TWO WEEKS AFTER countries pledged their support to forests in Paris, Paula Swedeen and Joe Kane took a photographer and me for a hike in the Mount Rainier Gateway Reserve, a forest owned by the Nisqually Land Trust, of which Kane is the executive director. On our drive to the high reaches of the reserve we encountered a man named Donnie, who was on his way to the property’s ridgeline. Donnie wore jeans and a blue cotton sweater, an attire choice that grew more unfortunate as the falling snow accumulated.

Kane stopped his Toyota Tacoma and explained to the hiker that his organization owned the land. Donnie said he had been hiking there regularly for the last year, and began extolling the virtues of the forest. “Last year, I tracked two mountain lions, one bear, one coyote, and one bobcat,” he said.

The observed predatory concentration was welcome news for Swedeen and Kane, who teamed up to help protect this 520-acre swath of forest west of Mount Rainier for at least 100 years by creating the state’s first forest carbon offset project. The groves of Douglas fir and Western hemlock hug the steep faces above Ashford, cooling tributaries of the Mashel and Nisqually rivers. Those trees will be protected under the carbon project, a win for the blacktail deer, elk, and endangered marbled murrelet that live among them.

Swedeen, a forest policy specialist with the Washington Environmental Council, developed the project in accordance with California’s cap-and-trade market. (Unlike REDD+ credits such as Jadora’s, forest offsets on the California market are compliance-grade, meaning they can be used to meet government-mandated carbon caps.) In late November, the Nisqually Land Trust and Microsoft announced a deal for 35,000 of the available 37,000 offset credits. The land trust purchased the property in 2013 from Hancock Timber for $3.3 million, a price tag made palatable in part by the expected carbon-market revenue in the years to come.

“We borrowed from our own reserves and took the gamble, because we had done the inventory and we knew with high likelihood that there was carbon value,” Kane said.

Paula Swedeen, a forest policy specialist with the Washington Environmental Council, and Joe Kane, executive director of the Nisqually Land Trust, stand in the Nisqually Carbon Project they helped create. Photo by Rachel Coward

The forest today shows the mark of industrial logging — it is primarily fir, arranged in the checkerboard of age-specific plantings and harvests coordinated over decades. The offset plot’s calculated carbon capacity is 223 metric tons per acre, and over the coming decades, a transformation will take place. As these trees age beyond 45, by which time Hancock would normally cut them, they’ll become better habitat for spotted owls and other birds nesting in large boughs and trunk cavities. Studies show older trees pump more carbon into the soil through longer roots. Old-growth trees consume less water than do fast-growing young ones, and hold water in the soil, thus stabilizing the water table during dry periods. In 40 years, the forest’s carbon capacity is expected to double.

To Swedeen and Kane, the offset project, dubbed the Nisqually Carbon Project, is a step in the right direction when it comes to valuing ecosystem services. But to Elaine Oneil, the best thing for the planet would be to cut down those trees.

Oneil is the director of CORRIM, a consortium of 16 universities, including Washington, Washington State, and Oregon State, that studies the carbon life cycle of wood and wood products. For the past 18 years, CORRIM affiliated
researchers have studied how much carbon trees absorb, how long they retain that carbon, and how carbon intensive
their manufacture is. After seeing the research, Oneil strongly believes conservation for the sake of carbon reductions is flawed.

“There’s a carbon cost to doing that,” she said. “Yeah, you’re storing carbon, but you’re turning your factory into a warehouse.”

How does Oneil’s carbon factory work? During the 45-year timber rotation in the Northwest, a growing tree sequesters more carbon each year. Once that tree is cut down, it doesn’t immediately expel its stored carbon; rather, that carbon slowly leaks over the course of years. And when new trees are planted to replace the old ones, the factory chugs along, continually accumulating carbon faster than it can leak from the harvested timber.

Substitute wood products for more energy-intensive ones like concrete or steel, which do not store any carbon, and you have a carbon-negative system. Use a manufactured-wood I-beam instead of a steel floor joist, and you reduce nearly 5 kilograms of carbon for every kilogram of wood fiber used.

Another issue with forest offsets is that the very metric they hinge on — knowing how much carbon a forest can store — has no reliable determination method.

“What we measure is not carbon,” said Jeremy Fried, a researcher at the U.S. Forest Service Forestry Sciences Lab in Portland. “We measure the diameters of trees. We estimate the heights of trees. We estimate defect on those trees, all of which are going to affect the amount of carbon in that tree.” Once those estimations are made, the figures are plugged into one of many equations to estimate tree volume, and then that figure is plugged into one of many equations to estimate carbon capacity.

