By Elizabeth Graves
Published in STORY - September 2012

On a beautiful fall day in October 2009, a group of Kentuckians gathered beneath towering hardwood trees outside Berea, Ky., to celebrate a milestone. Together, these people represented a set of innovators, committed to improving private forestland for healthier trees and wildlife habitat, and better water and timber supply. Most notably, in a new and very modern twist, these forward-thinking individuals were also committed to leveraging the forests’ ability to store carbon dioxide. Officials from the Kentucky Division of Forestry, professors from the University of Kentucky Forestry Department, staff from the nonprofit Mountain Association for Community Economic Development (MACED), and private forest landowners, among others, were gathered to celebrate the first revenue generated from Appalachian Forest Offsets. The landowners receiving checks worth thousands of dollars that autumn day included Jack Stickney from Estill County. Stickney had contractually agreed with MACED, in 2007, to attain forest management certification under the American Tree Farm system (or another approved certification system). In exchange, MACED agreed to verify the additional, new carbon stored in Stickney’s trees, aggregate his carbon reductions by the ton and sell the carbon offsets on behalf of Stickney and other landowners who enrolled. The theory behind it all went like this: By committing to forest certification, periodic forest inventory, annual reporting and a long-term contract, landowners would help ensure natural forests were storing more carbon than they would without management. Healthier forests would also mean better timber for making higher quality wood products.

The entire project was part of a much larger effort by many governments and organizations to reduce carbon dioxide while also having a positive social impact on local communities. The groundbreaking relationship between private, nonindustrial forest landowners and MACED is at the heart of the Appalachian Carbon Partnership, a project that extends throughout Appalachian counties in Kentucky, Ohio, Virginia, Tennessee and West Virginia. The partnership’s goal is to improve the state of private Appalachian forestland by helping landowners access global exchanges where offsets are bought and sold. “Right away I thought the partnership was a great idea, mainly to get people to manage their woodlands sustainably,” said Stickney. “If there is a chance it will work, I am all about trying it. More management means more woodlands people at work, such as loggers and bandsaw operators. It also means better forests for wildlife, water and air quality.”

David Jackson, a MACED employee in the mid-2000s, first thought that linking Appalachian forests with the emerging carbon offset market might work. For years, he and many others had been searching for strategies that could bring long-term health to Kentucky’s declining forests and rejuvenate the jobs associated with forestry and the wood products industry. MACED had been working on strengthening communities in eastern Kentucky for more than 30 years at that point, and forestry had always been a key piece of the puzzle. Kentucky has vast forestland, some publicly owned, some industrially owned and some privately owned by landowners who love their woods and want to see them flourish. Of the latter, some are land rich and cash poor. Many need a proven revenue generator from the forest to justify investing in good land management. They have trouble paying the annual property taxes on their land and are often faced with having to sell to developers or cut more timber than is ideal for the long-term value of the forest. In fact, a 2011 University of Kentucky Department of Forestry tax assessment project revealed “that woodland owners are typically taxed on assessed values between $100 and $500 per acre, but the actual current-use values range from $17 to $60 per acre.” That discrepancy, between assessed value and actual current-use value, reveals the bind many private forest landowners face.

By the mid-2000s, many leaders in the forestry and economic development communities saw Kentucky’s forests as a tremendous asset that was vastly underachieving. Yet, thanks to growing global concern about climate change, scientists and foresters around the world were increasingly interested in how to put a monetary value on the very process trees use to grow. Trees take in carbon dioxide (CO2) and release oxygen as part of the carbon cycle. Vast forests are the planet’s lungs, as some forest conservation advocates have explained, and preserving them for the work they do is critical to our planet’s ability to handle rising levels of CO2. Forest carbon offsets stem from this thinking, and the first voluntary market open to trading these offsets in America was the Chicago Climate Exchange. MACED sensed an opportunity to become an aggregator of offsets and help landowners participate in this growing market.

MACED conceived that if ordinary Kentuckians, who owned enough acres to make it economical (about 80), could get help from consulting foresters on controlling invasive species and improving timber stands, these small forests could sequester more carbon and generate carbon offset revenue. Landowners could then use that money to invest in additional, ongoing professional forest management. Co-benefits would include work for foresters, better water quality and enhanced habitat for rare plants and wildlife. As acreage went under management and more landowners became familiar with the best ways to manage their land through certification systems, Kentucky’s forests would begin to recover from decades of scarce forest management. Trees from that acreage could in turn become a supply of certified wood available to Kentucky’s saw mills, cabinetry makers, carpenters and architects. In theory, an architect building a LEED-certified building anywhere in Kentucky would eventually be able to source Kentucky hardwood that was certified as sustainably grown and harvested right here in the state. This would keep jobs and income within the state. At a global level, all of this activity, as recognized in the mid-2000s by the Chicago Climate Exchange, would empower small acreage forest landowners to be frontline observers watching for changes in the woods as they helped to lessen the impact of global warming.

It wasn’t easy, but with initial funding from a small group of private foundations, MACED made a start. There were risks to be sure. It was, after all, a voluntary market that the program would depend upon to sell their offsets. At that time, as today, no one was required to lower emissions or buy offsets. But increasingly, organizations were doing so to back up their claims of going green and being socially responsible. The initial thinking on how Kentuckians could leverage the carbon markets toward better forest management would become known, in 2009, as the Appalachian Carbon Partnership. After Jackson returned to Oregon in August 2007, program management became the focus of Scott Shouse, a forester originally from Crittenden County who joined MACED. Methodologies were written to meet offset exchange requirements. Nonprofit partners in Ohio and Virginia were recruited to help landowners in those states learn about the program. Consulting foresters were trained and audits and verifications were completed. Vintages of carbon began to accumulate. The first of these pools was later sold on behalf of landowners like Jack Stickney and others celebrating on that sunny autumn day in 2009.

Today, the landowners enrolled in the Appalachian Carbon Partnership continue to manage their woods to increase the health and growth of trees, enhance water quality, reduce erosion and protect Kentucky’s richly diverse flora and fauna. Forty-eight land tracts, totaling a combined 28,000 acres, are enrolled. Six landowners are women. Many more forest owners have indicated an interest in enrolling. More than $120,000 has been paid out to participants. As one landowner, whose family has been on the same wooded acreage in Lawrence County for almost 200 years, says, “Participating in the partnership gives me an alternative to intensive logging. I have an incentive to maintain and manage my forest in a sustainable way.” Buyers of Appalachian Forest Offsets include a national print communications company, a private aviation company, private foundations, churches and individuals, including many Kentuckians. Purchases of offsets are actually donations to the nonprofit MACED and are tax-deductible. MACED pays out money to landowners in sequence of their enrollment date. When asked what appeals about these offsets, versus those offered by projects around the globe, one buyer explained,”Our donations positively impact family forests and economically distressed, rural communities right here in America.”

What could be better?