In fight against climate change, financial markets see Oregon's green

No man-made machine on Earth can better capture planet-warming carbon dioxide from our atmosphere than a healthy forest.

And the most effective carbon-storing forests in the world are the wet, dense, giant conifer forests of the Northwest. The forests in Oregon’s Coast Range absorb and store more carbon per acre than almost any other forests in the world – including the Amazon Rainforest.

For more than a century, these forests have been heavily logged, supporting a vast timber industry worth billions of dollars. But, companies behind a new and growing market force are hoping to bank on the money-making potential of Oregon forests that are left intact, doing what they’ve always done: absorb and store carbon in their bark, tissue, leaves and needles and in the soil beneath them. In doing so, they help combat the growing threat of climate change.

New carbon crediting markets are betting on a future where they can make money on Oregon’s forests without cutting them down, and instead, based on the carbon they store. Dozens of companies have sprouted up to broker agreements with public, private and tribal landowners to preserve forests by selling credits to polluting industries that have to, or want to, show they are offsetting their own carbon dioxide emissions driving climate change.

The Capital Chronicle spent months investigating the potential for Oregon forests to play a larger role not only in the growth of emerging, multi-billion-dollar carbon crediting markets, but also in a global and collaborative fight against climate change. The investigation included interviews with dozens of forest managers, carbon credit brokers, scientists, market experts and critics along with multiple visits to forests across Oregon and Washington to see the projects on the ground.

In Oregon, two dozen projects encompassing more than 1.3 million acres of forest are listed in the American Carbon Registry, the first voluntary greenhouse gas registry in the world that monitors projects and issues carbon credits. These forests have all been added to the registry in just the last 10 years, and 20 of those projects were added in just the last four years.

They have, according to dense and often voluminous paperwork, generated more than 6.5 million carbon credits so far – equal to pulling at least 6.5 million additional metric tons of carbon dioxide from the atmosphere – by remaining intact and growing older, bigger and healthier. The credits linked to those benefits have been sold to polluting companies that have paid millions of dollars in exchange for permission to say they have – by supporting those projects – offset or reduced their own carbon dioxide pollution.

Reducing global carbon dioxide emissions, and making money along the way, is a priority not just for individual landowners and polluting industries, but also for state, federal and tribal governments. Oregon’s Gov. Tina Kotek and her peers in 17 other Western states consider using forests as emission storage powerhouses as a key strategy for tackling climate change, laying out their ideas in a recent proposal to “decarbonize the West.”

The report recognized the urgency of curtailing greenhouse gases to fight climate change. The overwhelming consensus among climate scientists is that to stop the worst possible outcomes from climate change, we must keep the average global temperature from rising more than 2.7 degrees Fahrenheit from preindustrial times. The planet has already seen a 2 degree rise since the 1850s. To limit a further temperature rise, experts say humans will need to largely stop burning fossil fuels and reach “net-zero” emissions by 2050, meaning no more carbon dioxide would be released into the atmosphere than would be taken out.

We cannot lower our emissions and slow the worst effects of climate change without protecting what’s left of our forests. Trillions of trees and their soils around the world each year absorb, on average, between one-quarter and one-third of all human caused carbon dioxide pollution, according to NASA.

But trees and forests alone will not solve the emission problems humans have created, scientists say. There are not enough forests on Earth to absorb and store all of the excess carbon dioxide humans are responsible for, and planting a bunch of new trees to counterbalance this would be akin to bailing out a flooded basement with rolls of paper towels.

Climate scientists and policy experts have said for decades that the only way to protect the health of the planet and our future is to reduce the amount of carbon dioxide we send up into the atmosphere every day.

This is among the reasons that governments in more than 140 countries, including the U.S., as well as 23 state governments, have passed legislation setting greenhouse gas emission reduction targets. In Oregon, the state has set a goal of reducing emissions 90% from pre-1990s levels by 2050.

Forests can be a tool. And the effectiveness and integrity of this tool is being tested in carbon markets being built right now.

There are two market models for creating, selling and buying carbon credits. One is a compliance market, which is regulated by a government and created to help polluters comply with legally mandated carbon emissions caps. Companies can buy down some portion of their required emissions reduction each year by purchasing carbon credits, with 1 metric ton of carbon dioxide equal to one credit.

The other market is voluntary, and is regulated by nonprofits and private companies. Voluntary markets exist for companies that want to buy carbon credits not because they must, but because they want to show that they are trying to reduce the impact of their pollution. What both markets do, in essence, is put a price on carbon dioxide pollution and ask polluters to pay for it.

The carbon credits used to offset that pollution are generated by landowners, companies, nonprofits and other entities that are undertaking work to reduce the amount of carbon dioxide in the atmosphere. This includes groups restoring wetlands, companies plugging orphaned oil wells and landowners improving the management and conservation of their forests. Polluters cannot buy the power of existing forests: They can only buy credits for those that are improved or grown to capture and store more carbon dioxide from the atmosphere.

In the compliance market, forest landowners have to agree that for at least 100 years they will manage their forest to collect additional carbon dioxide – more than the forest would store without intervention. In the voluntary market, owners have to agree to improved forest management plans of at least 40 years.

This management creates – by reducing logging, letting trees get older before they’re logged or planting more trees – what is called “additionality.” To enter a carbon market, a forest owner has to prove that each additional metric ton of carbon dioxide projected to be removed and stored in the trees would not have happened without the financial incentive of the market.

The largest compliance market in the U.S. is run by the state of California. Most Oregon forest carbon projects are registered in this market, but a growing number are turning to the voluntary market. The average price paid to landowners per credit in California’s market in 2023 was about $33. The average credit price paid to landowners in voluntary markets worldwide in 2023 was about $6.50.

Reporting for this project was supported by the MIT Environmental Solutions Journalism Fellowship.