MCAFEE, Ky. — U.S. Agriculture Secretary Tom Vilsack said he would push Congress to add carbon credits for agriculture and forestry to the climate bill now moving through the House, and to give his department authority to oversee those segments of the proposed “cap and trade” system, rather than the U.S. Environmental Protection Agency.
“We will be advocating forcefully” for both provisions, Vilsack said at a community forum in central Kentucky cattle country.
He also said he agreed with House Agriculture Committee Chairman Collin Peterson, D-Minn., that calculations of the carbon footprint of ethanol should not include “indirect land use,” such as the conversion of forest land to agriculture when expansion of corn acreage for ethanol pushes production of other crops elsewhere, including other countries.
Not in agreement
That position is not in agreement with a recent finding by EPA, but Vilsack told reporters that EPA’s proposal is still “subject to peer review,” and he is confident that a final rule on the topic will find him and EPA Administrator Lisa Jackson in agreement.
Peterson said he and at least 26 other rural Democrats will oppose the Waxman-Markey climate bill unless EPA’s position on indirect land use is not reversed.
Vilsack said agriculture emits 7 percent to 10 percent of U.S. greenhouse gases but could be as much as “25 percent of the solution” via farming practices that prevent carbon dioxide from entering the atmosphere.
USDA is better suited
He said USDA is better suited than EPA to monitor those practices, since it has more than 2,000 offices and employees “in virtually every county in the country.”
During the forum, which lasted about an hour and a half, Vilsack touched on many issues facing his department.
Here’s a sampling.
Animal ID
Though he was on a cattle farm in the state that is the largest cattle producer east of the Mississippi River, Vilsack didn’t mention animal agriculture until asked about what is probably the hottest issue on his plate, the National Animal Identification System.
The system is voluntary and Vilsack said only about 30 percent of producers participate, so some in Congress are reluctant to keep funding it, but an effective system is needed to maintain foreign markets.
Some countries have temporarily blocked imports of U.S. beef after reports of animal diseases such as bovine spongiform encephalopathy, commonly called “mad cow disease.”
Vilsack said, “I’m a little scared that if you do away with the program . . . you have a more difficult time convincing our trading partners that American beef is safe.”
Improve the system
Vilsack said the department’s current listening sessions on the issue may find “a creative way we can improve this system so more people can participate.”
He told reporters that a participation rate of 70 to 80 percent is needed to give confidence to foreign markets, but declined to put a time frame on that goal.
In a separate interview, he declined to say what circumstances should require the program to become mandatory “because people will read into that answer . . . that I’ve made a decision about how the animal identification system should work.”
Strong objections
The prospect of a mandatory system has brought strong objections from small farmers, who say its cost would be too much for them, but Vilsack said he had also “heard small producers say this is a good thing.”
He said the suggestion of subsidies for small farmers to join the system is “still up in the air,” awaiting conclusion of the listening sessions.
“I would hope that by the end of the summer we’ve got a clear idea of what will work.”
Dairy farmers in crisis
Dairy farmers are “in crisis,” Carolyn Orr of the Council of State Governments told Vilsack as she asked him when the system that controls their industry will start to be reformed.
“I don’t want to say that change is imminent, because this is a contentious issue,” Vilsack replied.
He said USDA has been “trying to stop the bleeding in dairy,” by putting 200 million pounds of nonfat dry milk into food programs and reinstating its export-assistance program for the industry.
The latter move was strongly criticized by 29 nations at the World Trade Organization.
Vilsack said he heard recently about a California dairyman who committed suicide, leaving seven children and a wife to keep their farm going.
“There’s a human cost to this that we sometimes don’t appreciate,” he said, after telling that story and one about calling the widow of an Iowa hog farmer who killed himself in 1999, soon after Vilsack became the state’s governor.
“We try to do all we can for these people,” he said with a touch of frustration. “I just don’t want to have to make another call like that.”
Conservation programs
To a questioner who voiced concern about proposed budget cuts in conservation programs, Vilsack said there wouldn’t be a cut in spending, because applications for payments always fall short of the appropriations.
In fact, he said, “I think you’re going to see a pretty significant increase.”
To another questioner, who asked for resumption of full funding for the Resource Conservation and Development Program, Vilsack said he knows from his experience as a governor, state senator and mayor that the program does good work, but “it’s just a question of who pays for it,” and who benefits from it.
States and localities get the benefit, he said, and the department must fund places to cut its budget to help reduce the federal deficit.
He said the current budget proposal was drafted in four weeks, as the administration began, and it did not have time to dig deeply for places to save money and spend it more efficiently.
The Department of Food?
Vilsack and his audience appeared to agree most about the need to educate people outside rural areas about their connections to agriculture.
“I think there’s going to be a real interest on the part of consumers to know their farmer,” he said.
The secretary said USDA is “often misunderstood,” and he is working with non-rural members of Congress to “rebrand the department.”
He said the planting of a “people’s garden” outside the huge USDA headquarters on Independence Avenue in Washington provides “a very graphic opportunity for people to understand” the department’s relationship to food.
“We take our food supply for granted,” he said. “I think we also take our water supply for granted. We can no longer do that.”
Begin at early age
He said public education should begin at an early age.
“The more we can get kids’ hands in the dirt, the better off we will be as a country,” and the better the decisions the political system makes about agriculture will be, he said.
Later in the day, Vilsack visited a food bank in Louisville.
(Al Cross is the director of the Institute for Rural Journalism and Community Issues at the University of Kentucky, Lexington, Ky.)
Saturday, June 6, 2009
Monday, June 1, 2009
Carbon credit scheme will draw organized crime: Interpol
Monday Jun 01, 2009
By The Edmonton Journal
Organized crime syndicates are eyeing the nascent forest carbon credit industry as a potentially lucrative new opportunity for fraud, an Interpol environmental crime official said on Friday.
Peter Younger, an environmental crimes specialist at the world's largest international police agency, was referring to a UN-backed scheme called "reducing emissions from deforestation and degradation." REDD aims to unlock potentially billions of dollars for developing countries that conserve and restore their forests. In return, they would earn carbon credits that can be sold for profit to developed nations that need to meet greenhouse gas emission reduction targets.
"If you are going to trade any commodity on the open market, you are creating a profit-and-loss situation. There will be fraudulent trading of carbon credits," he told Reuters in an interview at a forestry conference in Nusa Dua on the Indonesian island of Bali.
"In future, if you are running a factory and you desperately need credits to offset your emissions, there will be someone who can make that happen for you. Absolutely, organized crime will be involved."
Younger called on governments, multi-lateral bodies and NGOs to involve law enforcement agencies more in the development of REDD policies and in the fight against illegal logging and deforestation, which are responsible for about 20 per cent of mankind's greenhouse gas emissions.
