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  • Published: Oct 31st, 2008
  • Category: USA
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Carbon trades offer new cashflow

The head of the Oregon Small Woodlands Association has resigned his position to venture down a new road, but he’s not leaving family foresters in the dust.

In fact, former executive director Mike Gaudern has taken over as CEO of OSWA’s recently-launched subsidiary, the Woodlands Carbon Co., which aims to earn money for woodland owners throughout the West by battling climate change.

“It’s becoming more and more apparent that forestry has a role to play,” said Gaudern.

OSWA initially hired Gaudern seven years ago, when he immediately impressed members with his “go-getter” attitude and knowledge of forestry, said Ken Faulk, president of the group’s executive committee.

“When he came in for the interview, he blew our socks off,” Faulk said.

Upon starting the job, Gaudern immediately got to work raising the organization’s profile, he said.

Before, the group was often left out of key government decisions pertaining to forestry, simply because policy makers weren’t aware of it, Faulk said. Now, woodland owners are regularly offered a seat at the table, he said.

“We’ve come a long way,” Faulk said.

Gaudern was also instrumental with providing OSWA with direction, developing policy and action plans that set forth clear positions and goals, he said.

“We really didn’t have something like that written down,” Faulk said.

The idea to enter the carbon credit market had been brewing for quite a while, as public discourse increasingly turned to climate change and “ecosystem services,” said Gaudern.

The group worked with state and national partners to get forestry recognized as a “carbon sink,” since trees absorb carbon from the atmosphere, he said.

According to rules developed with the Chicago Climate Exchange, woodland owners can earn credits based on the number of tons of carbon sequestered by their trees each year, Gaudern said.

Those credits can then be sold over the exchange or to private firms, he said.

The Woodlands Carbon Co. opens up that market to individual woodland owners by providing them with loans to monitor tree growth, thereby determining how much carbon is sequestered over time.

The company was launched last month thanks to a $670,000 grant from the American Forest Foundation that will fund it for the first three years. Afterwards, the firm will need to sustain itself with commissions from selling carbon credits.

Carbon prices have plunged to about $1.20 per ton from their most recent high of nearly $7.50 in June, according to the Chicago Climate Exchange.

The price peaked after it became apparent all three prospective presidential candidates at that time – Sens. John McCain, Hillary Clinton and Barack Obama – were supportive of climate change legislation, Gaudern said.

It has since returned to early-2008 levels, Gaudern said.

Nonetheless, Gaudern is confident that the price will eventually stabilize, as it has in Europe, and provide forest owners with the means to offset management costs.

“The point is that you have a diverse revenue from the land,” he said.

Gaudern acknowledged that stepping down as executive director of OSWA to take on this new challenge is a personal risk.

However, the risk to family woodland owners is minimal, and the mechanism may provide them with incentives to avoid land conversion – a major threat to private U.S. forests, he said.

“To lose 1.5 million acres a year is more of a risk than what we do with carbon,” Gaudern said. “The risk of doing nothing outweighs the risk of doing this.”

As part of the system devised by Gaudern, family foresters will not have to forgo harvesting their wood in order to earn money from carbon credits.

Twenty percent of the carbon tons they accumulate will be kept in reserve instead of being sold as credits. That will form a “buffer” against damage from fires, pests and disease.

Once it’s time to harvest, however, woodland owners can cash in on the remaining buffer, said Gaudern.

“We’re here to make money for good forest management,” he said.

By Mateusz Perkowski

Sourced From Capital Press

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