Baltimore USDA 3 rd GHG Symposium.ppt 1 Carbon Sequestration: A Forest Products Company View Carbon Sequestration: A Forest Products Company View By : Robert S. Prolman Director, International Environmental Affairs Weyerhaeuser Company March 22, 2005 By : Robert S. Prolman Director, International Environmental Affairs Weyerhaeuser Company March 22, 2005 Presented to: USDA’s Third Symposium on Greenhouse Gases and Carbon Sequestration in Agriculture and Forestry Presented to: USDA’s Third Symposium on Greenhouse Gases and Carbon Sequestration in Agriculture and Forestry

Baltimore USDA 3 rd GHG Symposium.ppt 2 Uruguay Our view is global...as are the challenges Australia / New Zealand Mexico Ireland France Canada United States Nine operating countries Nine operating countries 2004 Brazil manufacturing acquisition 2004 Brazil manufacturing acquisition Forest assets in five countries (~35 million acres) Forest assets in five countries (~35 million acres) 300+ manufacturing facilities 300+ manufacturing facilities Self-generate 2/3s of energy from biomass Self-generate 2/3s of energy from biomass Transportation – trucks, ships, planes, rail Transportation – trucks, ships, planes, rail Products for housing, packaging, consumer products Products for housing, packaging, consumer products Nine operating countries Nine operating countries 2004 Brazil manufacturing acquisition 2004 Brazil manufacturing acquisition Forest assets in five countries (~35 million acres) Forest assets in five countries (~35 million acres) 300+ manufacturing facilities 300+ manufacturing facilities Self-generate 2/3s of energy from biomass Self-generate 2/3s of energy from biomass Transportation – trucks, ships, planes, rail Transportation – trucks, ships, planes, rail Products for housing, packaging, consumer products Products for housing, packaging, consumer products

Baltimore USDA 3 rd GHG Symposium.ppt 3 Forest and Forest Product Sequestration l Both elements make a significant contribution l Can be a major “bridge” over the next few decades until other mitigation options are more fully developed l CORRIM II study affirms the significant energy efficiency and GHG benefits from using wood products in home construction l Most “Kyoto” signatory countries are now recognizing and more open to embracing forest carbon sequestration

Baltimore USDA 3 rd GHG Symposium.ppt 4 Capturing the “Carbon Dividend”… l Key challenge: Improving our ability to reliably measure carbon stock changes cost effectively for different objectives Afforestation Afforestation Mine land reclamation Mine land reclamation Forest restoration Forest restoration Biomass energy Biomass energy Forest preservation Forest preservation Wood products Wood products Urban Forestry Urban Forestry Conservation zones within managed industrial forests Conservation zones within managed industrial forests Managed forest “carbon management units” Managed forest “carbon management units”

Baltimore USDA 3 rd GHG Symposium.ppt 5 Measurements must be more precise… l The reasons we need to improve our ability to measure carbon stock changes over time are more demanding than in the past l Forest carbon is becoming an “asset” that must be managed with respect to both liabilities and equity values External reporting of year-to-year changes External reporting of year-to-year changes Annual improvement increments more narrow than uncertainty bands Annual improvement increments more narrow than uncertainty bands Third party verification of total stocks and annual stock changes to support GHG credit trading objectives Third party verification of total stocks and annual stock changes to support GHG credit trading objectives Management of the liabilities associated with carbon stock losses in a trading program Management of the liabilities associated with carbon stock losses in a trading program The need to track forestland acquisitions, divestitures, use changes (LULUCF) The need to track forestland acquisitions, divestitures, use changes (LULUCF) Reduce the costs of accurate measurement on large tracts Reduce the costs of accurate measurement on large tracts Support of dual valuation models: timber and/or carbon yield opportunities Support of dual valuation models: timber and/or carbon yield opportunities

Baltimore USDA 3 rd GHG Symposium.ppt 6 What we need… l Significant expansion of the forest carbon data base, across types, regimes, age classes, management practices l The impossible: more accurate AND more cost-effective measurement methodologies l The ability to accurately measure all forest carbon sub-pools Stem/bole, crown, root, soil, DOM/litter Stem/bole, crown, root, soil, DOM/litter l National and international policies that recognize the total contribution that forest and forest products can make to the climate agenda: “Symmetry Principle” - all forest lands should be eligible to be included in assessments of emissions and reductions through sequestration “Symmetry Principle” - all forest lands should be eligible to be included in assessments of emissions and reductions through sequestration

Baltimore USDA 3 rd GHG Symposium.ppt 7 Bob Prolman Director International Environmental Affairs Weyerhaeuser Company