"It struck me, as I sit here at this conference, as ironic that I am the only policeman here. You say you want to strike up partnerships to address illegal logging -- who with?" he said. "Consider resourcing law enforcement efforts and not just relying on NGOs and other nice people to do it for you."
Forests soak up vast amounts of carbon dioxide, and REDD aims to reward governments and local communities for every tonne of CO2 locked up by a forest over decades, equating to a potentially very large flow of cash globally for forest credits.
Local communities are supposed to earn a share of REDD credit sales to pay for better health, education and alternative livelihoods that entice them to protect rather than cut down surrounding forests. But revenue-sharing measures have yet to be worked out. Fraud could include claiming credits for forests that do not exist or were not protected, Younger said.
By The Edmonton Journal
Organized crime syndicates are eyeing the nascent forest carbon credit industry as a potentially lucrative new opportunity for fraud, an Interpol environmental crime official said on Friday.
Peter Younger, an environmental crimes specialist at the world's largest international police agency, was referring to a UN-backed scheme called "reducing emissions from deforestation and degradation." REDD aims to unlock potentially billions of dollars for developing countries that conserve and restore their forests. In return, they would earn carbon credits that can be sold for profit to developed nations that need to meet greenhouse gas emission reduction targets.
"If you are going to trade any commodity on the open market, you are creating a profit-and-loss situation. There will be fraudulent trading of carbon credits," he told Reuters in an interview at a forestry conference in Nusa Dua on the Indonesian island of Bali.
"In future, if you are running a factory and you desperately need credits to offset your emissions, there will be someone who can make that happen for you. Absolutely, organized crime will be involved."
Younger called on governments, multi-lateral bodies and NGOs to involve law enforcement agencies more in the development of REDD policies and in the fight against illegal logging and deforestation, which are responsible for about 20 per cent of mankind's greenhouse gas emissions.
"It struck me, as I sit here at this conference, as ironic that I am the only policeman here. You say you want to strike up partnerships to address illegal logging -- who with?" he said. "Consider resourcing law enforcement efforts and not just relying on NGOs and other nice people to do it for you."
Forests soak up vast amounts of carbon dioxide, and REDD aims to reward governments and local communities for every tonne of CO2 locked up by a forest over decades, equating to a potentially very large flow of cash globally for forest credits.
Local communities are supposed to earn a share of REDD credit sales to pay for better health, education and alternative livelihoods that entice them to protect rather than cut down surrounding forests. But revenue-sharing measures have yet to be worked out. Fraud could include claiming credits for forests that do not exist or were not protected, Younger said.
Wednesday, May 27, 2009
Forest offsets give EPA regulators some tough nuts to crack
If a tree grows in a forest, does it make an emissions offset? What happens if it burns down? Both the integrity and the cost of the legislation working its way through Congress that would put a cap on U.S. greenhouse gas emissions hang on questions like these.
Experts have for the most part applauded the rigorous criteria for offsets in the far-reaching climate and energy bill passed by the House Energy and Commerce Committee last week.
But while the bill, proposed by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), lays out a game plan, U.S. EPA would have to answer these and many other questions. The task could be one of the more complicated ones the agency has faced.
"Offsets are really going to allow this bill to get passed," said Shanna Brownstein, a policy associate with the Climate Trust, a nonprofit offset provider. "But implementation is critical, because it could very easily compromise the environmental integrity of the entire program."
The reason is that offsets -- greenhouse gas emissions reductions that occur outside of the overall carbon cap -- can be bought as credits by regulated industries to lower their compliance costs. They could account for up to 2 billion tons of the planned emissions reductions every year.
Half would be sourced domestically and half abroad, although the most recent Waxman-Markey substitute allows that international credits could reach three-quarters of the total in the likely chance that the U.S.-based market falls short.
But, as some are quick to note, offsets are tricky business. The agency is tasked with setting provisions to verify and enforce those reductions, both in the United States and, even harder, abroad. EPA is also to determine what constitutes a "permanent" emission cut that is "additional," or wouldn't have otherwise occurred without a carbon price.
Some consider it an unattainable mandate. "It's impossible to ensure," said Environment America's federal global warming director, Emily Figdor. Others, most notably a number of major environmental groups and businesses that have signed onto the U.S. Climate Action Partnership, have backed offsets that come with rigorous standards.
For regulated industries, they are among the most important components of the bill. Without international offsets, the Waxman-Markey cap-and-trade program could nearly double in cost, EPA estimates.
And although several previous cap-and-trade bills outlined specific projects and sectors, such as forestry and agriculture, that would qualify as offsets, the Waxman-Markey substitute instead would give EPA, advised by an independent nine-member Offsets Integrity Advisory Board, authority to decide which will make the cut.
Much will hang on an advisory board
The latitude left to EPA is largely on purpose. Jake Schmidt, international climate policy director for the Natural Resources Defense Council, said that the move takes a lot of the politics out of the current offsets debate.
But sectors looking to participate in a potentially lucrative market are wrangling to get more specific language back into the bill (ClimateWire, May 20). Rep. Zack Space (D-Ohio), for example, is working with Chairman Waxman to incorporate some certainty for the agricultural community in the offset market into the bill, according to his spokesman.
Others are happy about Congress' hands-off approach and for provisions requiring the agency periodically review its own rules. "The best aspect of the quality controls is that the bill leaves the technical decisions to the scientists," said Figdor.
The result, however, could be to push the political struggle down the chain to the selection and activities of the new advisory board, which the bill's language indicates could have substantial influence on EPA's decisions, said Michael Wara, a law professor at Stanford University.
"Everyone who is regulated or is selling offsets wants as much in as possible. This is the cost-control money, and these people are going to be the gatekeepers," he said.
Conservative regulations could control the supply
At minimum, EPA will have a delicate balancing act on its hands. It could take a conservative approach, limiting itself to projects that unambiguously meet the stringent criteria, but that would likely reduce the offset supply, especially early on in the program, several experts in offset projects and markets said.
One reason is the substantial gray area in deciding whether emissions reductions are additional, especially on the international side and in state-controlled economies like China's, said Wara. That could play out the extent to which EPA approves already-existing projects for the program, an important source for the initial market supply.
For example, the Obama administration could potentially certify some credits from the United Nations' Clean Development Mechanism, a program that has been fraught with controversies over questionable projects, said Alexia Kelly, a senior associate in the World Resources Institute's climate and energy program, although she questioned whether there would be the "political appetite" to do so.
Perhaps most significantly, the bill gives EPA, the State Department and the U.S. Agency for International Development the power to work out sector-by-sector baseline emissions thresholds with foreign countries, under which projects could qualify for offsets in the U.S. market. "It's sort of like a cap-and-trade with training wheels," said Wara.
