4.12.2019 – Carbon Market Opportunities for Vermont
Many of us have been longing to see signs of Spring but it seems that every time we catch a glimpse, we get an inch or two of cold wet snow and ice and take three steps back. Tulips that grow on the east side of the State House have managed to gain a foothold and might manage to bloom in the near future, which would give us all hope that it will eventually warm up. As I left Montpelier on Friday, the State House lawn was brown and soggy, but my guess is the skating rink will be dismantled (I wonder how many State Houses have skating rinks in the front yard!) by the time we get back on Tuesday and in no time the grass will be greening up.
One of the very edifying aspects of serving in the Legislature is the opportunity we have to learn about new topics. This week we continued to take testimony on S.160, which is a bill related to agricultural economic development. There are many sections in the bill, one of which involves “Vermont Forests in Carbon Markets”. As we considered the bill this week, we were fortunate to have several witnesses with a wealth of knowledge on the subject.
The bill tasks the Department of Forests, Parks, and Recreation with establishing the Green Mountain State Forest Carbon Program. The goal would be “to support and promote the entrance by owners of tracts of Vermont forestlands into international, national, and regional carbon markets”. The bill calls for the Department to “contract with an entity to implement the program and provide services to owners of forestland that will facilitate the entrance of the forested land into a carbon market”.
What is a carbon market? The bill’s definition states that it is “a voluntary or compliance market place that trades carbon allowances representing the reduction, avoidance, or sequestration of carbon measured using tons of carbon dioxide equivalent”. What it means to the owners of forested land is that they could potentially be rewarded for the carbon that their trees sequester.
One of our highly qualified witnesses was Robert Turner from Bristol, Vermont, who has been a consulting forester since 1989 and a forest carbon project verifier since 2011. Robert also served on Governor Scott’s Climate Action Commission from 2017 until 2018. He has conducted forest carbon project verifications nationwide and was the lead verifier on the first, and largest, project verified under the California Cap and Trade protocols.
To quote from Mr. Turner’s testimony, “Cap and trade markets exist in a regulatory framework, and the credits developed are often referred to as compliance credits. The Regional Greenhouse Gas Initiative is another example of a cap-and-trade mechanism that covers utility emissions in 9 northeastern states. Most developed countries have established emission trading systems (ETS) under a cap and trade framework. In contrast to a compliance market, credits are also developed and traded under a voluntary system. In this market, companies (and individuals) choose to purchase credits in order to offset a portion of their emissions. Offsets in the voluntary market are generated from a wider variety of types, including forest offsets.”
Not only could this be an opportunity for private forest landowners, but in my view, state forest land could provide a revenue source for state coffers.
Robert gave us the example of a 65-foot tall, 20-inch maple containing approximately half a ton of carbon. Additional carbon, due to growth, is also credited minus timber that is harvested. This would allow forestland that is in the Use Value Appraisal, or Current Use, Program to continue to meet the requirements of the forest management plans and still participate. Because the carbon forest program works better on larger tracts of land, there may be opportunities for landowners to aggregate their smaller parcels to form a group that is able to participate.
For Robert Turner’s complete testimony, please go to our website at the following link: https://legislature.vermont.gov/Documents/2020/WorkGroups/House%20Agriculture/Bills/S.160%20rural%20economic%20development/Witness%20Testimony /S.160~Robert%20Turner~Testimony~4-11-2019.pdf.
Representatives of the Nature Conservancy also testified and brought us an example of a project already in place in Vermont. Jim Shallow told us about the Burnt Mountain Project, which is the largest carbon project in the state, consisting of 5,400 acres in the towns of Belvedere, Eden, Lowell, Montgomery, and Westfield. It is estimated that over a ten-year period, 347,000 tons of carbon will be credited to the project for a value of $2.4 million. This also has an equivalent benefit of removing more than 55,000 cars from the highway.
Jim described the process to participate in the California Cap and Trade Market. The first thing that needs to occur is a carbon inventory of the forest land with statistical analysis. They used a company called Bluesource to do this work. The inventory was verified by someone with qualifications like Robert Turner’s, and the proposal went to, in this case, the California Board for an additional verification. The project will be monitored for 100 years, paid for by an endowment set up for this purpose. There is an annual paper review with an actual study every six or twelve years.
Nick Richardson, President and CEO of the Vermont Land Trust, who has ties to my neck of the woods, testified regarding their funding role in the project and support for the concept presented in the bill. Phil Huffman of the Nature Conservancy testified in support of the concept included in S.160 as well.
Michael Snyder, Commissioner of Forests, Parks, and Recreation, testified in support of the basic plan though felt a study committee would be a wise step to take. He also allowed as how he did not have staff available to do the extra work and that he would need funding for additional positions. Since we are not allowed to create holes in the budget we passed recently, we need to include language indicating that money would have to be available in order to move forward with this project.
This conversation has been doubly interesting because of our work on the Housekeeping Bill, H.525, in which we included the Ecosystem Services Investment Program (ESIP). ESIP would provide payments to farmers for implementing practices that increase the organic matter in their soil, which in turn sequesters carbon. All of these proposals are exciting because they provide an opportunity for the working landscape to contribute to strategies and solutions for a healthier future environment.