Many tree species don’t have equations tailored for them, while common species such as Douglas fir have thousands of combinations. Fried said this not only produces inherently unreliable data, but it allows carbon accountants to possibly choose an equation that exaggerates a plot’s carbon capacity.

It’s also hard to guarantee the three bases — additionality, leakage avoidance, and permanence — of forest offsets. Take the Nisqually project, for example. Now that the land trust owns the forest, does that eliminate the threat of future logging? Can one know for certain a future Hancock purchase isn’t motivated by the sale of its Nisqually property, thus constituting leakage? And who’s to say the Nisqually Land Trust will exist in 100 years, or what will happen if it sells the land in that timeframe?

According to Greg Fishbein, managing director of forests and climate for the Nature Conservancy, scale is one antidote to these concerns. The nonprofit has become a major forest offset developer, and is increasingly focusing on jurisdictional-scale projects, or those that span entire districts or states rather than parcels of private property.

“Working on a jurisdictional scale reduces the risk of leakage quite a bit because you’re talking about a much bigger area,” Fishbein said. “If you stop ranching on one place, but clear a different forest nearby, that would be captured (by jurisdictional monitoring) because you’re looking at carbon accounting on such a big scale.” Jurisdiction-scale developments, of course, require cooperative jurisdictions, and there’s little market demand nor political will for these types of projects.

Yet another issue confronting carbon markets is price. Carbon traded between $12 and $13 a ton last year in California’s marketplace; globally, avoided-deforestation credits sold for an average of $5.20 a ton in 2014. “If we ever break $30 a ton, we’ll see a lot more conservation projects funded with carbon,” Swedeen said.

Though reduced emissions is the sales pitch, the conservation of healthy ecosystems is actually what many forest offset developers are after. “When companies want to report zero emissions and use offset credits to do that, you benefit from that,” said Don Melnick, director of Columbia University’s Center for Environment, Economy, and Society. “But other companies that want to say they’re doing the … forest protection, and biodiversity conservation, and helping rural communities, you get that as well.”

Customers in the voluntary market also cherish the broader benefits of carbon offsets tied to social development.

“Our employees get so proud and excited around the carbon fee when they see the funds going out to our carbon offset projects, when they see that we are having an impact locally to preserve forests,” Microsoft’s DiCaprio said. “When you can reduce carbon and improve people’s lives, then people are proud from a corporate perspective. … That’s good will.”

For all its imperfections, the widespread adoption of a forest carbon market could yield significant results. A Duke University report found that a carbon price of $30 per ton could reduce 4 billion tons of emissions per year through avoided deforestation. Furthermore, conservation is one of the cheapest ways to achieve greenhouse gas reductions — it’s less expensive to preserve a forest than it is to, say, build a huge solar array and hook it to the grid. Making forest carbon part of a global compliance market similar to California’s would decrease the global allowance price more than 43 percent, the Duke report said.

Realizing these savings relies on a departure in the way trees are currently valued.

“The benefits of the forest that are monetized right now are timber and clearing it for agriculture,” said Brian Murray, a forest economist at Duke. “The idea is we need to price these other ecosystem services. The problem is those other services don’t have markets — they have extremely high value, and study after study bears that out, but they don’t have markets. Carbon has created a market for this. So the question is, will paying for carbon help bring along all these other ecosystem services the forest has, or will they gear things so we’re basically just growing trees for carbon?”

Attempts to price carbon typically involve cap-and-trade schemes, such as California’s, or a carbon tax like the one employed in British Columbia. Washington voters may get to decide between the two this year. A carbon tax initiative will show up on the November ballot unless the Legislature acts on it, and a cap-and-trade initiative could wind up there, too.

The two pricing systems could have very different effects on regional forest stocks. A carbon tax, according to CORRIM founder and UW professor emeritus Bruce Lippke, would create a greater demand for wood products because more energy-intensive materials would become more expensive.

A cap-and-trade that includes forest-carbon provisions could conversely alter the timber landscape. Research has shown carbon prices of about $14 per ton could slow timber harvest cycles up to 14 years (and more than double the value of timber in the U.S. South). Jack the price up to $55 a ton, Ohio State University’s Brent Sohngen has found, and it would be economically viable for more than 1.98 million acres of Northwest timberland to be permanently set aside for carbon sequestration. “It could fundamentally alter the way we value forests,” he said.