On the U.S. side, EPA will likely look toward existing programs like the Regional Greenhouse Gas Initiative and the Climate Action Reserve, which has been busy building regulatory quality protocols to approve projects based on sector-wide standards for landfills, livestock and forests.
Today, however, RGGI has not yet approved any offset projects. The Climate Action Reserve recently issued its millionth offset credit, which would still be a small drop in the bucket for an economywide program.
Gary Gero, the Climate Action Reserve's president, is confident that the program could scale up significantly before cap and trade takes effect, and that its standardized methodologies allow for quick approval. He has been urging EPA to adopt its model or even to contract out the process to the Climate Action Reserve itself.
The agency itself already has some experience supervising offsets through voluntary programs and protocols, such as its Climate Leaders program. Those, however, are far less stringent than a regulatory program would be, said Kelly.
Regardless of the overall approach, many agreed that the need for speed is troublesome. Should the bill pass, EPA would have two years after its passage to get regulations into effect and provide an initial supply to the market.
"Look at everything they have to do to approve even a sector of offsets. They are going to be under a lot of pressure to rush, particularly if they are understaffed," said Victor Flatt, a University of Houston law professor and a scholar with the Center for Progressive Reform. Brownstein said it would be difficult for EPA to get a real head start until the legislation passes, since it currently lacks the mandate, funding and staff.
Will a forest fire cause 'havoc' in financial markets?
Flatt worried that the offset program could run into not only environmental trouble but also financial trouble if EPA makes early missteps in approving projects. He's essentially concerned about "toxic offsets."
The bill already incorporates an insurance plan on the international side, a buffer that requires five foreign-bought offset credits for every four emissions allowances awarded, leaving one to a common pool. For domestic offsets, the substitute bill removed this wiggle room, said Flatt. The only insurance is a requirement that carbon sequestration projects reimburse EPA if the project "reverses," or releases its captured emissions.
If a tree in an offset program, for example, is intentionally logged, the bill requires that project developer pay back the offset credit. But if the loss is "unintentional," say, through a forest fire, the project owner only returns half the cost to EPA.
This one provision, said Flatt, has the potential to cause havoc in emissions financial markets. "To the extent that they can, EPA really needs to have some way to make sure they are made whole again."
Copyright 2009 E&E Publishing. All Rights Reserved.
For more news on energy and the environment, visit www.climatewire.net
Experts have for the most part applauded the rigorous criteria for offsets in the far-reaching climate and energy bill passed by the House Energy and Commerce Committee last week.
But while the bill, proposed by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), lays out a game plan, U.S. EPA would have to answer these and many other questions. The task could be one of the more complicated ones the agency has faced.
"Offsets are really going to allow this bill to get passed," said Shanna Brownstein, a policy associate with the Climate Trust, a nonprofit offset provider. "But implementation is critical, because it could very easily compromise the environmental integrity of the entire program."
The reason is that offsets -- greenhouse gas emissions reductions that occur outside of the overall carbon cap -- can be bought as credits by regulated industries to lower their compliance costs. They could account for up to 2 billion tons of the planned emissions reductions every year.
Half would be sourced domestically and half abroad, although the most recent Waxman-Markey substitute allows that international credits could reach three-quarters of the total in the likely chance that the U.S.-based market falls short.
But, as some are quick to note, offsets are tricky business. The agency is tasked with setting provisions to verify and enforce those reductions, both in the United States and, even harder, abroad. EPA is also to determine what constitutes a "permanent" emission cut that is "additional," or wouldn't have otherwise occurred without a carbon price.
Some consider it an unattainable mandate. "It's impossible to ensure," said Environment America's federal global warming director, Emily Figdor. Others, most notably a number of major environmental groups and businesses that have signed onto the U.S. Climate Action Partnership, have backed offsets that come with rigorous standards.
For regulated industries, they are among the most important components of the bill. Without international offsets, the Waxman-Markey cap-and-trade program could nearly double in cost, EPA estimates.
And although several previous cap-and-trade bills outlined specific projects and sectors, such as forestry and agriculture, that would qualify as offsets, the Waxman-Markey substitute instead would give EPA, advised by an independent nine-member Offsets Integrity Advisory Board, authority to decide which will make the cut.
Much will hang on an advisory board
The latitude left to EPA is largely on purpose. Jake Schmidt, international climate policy director for the Natural Resources Defense Council, said that the move takes a lot of the politics out of the current offsets debate.
But sectors looking to participate in a potentially lucrative market are wrangling to get more specific language back into the bill (ClimateWire, May 20). Rep. Zack Space (D-Ohio), for example, is working with Chairman Waxman to incorporate some certainty for the agricultural community in the offset market into the bill, according to his spokesman.
Others are happy about Congress' hands-off approach and for provisions requiring the agency periodically review its own rules. "The best aspect of the quality controls is that the bill leaves the technical decisions to the scientists," said Figdor.
The result, however, could be to push the political struggle down the chain to the selection and activities of the new advisory board, which the bill's language indicates could have substantial influence on EPA's decisions, said Michael Wara, a law professor at Stanford University.
"Everyone who is regulated or is selling offsets wants as much in as possible. This is the cost-control money, and these people are going to be the gatekeepers," he said.
Conservative regulations could control the supply
At minimum, EPA will have a delicate balancing act on its hands. It could take a conservative approach, limiting itself to projects that unambiguously meet the stringent criteria, but that would likely reduce the offset supply, especially early on in the program, several experts in offset projects and markets said.
One reason is the substantial gray area in deciding whether emissions reductions are additional, especially on the international side and in state-controlled economies like China's, said Wara. That could play out the extent to which EPA approves already-existing projects for the program, an important source for the initial market supply.
For example, the Obama administration could potentially certify some credits from the United Nations' Clean Development Mechanism, a program that has been fraught with controversies over questionable projects, said Alexia Kelly, a senior associate in the World Resources Institute's climate and energy program, although she questioned whether there would be the "political appetite" to do so.
Perhaps most significantly, the bill gives EPA, the State Department and the U.S. Agency for International Development the power to work out sector-by-sector baseline emissions thresholds with foreign countries, under which projects could qualify for offsets in the U.S. market. "It's sort of like a cap-and-trade with training wheels," said Wara.
On the U.S. side, EPA will likely look toward existing programs like the Regional Greenhouse Gas Initiative and the Climate Action Reserve, which has been busy building regulatory quality protocols to approve projects based on sector-wide standards for landfills, livestock and forests.
Today, however, RGGI has not yet approved any offset projects. The Climate Action Reserve recently issued its millionth offset credit, which would still be a small drop in the bucket for an economywide program.
Gary Gero, the Climate Action Reserve's president, is confident that the program could scale up significantly before cap and trade takes effect, and that its standardized methodologies allow for quick approval. He has been urging EPA to adopt its model or even to contract out the process to the Climate Action Reserve itself.
