The climate crisis is forcing society to rethink existing technological and ecological systems. At the nexus of this challenge is how the U.S. values and manages forests.
Over the past 16 years, start-up carbon credit companies have been buying up hundreds of thousands of acres of American forestland—in total, more than half of which is family or corporately owned—to capture and store CO2. The companies then sell credits to corporate customers that are voluntarily working to offset their emissions. One credit is equal to about a ton of stored CO2.
Like many climate-related industries, forest carbon companies describe themselves as part of the toolbox of solutions necessary for humankind to avoid catastrophic climate change. So far, carbon storage policies or programs are underway in at least half of U.S. states, including Oregon, Michigan, New Hampshire, West Virginia, Kentucky, Tennessee, and Florida, with more in development. In 2021 the industry was worth $2 billion; by 2030 it’s projected to balloon up to $35 billion, and by 2050 to at least $250 billion as corporations and governments attempt to meet greenhouse gas reduction milestones, according to a January report by the finance company MSCI.
The carbon credit industry isn’t the only one to value the nation’s forests at billions of dollars. Competing for the trees is the more than 400-year-old timber industry that began with the Jamestown Colony, and which generates annual total revenues of around $288 billion. More than an economic boon for the country’s traditionally low-income regions, such as Appalachia and the southeastern U.S., the industry has intertwined itself with the nation’s history, too: it helped prop up an economically stunted South after the Civil War and employed Americans in the nation’s rise out of the Great Depression.
Can these two industries, dependent on the same forests, coexist?
“There’s a lot of value in these [voluntary carbon] markets,” says Matthew Russell, a forest analytics consultant with Arbor Custom Analytics who’s worked with both carbon credit start-ups and the timber industry. But, he admits, domestic timber companies continually struggle due to fluctuating global and domestic markets. And as carbon credit markets remain murky, with questions around the effectiveness in actually storing CO2, “there’s a lot of uncertainty.”
What are carbon credits?
About one-third of the U.S. is forestland, estimates the U.S. Forest Service. Existing forests offset 16% (some 866 million metric tons) of the country’s annual carbon emissions. For this reason, proponents of forest carbon credit programs say it’s one of the most cost-effective and obtainable environmental fixes in the short-term. Plus, programs create new revenue streams for communities and landowners, and they boost ecosystems by improving water quality, reducing soil erosion, and preserving habitat.
Credits are measured by each ton of CO2 a forest stores through trees harboring the compound in their branches, trunk, roots, and the soil around them. “Natural climate solutions,” like forests, could provide one-third of global CO2 reduction needed by 2030 to avoid average temperatures rising by 2°C, according to a 2017 Proceedings of the National Academy of the Sciences study.
Mature trees store up to 48 lbs of CO2 each year; by comparison, a year’s worth of Americans’ average 42-mile car commute to work creates roughly the same level of CO2 emissions in that time, according to data published by the technology company Replica. And while the amount of carbon emissions a tree captures and stores varies by species, a forest’s age (young trees absorb more CO2 than mature), how long the tree lives, and underbrush density, an acre of forest stores up to 33 metric tons of CO2 annually, or about the amount of CO2 a fossil fuel-powered car emits for every 5,000 miles traveled.
But the world can’t rely on forests alone. The U.S. emitted nearly 5 billion metric tons of CO2 in 2021. Seventy-four million acres of forestland would be needed to sequester that amount of carbon—more than twice the size of Florida—according to an MIT Climate Portal study published last year.
Will carbon credits create more forestland?
In 2016, former Forest Service Chief Tom Tidwell stood before the World Conservation Congress in Honolulu to deliver remarks on how the nation will soon threaten its own forests.
Driving this threat would be a rising need for materials to accommodate the growing U.S. population which is expected to grow from 340 million people today to more than 400 million by 2060. This will require developing up to 37 million acres of land—about the size of Illinois. For the first time, the U.S. was facing the threat of net forest loss, Tidwell said.
Up to 10% of global carbon emissions come from forest loss. Carbon programs claim to preserve forests for longer—operating on as long as 40-year growth cycles—than the timber industry, which has an average 27-year harvest cycle. So, can carbon credits help make up for, or surpass, the number of trees felled for America’s building boom?
“Probably not,” says Timothy D. Searchinger, a senior research scholar at Princeton University’s Center for Policy Research on Energy and Environment. Essentially, there’s no indication the demand for wood or its consumption will decrease. “The only way this kind of an offset would help the climate is either because it reduced wood consumption, or because somehow or other it transferred the consumption toward another source of supply that’s better for the climate. Both of these things are possible, but there’s nothing in the structure of these offsets that make sure that that’s happening.”
Most voluntary carbon storage projects concentrate on reforestation, or the restoration of forestland. But through afforestation, or adding trees to land that previously lacked forest cover, companies like New York-based s Chestnut Carbon intend to plant some 17 million trees on the 500,000 acres of southeast U.S. land the start-up has acquired in recent years. And while no data exists on Americans’ openness to CO2 markets relying on afforestation, the company Arbonics’ survey of Irish, French, Lithuanian, Swedish, Austrian, and Polish landowners found that 80% would “consider afforestation on their land to earn additional income” from CO2 credits.” Given that financial incentives drove surveyed landowners’ thinking, Americans might agree to it, too.
Can carbon programs and forestry economies coexist?
Some experts worry that forest carbon programs will someday threaten U.S. wood supply, with the percentage of forests available for timber shrinking while the amount preserved as a climate mitigation tool increases. The U.S. is already a net importer of timber, and with potentially less historically harvested forestland available, the nation’s ratio of imported wood would increase over domestic products.
And as the volume of harvested timber shrinks regionally, so do local economies in rural localities dependent on the industry. It’s a struggle that timber regions have become acquainted with since the 2008 recession and then the pandemic forced waves of mill closures nationwide.
Meanwhile, New York-based Aurora Sustainable Lands has acquired 1.7 million acres across at least 14 states since 2022. The company describes itself as the “largest private forestland owner focused entirely on climate mitigation.” Aurora has said that 80% of its annual revenue is made selling carbon credits; the rest, from harvesting and selling timber on an extended cycle. The company claims it sold $100 million in carbon credits in 2023; eventually, Aurora expects its holdings to generate offsets yielding up to $150 million annually. Similarly, Chestnut Carbon self-imposed a 2030 deadline to acquire and reforest 500,000 acres of natural land for its program.
Aurora Sustainable Lands and Chestnut Carbon did not return TIME’s requests for comment.
Global forests are currently valued at a combined $150 trillion—more than the world’s stock markets—which makes forests one of the planet’s most valuable assets. Forest carbon program proponents might say that evaluation only scratches the potential surface. A 2020 analysis by the Boston Consulting Group found that, if combined with sustainable timber harvesting practices, nature-based projects can someday increase forests’ 30-year net value by as much as 50%.
Analysts, like Russell, foresee “room for both” industries. “The world is wide enough for timber industry and natural capital markets to coexist,” he says. He predicts that “smart” timber companies will eventually invest in carbon storage markets. U.S. timber companies will always focus on timber products, Russell says. But “the ones that are going to be really successful can just add on carbon revenue as another line item that’s a part of their revenue sheets.”
