone)
• Direct Sales
– The Voluntary Carbon Standard…others?
– The Climate Action Registry
– Other local transactions…energy companies,
industry, etc…
Future Opportunities….?
• The Regional Greenhouse Gas Initiative
• Federal Program?
Where Is This Going?
• Coalescence of programs and
standards.
• Uncertainty influencing all
programs and voluntary
markets…REDD
k
REDD in
i the
h US?!
• Volatility in early markets.
• Centralization
C t li ti off carbon
b
regulation and trading in Federal
program.
• Affect of the global economic
crisis and health care debate.
• The future for forest offset
projects?
WCI
RGGI
•Favors State sponsored or developed voluntary programs
•Favors projects in place since 2009
•Favors longer
g term commitments
•Guarantees recognition of nothing….but leans in a distinct
direction…!
•California is very busy in this…Boxer, Waxman, others
Questions?
Matthew Smith CF, ACF, EMS-A
Director of Ecosystem Services
FORECON Ecomarket Solutions,
LLC
Contact our Carbon Team
(716) 664-5602
msmith@foreconinc.com
jpomp@foreconinc.com
bcarlson@foreconinc.com
Find More Info. @
www.foreconinc.com
www.foreconecomarketsolutionsllc.com