The agency itself already has some experience supervising offsets through voluntary programs and protocols, such as its Climate Leaders program. Those, however, are far less stringent than a regulatory program would be, said Kelly.
Regardless of the overall approach, many agreed that the need for speed is troublesome. Should the bill pass, EPA would have two years after its passage to get regulations into effect and provide an initial supply to the market.
"Look at everything they have to do to approve even a sector of offsets. They are going to be under a lot of pressure to rush, particularly if they are understaffed," said Victor Flatt, a University of Houston law professor and a scholar with the Center for Progressive Reform. Brownstein said it would be difficult for EPA to get a real head start until the legislation passes, since it currently lacks the mandate, funding and staff.
Will a forest fire cause 'havoc' in financial markets?
Flatt worried that the offset program could run into not only environmental trouble but also financial trouble if EPA makes early missteps in approving projects. He's essentially concerned about "toxic offsets."
The bill already incorporates an insurance plan on the international side, a buffer that requires five foreign-bought offset credits for every four emissions allowances awarded, leaving one to a common pool. For domestic offsets, the substitute bill removed this wiggle room, said Flatt. The only insurance is a requirement that carbon sequestration projects reimburse EPA if the project "reverses," or releases its captured emissions.
If a tree in an offset program, for example, is intentionally logged, the bill requires that project developer pay back the offset credit. But if the loss is "unintentional," say, through a forest fire, the project owner only returns half the cost to EPA.
This one provision, said Flatt, has the potential to cause havoc in emissions financial markets. "To the extent that they can, EPA really needs to have some way to make sure they are made whole again."
Copyright 2009 E&E Publishing. All Rights Reserved.
For more news on energy and the environment, visit www.climatewire.net
Monday, April 13, 2009
Exports at risk from U.S. climate change bill
Submitted by Brett H on Wed, 04/08/2009 - 09:25.
Tags:
Newsfeed
Date: -->
Wednesday Apr 08, 2009
By
The Globe and Mail
Proposed U.S. legislation could slap import levies on a range of Canadian products - from steel and cement to paper and ceramics - if Washington deems Canada is lax in fighting global warming.
The climate change legislation also includes low-carbon standards that could drive up the cost of imports from the Alberta oil sands.
Leading Democrats in the U.S. Congress this week introduced a bill to cap greenhouse gas emissions that would require the administration to impose tariff-like fees on importers whose own governments don't have regulations, reporting rules or enforcement mechanisms that are as tough as those laid out in the legislation.
The proposals in the bill have wide Democratic support and stand a good chance of becoming law.
U.S. President Barack Obama and congressional leaders are promising to move quickly on measures to combat climate change - from emission caps on industry, to low-carbon standards for transportation fuel, to renewable energy portfolios for utilities.
And while Mr. Obama yesterday warned of the dangers of protectionism at the Group of 20 meeting in London, trade experts say the environmental policies that he backs include a minefield of potential protectionist measures that would favour domestic producers over importers.
Coming after U.S. Energy Secretary Steven Chu's recent musings about using tariffs to protect American industry, the bill introduced this week by Representative Henry Waxman has heightened fears that the U.S. climate legislation will accelerate growing ecoprotectionism around the globe.
"We're very concerned," said Jayson Myers, president of the Canadian Manufacturers & Exporters association.
"I think the worst thing we could see here is regulatory standards being applied on manufacturing processes to restrict access to the U.S. market. ... On issues of enforcement, the boundaries get blurred pretty quickly, especially when you've got strong, local political pressure saying 'protect American jobs.' "
Chinese officials reacted angrily to Mr. Chu's suggestion at a congressional committee two weeks ago that some sort of tariffs could be used as a "weapon" to protect American jobs.
Under the legislation introduced this week, the U.S. government would be required to act when American manufacturing industries lose market share to foreign competitors deemed to enjoy an unfair environmental advantage.
Such importers would be required to purchase "emissions allowances" meant to equalize the environmental burden faced by U.S. producers.
The Obama administration and congressional leaders have vowed to pass climate change legislation this year, despite the recession. There is widespread agreement among supporters that such legislation must include measures to protect energy-intensive industries from unfair competition.
The current bill specifically targets industries such as steel and steel products, aluminum, cement, glass, pulp and paper, chemicals and ceramics.
Environmental experts argue such measures are necessary to prevent "leakage" - the loss of environmental benefits that would occur when energy-intensive industries boost production, and emissions, in less-strict jurisdictions and increase their exports to the United States.
Under the proposed legislation, Washington would have the power to control the volume of energy-intensive imports - and their prices - from countries that do not meet U.S. standards, said Elisabeth DeMarco, a Toronto-based lawyer with Macleod Dixon LLP.
That's because the proposed law would require importers to purchase "international reserve allowances" but would only make a limited number of those allowances available.
"Our provincial and federal governments need to wake up as to what is going on," Ms. DeMarco said. She added Canadian industries are going to have to step up their efforts to ensure their principal export market is not threatened by the U.S. climate change legislation.
Even as Congress debates a cap-and-trade bill, the U.S. government is expected to proceed with "product standards" like renewable-power standards for utilities and low-carbon fuel regulations, said Aldyen Donnelly, an economist and president of WDA Consulting Inc. in Vancouver.
She said many Democrats view the proposed environmental regulations as a way of rolling back massive job losses in the goods-producing sector that the United States has suffered over the past decade. "It was inevitable that as soon as the Democrats came to power, they were going to go this way," she said.
Prime Minister Stephen Harper's government is attempting to negotiate a continental agreement covering greenhouse gas emissions that would ensure Canadian industries are not unduly disadvantaged by the U.S. climate change regulations.
The government had been scheduled to unveil its own regulations to limit emissions on key industries but Environment Minister Jim Prentice has signalled that effort is on hold until there is greater clarity from Washington.
However, Ottawa will have to revisit its plans for intensity-based targets - which set regulations as a percentage of a company's production rather than hard caps - to ensure its plan is consistent with the U.S. approach. Canada must also ensure its enforcement mechanisms - and even its reporting rules - are consistent with U.S. approaches to avoid trade harassment.
Tags:
Newsfeed
Date: -->
Wednesday Apr 08, 2009
By
The Globe and Mail
Proposed U.S. legislation could slap import levies on a range of Canadian products - from steel and cement to paper and ceramics - if Washington deems Canada is lax in fighting global warming.
The climate change legislation also includes low-carbon standards that could drive up the cost of imports from the Alberta oil sands.
Leading Democrats in the U.S. Congress this week introduced a bill to cap greenhouse gas emissions that would require the administration to impose tariff-like fees on importers whose own governments don't have regulations, reporting rules or enforcement mechanisms that are as tough as those laid out in the legislation.
