Insert Your Image Here © Insert Image Credit Josh Parrish – Director, TNC Working Woodlands Program Gay Thistle – Private Forest Owner Bill Kunze – Executive Director, TNC-Pennsylvania Forest Carbon: Opportunities and Challenges

Today’s Discussion What is forest carbon? What markets exists? TNC’s “Working Woodlands” Program Increasing landowner access, scaling up

What is Forest Carbon?

Forest carbon = carbon removed from the atmosphere through photosynthesis and stored in forests What is Forest Carbon?

Carbon offset = the avoided emission, or sequestering, of carbon dioxide in order to compensate for the emission of the same amount elsewhere What is Forest Carbon?

When companies or people buy forest carbon offsets they’re paying for forest conservation / management that avoids releasing, or that sequesters, carbon dioxide What is Forest Carbon?

Large and Growing Markets for Offsets  In 2014, companies and governments paid $275M to forest landowners for conservation and management projects that reduced emissions reductions or sequestered carbon  More businesses purchasing offsets to satisfy corporate social responsibility goals  Likely growth in purchases of offsets to meet regulatory requirements Carbon Markets

Voluntary Markets  Verified Carbon Standard  American Carbon Registry  Climate Action Reserve Compliance Markets  California AB32 (ARB)  Regional Greenhouse Gas Initiative (RGGI) Carbon Markets

Three types of forest carbon projects Afforestation/Reforestation Avoided Conversion Improved Forest Management (IFM) IFM projects Improved from a carbon accounting standpoint – i.e., the project will sequester more carbon than “business as usual” or “common practice” Carbon Markets

Working Woodlands Our Goal  Accelerate large-scale forest protection and ecological management by offering new value proposition to landowners Three Elements  Forest Protection (conservation easement or other agreement)  Certified Forest Management (FSC)  New Revenue Stream from sale of carbon offsets

Working Woodlands How it Works In exchange for a long-term conservation agreement, TNC provides landowner with:  High quality forest inventory and plan  FSC certification under TNC group certificate  Access to highest quality markets for carbon offsets  Ongoing technical support from TNC forest management experts  Potential tax benefits

Working Woodlands Carbon Accounting Process  Choose a carbon protocol (compliance or voluntary)  Inventory carbon stocks (FSC certification accomplished at same time)  Model projected future growth

Working Woodlands

Carbon Accounting Process  Establish “Baseline” – must be approved by regional forestry specialist, often requires supporting documentation (e.g., records of timber sales, proof of access to mills, etc.)  Draft project documentation and conduct carbon calculations  3rd party verifier audits project  Submit verified documentation to carbon registry  Credits issued and delivered to buyer

Bethlehem Authority 22,387 acres in Northeast PA (largest private conservation agreement in PA history) Bethlehem Authority 22,387 acres in Northeast PA (largest private conservation agreement in PA history) 17 Working Woodlands

Additional Projects  Lock Haven City Authority (5246 acres)  Hiawatha Hunting & Fishing Club (1352 Acres)  Capital Region Water (8239 acres)  Other projects in TN, NY TNC has already facilitated over $4M in sales of carbon offsets for PA landowners; working on projects likely to generate another $20M in sales.

Increasing Access, Scaling Up The Challenge For more PA landowners to participate in forest carbon markets, smaller landowners need convenient and affordable access to:  Forest management plans & certification that meets third-party standards  Carbon modeling services  Carbon marketing services

Increasing Access, Scaling Up The Challenge To do this affordably and at scale, can we create a way for smaller landowners to get together to:  Improve management of their parcels under shared management plans, and  Pool their carbon potential in order to sell offsets?

Increasing Access, Scaling Up The Opportunity Landowners with access to a revenue stream from carbon markets would have a direct financial incentive for active, professional, and long- term management of their woodlands, including sustainable harvesting, improving both the health and the economics of Pennsylvania forests – and addressing some of the key challenges of this Taskforce.

Questions and Discussion