Prices, though, are far from $55 in the U.S. (Globally, carbon prices range from less than $1 per ton in Poland to $130 a ton in Sweden). So for nonprofits like the Nisqually Land Trust, offset sales present a method to fund yearly operations, such as maintenance and removal of logging roads, but donations still matter. “We need multiple revenue streams,” Kane said. “Carbon markets can be a very nice piece, but I don’t see it as being the silver bullet.”

DON TUTTLE OFTEN calls Jadora’s concessions “my land.” Jadora doesn’t own any of the land on which it develops offsets — it’s all owned by the government of Congo’s Orientale province — yet Tuttle still feels a sense of ownership.

“It’s a sense of responsibility and obligation at this point. To be honest, I wouldn’t mind going back to my job at the Smithsonian or the zoo and not really having that responsibility,” he said. “But when I call it ‘my property,’ it’s my property because I’ve got schools there now. I’ve got kids depending on education and a reasonable diet. I’ve convinced the loggers not to log there, which takes away one of their only sources of income on the property. So without me, without Jadora, there’s not really a substitute.”

The Congo’s forests are a prime lab for offset conservation. The harsh landscape and years of strife have left many of its old-growth forests untouched, and Jadora continues racking up concessions. A recent land grant from the provincial government will swell Jadora’s total concession portfolio to 21.6 million acres, allowing Jadora and its partners to preserve forest and study management practices in a protected, jurisdictional REDD+ project.

Not all of Jadora’s experiments have paid off. In one village, workers planted corn, but the neighboring wildlife decimated it. An incident like this — introducing an otherwise unused crop into natives’ lifestyles — is viewed by some as colonial paternalism. A major criticism of REDD+ projects is that Westerners swoop in to change indigenous populations’ established ways of life. Advocacy groups allege villagers are required to preserve trees to fulfill contracts that are engineered and signed without their knowledge or understanding.

Jadora employees tend to cacao seedlings in an Isangi village. Fifteen percent of Jadora revenue supports community projects. Since 2009, the company has built tilapia ponds, planted small cacao and coffee plantations, and built new schools. Photo courtesy Jadora.

“There are definitely some ethical issues here that indigenous peoples are just beginning to understand and are concerned about,” said Indigenous Environmental Network director Tom Goldtooth, who spoke out against REDD+ projects at COP21. “It goes back to reconciling spiritual knowledge. Some say, how can they reconcile selling the air, the atmosphere, and the trees, which is nothing but privatization of carbon? Who is renting, or leasing to brokers, these trees? At the end of the day, have the local communities actually been ensured title to the trees? No.”

Withholding cash payments to locals, as Jadora does, is also controversial in the development-aid world. But Jadora does let community boards decide which projects come to fruition, and it does not displace villages in its concessions, which some REDD+ projects allegedly have done.

Tuttle wouldn’t disclose financials, but he did say Jadora recently became profitable. That said, the company is increasingly emulating the nongovernmental organizations Tuttle wanted to diverge from. Grants from and partnerships with Seattle nonprofits PATH and the Bill and Melinda Gates Foundation will help implement nutritional programs for pregnant women within the Isangi concessions. Tuttle also has considered handing off management of some developments to larger conservation organizations with deeper pockets.

But there are bigger issues in the business plans of companies like Jadora. A forest offset tangentially monetizes deforestation avoidance; the actual driver of price is carbon, not the ecosystem as a whole. Tuttle and others want to save ecosystems, but they’re doing so by indirectly tackling a byproduct of the industrial revolution. Once carbon is eliminated from our energy systems, the value of forests to suck carbon out of the atmosphere diminishes.

Carbon offsets also value just one element of a forest’s ecological worth. Trees provide habitat for animals that can feed locals. A pristine, protected forest can boost tourism; stumps do not. They filter water, hold soil to prevent landslides, and clean the air.
“Each acre of this plot is worth thousands in ecosystem services,” Swedeen said of the Nisqually project. “We’re getting about $40 an acre (from carbon).”

Today’s forest carbon market is too complicated to be easily understood and marketed, yet not complex enough to capture the full value of a standing forest. Some believe, though, it is the best available bandage for wounded forests that are being assailed by global economics that value them in death, not in life.

“I shudder to think if (there were no market for forest carbon credits) because, let’s face it, we’re living in a fishbowl,” Tuttle said. “It doesn’t matter if this is occurring in the Congo or if it’s occurring in the North Slope of Alaska — we need to protect our global ecosystem. Each of these pieces — the Amazon forest, the Congo forest, the tundra, the coral reefs … saving these little pieces of the environment is not only a matter of corporate social responsibility or social consciousness, which is what is supplying the funds right now, but it is becoming a matter of global welfare.”