The proposals in the bill have wide Democratic support and stand a good chance of becoming law.
U.S. President Barack Obama and congressional leaders are promising to move quickly on measures to combat climate change - from emission caps on industry, to low-carbon standards for transportation fuel, to renewable energy portfolios for utilities.
And while Mr. Obama yesterday warned of the dangers of protectionism at the Group of 20 meeting in London, trade experts say the environmental policies that he backs include a minefield of potential protectionist measures that would favour domestic producers over importers.
Coming after U.S. Energy Secretary Steven Chu's recent musings about using tariffs to protect American industry, the bill introduced this week by Representative Henry Waxman has heightened fears that the U.S. climate legislation will accelerate growing ecoprotectionism around the globe.
"We're very concerned," said Jayson Myers, president of the Canadian Manufacturers & Exporters association.
"I think the worst thing we could see here is regulatory standards being applied on manufacturing processes to restrict access to the U.S. market. ... On issues of enforcement, the boundaries get blurred pretty quickly, especially when you've got strong, local political pressure saying 'protect American jobs.' "
Chinese officials reacted angrily to Mr. Chu's suggestion at a congressional committee two weeks ago that some sort of tariffs could be used as a "weapon" to protect American jobs.
Under the legislation introduced this week, the U.S. government would be required to act when American manufacturing industries lose market share to foreign competitors deemed to enjoy an unfair environmental advantage.
Such importers would be required to purchase "emissions allowances" meant to equalize the environmental burden faced by U.S. producers.
The Obama administration and congressional leaders have vowed to pass climate change legislation this year, despite the recession. There is widespread agreement among supporters that such legislation must include measures to protect energy-intensive industries from unfair competition.
The current bill specifically targets industries such as steel and steel products, aluminum, cement, glass, pulp and paper, chemicals and ceramics.
Environmental experts argue such measures are necessary to prevent "leakage" - the loss of environmental benefits that would occur when energy-intensive industries boost production, and emissions, in less-strict jurisdictions and increase their exports to the United States.
Under the proposed legislation, Washington would have the power to control the volume of energy-intensive imports - and their prices - from countries that do not meet U.S. standards, said Elisabeth DeMarco, a Toronto-based lawyer with Macleod Dixon LLP.
That's because the proposed law would require importers to purchase "international reserve allowances" but would only make a limited number of those allowances available.
"Our provincial and federal governments need to wake up as to what is going on," Ms. DeMarco said. She added Canadian industries are going to have to step up their efforts to ensure their principal export market is not threatened by the U.S. climate change legislation.
Even as Congress debates a cap-and-trade bill, the U.S. government is expected to proceed with "product standards" like renewable-power standards for utilities and low-carbon fuel regulations, said Aldyen Donnelly, an economist and president of WDA Consulting Inc. in Vancouver.
She said many Democrats view the proposed environmental regulations as a way of rolling back massive job losses in the goods-producing sector that the United States has suffered over the past decade. "It was inevitable that as soon as the Democrats came to power, they were going to go this way," she said.
Prime Minister Stephen Harper's government is attempting to negotiate a continental agreement covering greenhouse gas emissions that would ensure Canadian industries are not unduly disadvantaged by the U.S. climate change regulations.
The government had been scheduled to unveil its own regulations to limit emissions on key industries but Environment Minister Jim Prentice has signalled that effort is on hold until there is greater clarity from Washington.
However, Ottawa will have to revisit its plans for intensity-based targets - which set regulations as a percentage of a company's production rather than hard caps - to ensure its plan is consistent with the U.S. approach. Canada must also ensure its enforcement mechanisms - and even its reporting rules - are consistent with U.S. approaches to avoid trade harassment.
Sunday, April 12, 2009
Carbon-Intensive Mutual Funds to Become Big Losers
BOSTON, Mass. and LONDON, United Kingdom -- The carbon footprints of the nation’s largest mutual funds vary wildly, with the fund with the biggest footprint 38 times more carbon-intensive than the fund with the slimmest footprint. Environmental research firm Trucost hopes the results of its just-released report “Carbon Counts USA” will close the gap now that fund managers can access the data to measure financial risk exposure from future carbon constraints, such as climate change legislation and a greenhouse gas cap-and-trade program. The company ranked the country’s 91 largest mutual funds, with holdings worth $1.55 trillion, based on their carbon footprints. “The data hasn’t been available before, so in a sense, they’ve been flying blind,” Simon Thomas, Trucost’s chief executive, said during a conference call Wednesday. Mutual funds with large carbon footprints will likely become big losers in a carbon-constrained economy because a price on emissions will increase operating costs for companies with intensive fuel sources and processes. Most, if not all, companies will see their energy costs grow. Funds with the smallest footprints are will be impacted the least. Carbon-intensive funds like the Fidelity Capital Appreciation Fund, for example, could be subject to costs of nearly $125 million, or 3.32 percent of revenue, if the price of carbon is factored in, Trucost said. The company used a cost of $28.24 per metric ton as the basis for this calculation. In comparison, the most carbon-efficient fund, the Financial Select Sector SPDR Fund, would be subject to $8.3 million in carbon costs under the same scenario.There is no correlation between carbon footprint and performance, Trucost said. Rather, such a correlation won't materialize until a global carbon market is put in place.The study analyzed the funds based on eight investment styles: core, growth, value, index, country/regional, equity income, sector and sustainability/Socially Responsible Investment funds. As a whole, the portfolios of the 91 funds generate about 615 million metric tons of greenhouse gas emissions. The carbon footprint of the combined 91 funds measured in at 335 tons of carbon dioxide per million dollars of revenue. The carbon footprints of the S&P 500 and MSCI Europe funds were virtually identical: 384 and 383 tons of emissions per million dollars of revenue. Surprisingly, the Sentinel Sustainable Core Opportunities Fund -- an SRI fund -- had the fourth largest carbon footprint of the funds analyzed, with 692 tons of carbon dioxide equivalent produced per million dollars of revenue. Overall, however, the aggregated SRI funds had portfolios that produced just 226 tons of emissions per million dollars of revenue.The top five most carbon-efficient funds don’t invest in the utilities and oil and gas sectors. Instead their holdings are concentrated in lower-carbon financial services, banks and health care. Trucost declined to publish the full rankings of all 91 funds but said it may do so in the future.
