Just think about forests and carbon markets...

How much pollution can a tree absorb? The question is at the center of a high-stakes fight over how much it will cost to curb climate change -- and who will foot the bill.

Trees are nature's antidote to smokestacks and tailpipes. Factories and cars cough out carbon dioxide, a greenhouse gas produced when fossil fuel is burned. Trees inhale it. They store the carbon in their roots, trunks and leaves, and they send the oxygen back into the air.

But when a tree is destroyed, its carbon wafts back up into the atmosphere. Globally, according to the United Nations, nearly 20% of man-made greenhouse-gas emissions come from deforestation: trees cut and burned by humans, or mowed down by forest fire, or rotted away by disease. That is more carbon dioxide than comes from all the world's cars, trucks, planes, trains and ships, combined.

Now, some of the world's biggest polluters are turning into tree-huggers. Facing impending government orders to help curb climate change, energy-intensive companies argue that if they help prevent a forest from being destroyed, they will be keeping carbon dioxide out of the air. So they are proposing that they pay forest owners to keep their trees alive, and in exchange they receive carbon credits that reduce their obligation to make costlier emission cuts at their own factories. In short, they want to harness photosynthesis for the benefit of their bottom line.

It is relatively easy to measure how much carbon dioxide trees soak up. But there are major questions about claiming an existing forest as environmental cover for, say, building a new coal-burning power plant or producing a fleet of SUVs.

These quandaries are popping up wherever there are sizable woods -- from developing countries with vast tropical rainforests, like Brazil and Indonesia, to sylvan spots like the ski-resort town of Truckee, near Lake Tahoe in California's Sierra Nevada mountains.

Preserving forests is just one tactic raising concern that the campaign against climate change is being gamed. Landfills across the U.S. are selling carbon credits -- essentially rights to pollute -- in exchange for capturing a greenhouse gas produced by their rotting trash, even though many landfills installed the gas-capture systems years ago.

You've got all these folks lined up around the idea that we want to generate as many of these credits as possible so we can continue to pretend that regulating emissions is going to be cheap and easy," says David Victor, a professor of international relations at the University of California, San Diego, who has studied the carbon market. In fact, he says, climate change "is a serious problem, and it requires us to spend serious resources. Right now, no one is willing to do that."

Carbon credits should have strong environmental safeguards, says Bruce Braine, a vice president for American Electric Power Co. of Columbus, Ohio. The utility is a member of a consortium of big greenhouse-gas emitters and environmentalists advocating the use of carbon credits for forests in developing countries, where much of the debate over pollution is likely to play out. But he adds: "If you try to get it to absolutely perfect environmental integrity, you will never get anything done."

One issue is how to prove a tree really would have been cut down were it not for the sale of a carbon credit. If the tree would have remained standing, then any carbon credit attributed to it wouldn't be providing a new environmental benefit, even though its buyer would be able to put more carbon dioxide into the air.

Another question is how to ensure that a tree that spawns carbon credits isn't later destroyed anyway. If a tree claimed as a source of carbon credits were cut down even a few decades later, then the carbon credits it had produced would be environmentally worthless.

In Truckee, many people who own vacation houses arrive by private plane at the town's small airport. Along the aerial approach sits a 1,500-acre forest filled with Jeffrey and Ponderosa pines. After a developer proposed building houses there, the airport district joined with governmental agencies and environmental groups two years ago to buy the forest, and signed a pledge never to develop the land.

The goal, says David Gotschall, the airport's general manager, had nothing to do with fighting climate change. It was to avoid a wave of new homeowners who might gripe about airplane noise.

Coincidentally, though, predictions were mounting that the U.S. government soon would regulate greenhouse-gas emissions and would let companies comply in part by buying carbon credits from trees. To encourage companies to start preparing for the regulations, environmentally aggressive California was setting up a market to promote a voluntary carbon-credit trade.

Figuring that market might provide some extra cash, the airport's managers began the process of getting the Truckee forest sanctioned as a source of carbon credits that could be sold to companies seeking to offset their pollution.

Last year, the airport hired a forester to measure how much carbon dioxide the woods had stored up. Under the carbon market's rules, forest owners get credits only for protecting the portion of a forest they can claim would have been destroyed. The airport estimates that preserving the forest instead of cutting down trees and building houses will keep about 226,000 metric tons of carbon dioxide out of the atmosphere over 100 years. That is the number of carbon credits the airport has proposed selling.

What is much harder to calculate is whether awarding carbon credits for the forest helps combat climate change.

For one, the airport would have bought and preserved the land even without the revenue from carbon credits, says Mr. Gotschall.

Also, it isn't certain that the developer actually would have built houses in the forest if the airport hadn't bought and preserved the land. Not long after the airport took ownership of the forest, the economy tanked, bringing a lot of new home construction to a halt.

And even if the developers had decided to go ahead with building the homes, it isn't clear how much of the forest would have been chopped down.

"This whole industry is a lot of could-be's and what-if's," Hardy Bullock, the airport official in charge of the details, said on a recent morning.

Answers to the what-if's will depend on what the government decides to do about greenhouse-gas emissions. Could an airport -- even one that owns a forest -- be held liable for the carbon dioxide emitted by the planes landing and taking off there? "I'll wait for Washington to answer that one," Mr. Gotschall says in the airport's terminal, a few minutes after a Gulfstream G5 jet takes off outside. A G5 burns 2,322 pounds of fuel, emitting about 3.3 tons of carbon dioxide, in an hour of typical flying. Compensating for that requires protecting about 740 square feet of Truckee forest from the buzz saw for a century.

Copyright:

Issued by:  The Wallstreet Journal

Author: Jeffrey Ball

e-Mail: powershift@wsj.com.

Issue date: July 24, 2009

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