BACKGROUND INFORMATION
California’s Forests
Forests in California have been subject to changing climate conditions and insufficient management. Together this has reduced overall forest health and resulted in a decrease in forest carbon sequestration. A record-setting drought between 2012 and 2016 dried out thousands of acres of forest across the State. These drought addled forests have become more susceptible to insects and disease. Additionally, over a century of fire suppression has resulted in increased stand density, which has further contributed to a sharp increase in tree mortality. Both of these factors have played a role in increased wildfire severity and intensity throughout the State. In 2018 alone, California wildfires burned almost 2 million acres and caused $3.5 billion of damage, making the 2018 fire season the most destructive on record. A potential solution to increasing forest health and carbon sequestration is through the widespread implementation of forest thinning projects that facilitate long-term, forest stand carbon storage. However, this type of forest management is often too expensive for most land managers to implement. The State's recent pledge of carbon neutrality by 2045, however, may provide a policy framework to incentive land managers to pursue carbon maximizing forest thinning. |
Carbon Neutrality by 2045
In September of 2018, Governor Jerry Brown signed Executive Order B-55-18, which sets a goal of statewide carbon neutrality by 2045. Among numerous proposed actions, the Executive Order cites the utilization of California’s forested land to increase statewide carbon sequestration. With this Executive Order, relevant State agencies will be able to generate policies that incentivize management practices which increase forest stand carbon storage. |
A Marginal Cost Curve for Forest Carbon
Before any policies can be drafted and implemented, the cost of increasing carbon storage in a forest stand needs to be calculated. Different forest thinning options result in a range of long-term forest carbon storage outcomes including reduced wildfire carbon emissions. Additionally, forest management options vary in their cost, amount of wood and wood products generated as a result of thinning.
By calculating the potential costs of a management option as well as the resulting flow of carbon, we can create a marginal cost curve that identifies the dollar amount it will cost to increase carbon storage in an area of forested land compared to a baseline of existing forest management practices.
Before any policies can be drafted and implemented, the cost of increasing carbon storage in a forest stand needs to be calculated. Different forest thinning options result in a range of long-term forest carbon storage outcomes including reduced wildfire carbon emissions. Additionally, forest management options vary in their cost, amount of wood and wood products generated as a result of thinning.
By calculating the potential costs of a management option as well as the resulting flow of carbon, we can create a marginal cost curve that identifies the dollar amount it will cost to increase carbon storage in an area of forested land compared to a baseline of existing forest management practices.
PROJECT OBJECTIVES
Our project aims to assess how forest management can cost-effectively contribute to Executive Order B-55-18, California’s pledge to be carbon-neutral by 2045.
Objective 1: Develop a tool to inform policymakers of cost-effective forest management practices that also prioritizes carbon sequestration.
Objective 2: Using this tool, identify potential policies to incentivize cost-effective forest management for carbon sequestration to support carbon neutrality.
Objective 1: Develop a tool to inform policymakers of cost-effective forest management practices that also prioritizes carbon sequestration.
Objective 2: Using this tool, identify potential policies to incentivize cost-effective forest management for carbon sequestration to support carbon neutrality.
PROJECT APPROACH
To create our marginal cost curves (MCC), we used the U.S. Forest Service Biosum model, which simulates the effects of management practices on the the growth of forest land over time. For our project, we estimated the costs of applying 31 different treatments to over 2,000, 5,000 acre plots across California. We then applied a 5% discount rate to determine the present value of costs and carbon implications of each treatment over 30 years. The four steps to create our marginal cost curve are summarized below.
- We determined costs of each treatment for a given forest plot by summing costs from harvesting, transportation and permitting.
- The 31 treatments were applied to each plot to determine its total cost and carbon implications.
- We subtracted a baseline reference point representative of current management from each modeled result. We used two baselines: (1) Business as Usual (BAU) baseline, and (2) Assumed Management baseline based on the California Air Resources Board (CARB) method of granting forest carbon offsets.
- We selected the treatment for each plot that yielded the lowest per-unit carbon costs for our MCC. If no treatments for a plot yielded an increase in carbon relative to the baseline, that plot was not selected. We then arranged the treatments in order of their cost ($/ton) to generate the MCC.
MAIN FINDINGS AND POLICY IMPLICATIONS
Baseline Matters - Scenarios relative to a CARB baseline stored more carbon at a lower cost than scenarios relative to a BAU baseline.
Grow-only management stores the most carbon - Grow-only imposes the least management costs to store the most carbon.
Overall, our findings indicate that forest management may be a costly abatement strategy. Additional carbon storage through forest management contributes a relatively small amount given a statewide goal to store 15.5 million tons of carbon through forest management per year by 2045. Additionally, our findings show that management assumptions are important. The baseline amount of forest carbon that the State chooses is critical to evaluate how much additional carbon a treatment could store.
Given these results and our evaluation of California's existing carbon offset program and federal conservation incentive programs, we suggest the following forest carbon policy changes be considered by the State.
Given these results and our evaluation of California's existing carbon offset program and federal conservation incentive programs, we suggest the following forest carbon policy changes be considered by the State.