The most carbon-efficient funds are:
Financial Select Sector SPDR Fund -- 40 tons of CO2 equivalent (tCO2e) per million dollars in revenue
Vanguard Health Care Fund -- 48
PowerShares QQQ Trust -- 69
Ariel Appreciation Fund -- 98
Oppenheimer Global Fund -- 111 The most carbon-intensive funds are:
iShares FTSE/Xinhua China 25 Index Fund -- 1,549 tCO2e per million dollars in revenue
Fidelity Capital Appreciation Fund -- 758
Janus Fund -- 744
Sentinel Sustainable Core Opportunities Fund -- 692
Energy Select Sector SPDR Fund -- 613
The most carbon-efficient funds are:
Financial Select Sector SPDR Fund -- 40 tons of CO2 equivalent (tCO2e) per million dollars in revenue
Vanguard Health Care Fund -- 48
PowerShares QQQ Trust -- 69
Ariel Appreciation Fund -- 98
Oppenheimer Global Fund -- 111 The most carbon-intensive funds are:
iShares FTSE/Xinhua China 25 Index Fund -- 1,549 tCO2e per million dollars in revenue
Fidelity Capital Appreciation Fund -- 758
Janus Fund -- 744
Sentinel Sustainable Core Opportunities Fund -- 692
Energy Select Sector SPDR Fund -- 613
Friday, April 10, 2009
Investors eye forestry, water opportunities in tough markets New York,
9 April: US investors have deserted the green investment space, according to analysts and investors speaking at a recent environmental markets conference in New York. But forestry offset projects are poised to be a major source of investment opportunities amid indications that they will be included in a federal carbon cap-and-trade programme, market participants said, while water projects are set to benefit from major investments from the US economic stimulus package.
“The truth is [the market is] still contracting,” said Hilary Kramer, managing director of Greentech Research in Cambridge, Massachusetts. “It’s a very difficult time.”
This is an unfortunate development because there are numerous businesses and technologies that need a relatively small investment to proceed, Kramer said, speaking at the Wall Street Green Trading Summit in New York on 1 & 2 April.
Wind energy – tipped as the most scalable and the most cost-competitive renewable technology – is a good investment, although it continues to be hobbled by lack of financing, said Rob Romero, portfolio manager for investment advisor Connective Capital Management in Palo Alto, California.
“The US is a great long-term opportunity because it has high wind speeds and nice locations, but certainly project finance is a near-term obstacle,” he said. “China is fantastic for wind right now. They need the power strategically. They have the money to pay for it and they have a very dependable government. They don’t have a Congress that has to debate things. They just make it happen. From an investment perspective, we do look at that as a very attractive opportunity.”
The solar sector probably has the fastest growth potential, but still has a major inventory overhang so the market will be challenging for the next few quarters, Romero said. Because of the supply issues, Connective looks for companies such as Phoenix Solar that have “a nice pipeline of well-funded customers”, he said.
But the fundamentals for the renewable energy sector remain strong and there are signs of a pickup, said Mark Cox, chief executive officer of New Energy Fund in New York. For example, there are two banks competing to finance a $40 million, 3.5MW solar project in the Mojave Desert. “This is the first crack in credit,” he said. “Whether it is widespread, I don’t know.”
Water projects represent another good investment opportunity, said William Brennan, managing principal of Brennan Investment Partners in Wayne, Pennsylvania, a firm that specialises in analysis of and investing in the water sector. Spending on water infrastructure increased to $550 billion in 2008, from $250 billion in 2003 , a number that could rise to $1 trillion by end of 2012 due to predictions of a dramatic decline in water resources over the next decade. “There still is an acceleration of spending in this space,” he said.
Spending will rise 6% to 8% in developed countries and 15% or more in emerging countries – with the US economic stimulus package including $14 billion for investments in water infrastructure and technology, he added.
Meanwhile, the cap-and-trade proposal issued last week by Congressmen Henry Waxman and Ed Markey, signals that forestry offsets will be included in a federal programme.
Radha Kuppalli, a Washington, DC-based director of New Forests, a forestry investment firm that manages $150 million in forest assets in the Asia-Pacific area, has met with potential investors over the past several weeks trying to raise funds for forestry projects in Australia, New Zealand and Southeast Asia. “What we’re finding is that there’s been just an evaporation of liquidity and it’s a total buyer’s market for those with capital,” she said. “They’re really seeking hard assets with cash yields.”
Some investors are still seeking out long-term opportunities related to climate change, natural resource and energy usage, and changing consumer preferences around environmental issues, she said. Forest projects fit these investment scenarios because they can address major environmental problems such as climate change, biodiversity loss and water management while generating substantial public and private sector revenue streams, Kuppalli said.
In the US carbon space, the signals in California, regional and federal programmes are “all pointing in a positive direction”, she said. California has been strengthening its forest protocols to bring more private investment and private landowners into its programme while Waxman-Markey signals forestry credits in the US and abroad will be included. “We really see some significant strides in this area,” Kuppalli said.
“The truth is [the market is] still contracting,” said Hilary Kramer, managing director of Greentech Research in Cambridge, Massachusetts. “It’s a very difficult time.”
This is an unfortunate development because there are numerous businesses and technologies that need a relatively small investment to proceed, Kramer said, speaking at the Wall Street Green Trading Summit in New York on 1 & 2 April.
Wind energy – tipped as the most scalable and the most cost-competitive renewable technology – is a good investment, although it continues to be hobbled by lack of financing, said Rob Romero, portfolio manager for investment advisor Connective Capital Management in Palo Alto, California.
“The US is a great long-term opportunity because it has high wind speeds and nice locations, but certainly project finance is a near-term obstacle,” he said. “China is fantastic for wind right now. They need the power strategically. They have the money to pay for it and they have a very dependable government. They don’t have a Congress that has to debate things. They just make it happen. From an investment perspective, we do look at that as a very attractive opportunity.”
The solar sector probably has the fastest growth potential, but still has a major inventory overhang so the market will be challenging for the next few quarters, Romero said. Because of the supply issues, Connective looks for companies such as Phoenix Solar that have “a nice pipeline of well-funded customers”, he said.
But the fundamentals for the renewable energy sector remain strong and there are signs of a pickup, said Mark Cox, chief executive officer of New Energy Fund in New York. For example, there are two banks competing to finance a $40 million, 3.5MW solar project in the Mojave Desert. “This is the first crack in credit,” he said. “Whether it is widespread, I don’t know.”
Water projects represent another good investment opportunity, said William Brennan, managing principal of Brennan Investment Partners in Wayne, Pennsylvania, a firm that specialises in analysis of and investing in the water sector. Spending on water infrastructure increased to $550 billion in 2008, from $250 billion in 2003 , a number that could rise to $1 trillion by end of 2012 due to predictions of a dramatic decline in water resources over the next decade. “There still is an acceleration of spending in this space,” he said.
Spending will rise 6% to 8% in developed countries and 15% or more in emerging countries – with the US economic stimulus package including $14 billion for investments in water infrastructure and technology, he added.
Meanwhile, the cap-and-trade proposal issued last week by Congressmen Henry Waxman and Ed Markey, signals that forestry offsets will be included in a federal programme.
Radha Kuppalli, a Washington, DC-based director of New Forests, a forestry investment firm that manages $150 million in forest assets in the Asia-Pacific area, has met with potential investors over the past several weeks trying to raise funds for forestry projects in Australia, New Zealand and Southeast Asia. “What we’re finding is that there’s been just an evaporation of liquidity and it’s a total buyer’s market for those with capital,” she said. “They’re really seeking hard assets with cash yields.”
Some investors are still seeking out long-term opportunities related to climate change, natural resource and energy usage, and changing consumer preferences around environmental issues, she said. Forest projects fit these investment scenarios because they can address major environmental problems such as climate change, biodiversity loss and water management while generating substantial public and private sector revenue streams, Kuppalli said.
In the US carbon space, the signals in California, regional and federal programmes are “all pointing in a positive direction”, she said. California has been strengthening its forest protocols to bring more private investment and private landowners into its programme while Waxman-Markey signals forestry credits in the US and abroad will be included. “We really see some significant strides in this area,” Kuppalli said.
Sunday, March 29, 2009
Taking Logging Into the 21st Century-carbon, biofuels
Source: Copyright 2009, New York Times
Date: March 29, 2009
Byline: William Yardley
Booming timber towns with three-shift lumber mills are a distant memory in the densely forested Northwest. Now, with the housing market and the economy in crisis, some rural areas have never been more raw. Mills keep closing.
People keep leaving. Unemployment in some counties is near 20 percent.
Yet in parts of the region, the decline is being met by an unlikely optimism. Some people who have long fought to clear-cut the region’s verdant slopes are trying to reposition themselves for a more environmentally friendly economy, motivated by changing political interests, the federal stimulus package and sheer desperation.
Some mills that once sought the oldest, tallest evergreens are now producing alternative energy from wood byproducts like bark or brush. Unemployed loggers are looking for work thinning federal forests, a task for which the stimulus package devotes $500 million; the goal is to make forests more resistant to wildfires and disease. Some local officials are betting there is revenue in a forest resource that few appreciated before: the ability of trees to absorb carbon dioxide, a heat-trapping gas that can contribute to global warming.
Pragmatism drives the shifting thinking, but a critical question remains:
can people really make a long-term living off the forest without cutting it down?
“I run into people all the time who think we’re lying and trying to go back to old logging ways,” said Jim Walls, director of the Lake County Resources Initiative in southeastern Oregon, a nonprofit agency that is trying to create jobs for rural residents in fields like biomass energy production and wildfire prevention. “It’s just not true.”
One new believer is Harold Jones. Hear him repent and reposition in the new economy.
“The only money I’ve ever made is cutting down trees,” Mr. Jones, 75, said just after coming in from thinning the stand of Douglas firs he has planted on 125 acres he owns here in Lowell. “So what I’ve tried to do in my retirement is to try to bring back and repay the Earth for a lot of the devastation I’ve caused it.”
Mr. Jones started logging in 1948 and has long rolled his eyes at “countercultural types” who protest timber sales. Yet in front of his property now are signs saying “Certified Family Forest.”
The certification process, supervised by the American Tree Farm System, requires Mr. Jones to manage and replant his land under the supervision of a professional forester. It is intended in part to give small tree farmers some credibility within the sustainable forestry movement, which promotes forest health, and to help them market their product as “green lumber.”
“It’s quite a process,” he said.
Restrictions on logging have prompted entrepreneurial thinking about the forest for years, but efforts have increased as states like Oregon and Washington have emphasized renewable energy and jobs that support it. In turn, the plummeting housing market has forced some timber companies to try to diversify — and even collaborate with environmentalists to protect forests from wildfires, disease and development.
“There’s been recognition in the last several years that we need the industry to carry out the restoration work we want accomplished,” said Jonathan Oppenheimer, a senior conservation associate for the Idaho Conservation League, which is negotiating with loggers and others with the goal of getting Congress to preserve parts of the Clearwater National Forest as wilderness.
For loggers and other rural workers, survival in the future might mean abandoning fights to cut older trees in exchange for being able to salvage smaller timber from burned forests. It might mean removing or rebuilding roads and structures on federal land, whether to reduce erosion or to improve recreational access. For the Forest Service, the stimulus money for thinning reflects an increasing emphasis on preventing wildfires, rather than simply fighting them, by removing smaller trees and brush from overgrown forests.
The work may be less profitable for big timber companies than clear-cutting a hillside, but it can create jobs in places accustomed to losing them.
In Lane County, Ore., on the wet west side of the Cascade Range, the county commission is looking for revenue to replace dwindling federal payments set up a decade ago to help governments in timber regions. Lane County received about $47 million this year, but the subsidies are declining and are scheduled to expire in 2012.
Now Lane County commissioners are asking the Legislature to draft a resolution urging Congress to pay counties that have large amounts of federal forest land for the carbon that their forests trap. Such a plan would depend on Congress’s developing a system for buying and selling so-called carbon offsets.
Not everyone likes the idea. Some loggers say it would be the final blow to their efforts to restore more logging on federal land. Jobs that have disappeared, they say, will never return.
“It puts us at risk,” said Robbie Robinson, president of Starfire Lumber in Cottage Grove, about 20 miles south of Eugene. Pyramids of Douglas fir rested outside his office window, no buyers to be found. “What I sense is another whole business being built, and the real problem is being able to harvest old trees.”
Forest economists say government spending, beginning with the stimulus package but also extending to any program to buy and sell carbon offsets, will be necessary to build a new economy in the rural Northwest.
Some supporters of sustainable forestry are concerned that, despite assurances by the Forest Service, the stimulus package will create only short-term jobs in the woods and miss the chance to invest in a complete “waste chain,” in which small timber and brush from thinning projects are put to use for lumber, biomass fuel and other purposes, potentially strengthening rural economies on many levels.
“We’re doing a lot of things here that nationally we say we want to do — biomass, fuels reduction, forest health, green jobs — we’re doing all of it now,” said Josh Anderson, the timber resource manager for Vaagen Brothers Lumber in Colville, Wash., which has worked with environmental groups to preserve wilderness land but has had to lay off about half of its 200 employees in recent months.
“We want to be here to be able to do that when things improve,” Mr. Anderson said. “We need to see something that moves a long-term trend toward work on these projects. It’s got to be pretty integrated.”
Mr. Walls, of the Lake County Resources Initiative, said a planned biomass energy plant in Lakeview, near the Nevada-California border, would generate 150 construction jobs, 50 to 75 permanent jobs in the forest and 15 at the plant. The plant would generate 13 megawatts of electricity, enough to power every home in the town of 2,300 and to contribute to the broader power grid.
But for the plant to operate, Mr. Walls said, it would need a steady flow of fuel, in the form of wood byproducts, from federal forest thinning and wildfire prevention, a pipeline that may or may not become permanent. The plant is seeking about $5 million in grant money under the stimulus package.
Mr. Walls said he was told by the Forest Service’s regional office in Portland that the project was a top prospect and that a decision was expected any day. He said its chances might have improved this month when Oregon’s governor, Theodore R. Kulongoski, appointed him to a committee to help oversee stimulus spending.
Even if the Lakeview project and others like it do fall into place, Mr.
Walls said, many other struggling timber towns still will need the demand for lumber to rebound. “In the end,” he said, “the housing market does have to turn back.”
Date: March 29, 2009
Byline: William Yardley
Booming timber towns with three-shift lumber mills are a distant memory in the densely forested Northwest. Now, with the housing market and the economy in crisis, some rural areas have never been more raw. Mills keep closing.
People keep leaving. Unemployment in some counties is near 20 percent.
Yet in parts of the region, the decline is being met by an unlikely optimism. Some people who have long fought to clear-cut the region’s verdant slopes are trying to reposition themselves for a more environmentally friendly economy, motivated by changing political interests, the federal stimulus package and sheer desperation.
Some mills that once sought the oldest, tallest evergreens are now producing alternative energy from wood byproducts like bark or brush. Unemployed loggers are looking for work thinning federal forests, a task for which the stimulus package devotes $500 million; the goal is to make forests more resistant to wildfires and disease. Some local officials are betting there is revenue in a forest resource that few appreciated before: the ability of trees to absorb carbon dioxide, a heat-trapping gas that can contribute to global warming.
Pragmatism drives the shifting thinking, but a critical question remains:
can people really make a long-term living off the forest without cutting it down?
“I run into people all the time who think we’re lying and trying to go back to old logging ways,” said Jim Walls, director of the Lake County Resources Initiative in southeastern Oregon, a nonprofit agency that is trying to create jobs for rural residents in fields like biomass energy production and wildfire prevention. “It’s just not true.”
One new believer is Harold Jones. Hear him repent and reposition in the new economy.
“The only money I’ve ever made is cutting down trees,” Mr. Jones, 75, said just after coming in from thinning the stand of Douglas firs he has planted on 125 acres he owns here in Lowell. “So what I’ve tried to do in my retirement is to try to bring back and repay the Earth for a lot of the devastation I’ve caused it.”
Mr. Jones started logging in 1948 and has long rolled his eyes at “countercultural types” who protest timber sales. Yet in front of his property now are signs saying “Certified Family Forest.”
The certification process, supervised by the American Tree Farm System, requires Mr. Jones to manage and replant his land under the supervision of a professional forester. It is intended in part to give small tree farmers some credibility within the sustainable forestry movement, which promotes forest health, and to help them market their product as “green lumber.”
“It’s quite a process,” he said.
Restrictions on logging have prompted entrepreneurial thinking about the forest for years, but efforts have increased as states like Oregon and Washington have emphasized renewable energy and jobs that support it. In turn, the plummeting housing market has forced some timber companies to try to diversify — and even collaborate with environmentalists to protect forests from wildfires, disease and development.
“There’s been recognition in the last several years that we need the industry to carry out the restoration work we want accomplished,” said Jonathan Oppenheimer, a senior conservation associate for the Idaho Conservation League, which is negotiating with loggers and others with the goal of getting Congress to preserve parts of the Clearwater National Forest as wilderness.
For loggers and other rural workers, survival in the future might mean abandoning fights to cut older trees in exchange for being able to salvage smaller timber from burned forests. It might mean removing or rebuilding roads and structures on federal land, whether to reduce erosion or to improve recreational access. For the Forest Service, the stimulus money for thinning reflects an increasing emphasis on preventing wildfires, rather than simply fighting them, by removing smaller trees and brush from overgrown forests.
The work may be less profitable for big timber companies than clear-cutting a hillside, but it can create jobs in places accustomed to losing them.
In Lane County, Ore., on the wet west side of the Cascade Range, the county commission is looking for revenue to replace dwindling federal payments set up a decade ago to help governments in timber regions. Lane County received about $47 million this year, but the subsidies are declining and are scheduled to expire in 2012.
Now Lane County commissioners are asking the Legislature to draft a resolution urging Congress to pay counties that have large amounts of federal forest land for the carbon that their forests trap. Such a plan would depend on Congress’s developing a system for buying and selling so-called carbon offsets.
Not everyone likes the idea. Some loggers say it would be the final blow to their efforts to restore more logging on federal land. Jobs that have disappeared, they say, will never return.
“It puts us at risk,” said Robbie Robinson, president of Starfire Lumber in Cottage Grove, about 20 miles south of Eugene. Pyramids of Douglas fir rested outside his office window, no buyers to be found. “What I sense is another whole business being built, and the real problem is being able to harvest old trees.”
Forest economists say government spending, beginning with the stimulus package but also extending to any program to buy and sell carbon offsets, will be necessary to build a new economy in the rural Northwest.
Some supporters of sustainable forestry are concerned that, despite assurances by the Forest Service, the stimulus package will create only short-term jobs in the woods and miss the chance to invest in a complete “waste chain,” in which small timber and brush from thinning projects are put to use for lumber, biomass fuel and other purposes, potentially strengthening rural economies on many levels.
“We’re doing a lot of things here that nationally we say we want to do — biomass, fuels reduction, forest health, green jobs — we’re doing all of it now,” said Josh Anderson, the timber resource manager for Vaagen Brothers Lumber in Colville, Wash., which has worked with environmental groups to preserve wilderness land but has had to lay off about half of its 200 employees in recent months.
“We want to be here to be able to do that when things improve,” Mr. Anderson said. “We need to see something that moves a long-term trend toward work on these projects. It’s got to be pretty integrated.”
Mr. Walls, of the Lake County Resources Initiative, said a planned biomass energy plant in Lakeview, near the Nevada-California border, would generate 150 construction jobs, 50 to 75 permanent jobs in the forest and 15 at the plant. The plant would generate 13 megawatts of electricity, enough to power every home in the town of 2,300 and to contribute to the broader power grid.
But for the plant to operate, Mr. Walls said, it would need a steady flow of fuel, in the form of wood byproducts, from federal forest thinning and wildfire prevention, a pipeline that may or may not become permanent. The plant is seeking about $5 million in grant money under the stimulus package.
Mr. Walls said he was told by the Forest Service’s regional office in Portland that the project was a top prospect and that a decision was expected any day. He said its chances might have improved this month when Oregon’s governor, Theodore R. Kulongoski, appointed him to a committee to help oversee stimulus spending.
Even if the Lakeview project and others like it do fall into place, Mr.
Walls said, many other struggling timber towns still will need the demand for lumber to rebound. “In the end,” he said, “the housing market does have to turn back.”
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