Anderson-based SPI sets aside 60,000 acres as forest carbon offset bank

Anderson-based Sierra Pacific Industries announced Thursday, Oct. 1, that it will set aside 60,000 acres of Giant Sequoias in perpetuity in exchange for 1.5 million tons of forest carbon offset credits -- equivalent to taking 300,000 cars off the road for a year.

When verified and registered, the nation's single largest pre-compliance forest carbon transaction to date will be available for carbon offsets from polluters who comply with Assembly Bill 32 and other climate change cap and trade programs or requirements, noted Mark Pawlicki, director of government affairs for SPI.

The land and resource bank will be co-managed by Equator, LLC, and New Forests, Inc., partners in a carbon banking and investment company called Eco Products Fund, LP.

About 17,000 of the acres to be set aside are located in Shasta County, Pawlicki said, however most of the Giant Sequoias are in Tuolomne County, not along the coast.

"We don't expect any change to revenues to local governments," he added.

"We pay yield taxes when we harvest, and that format won't change. Overall, we will be harvesting a similar amount since trees on the 60,000 acres can be harvested," Pawlicki explained.

"Under the protocol, we need to make sure that we are always maintaining or increasing the stocking level on the total acreage of the project. That means we can harvest, but other lands need to be growing more to offset the harvest."

Mark Emmerson, SPI's chief financial officer, said the project "demonstrates the utility of California's new forestry protocol and recognizes the value of working forests in meeting the state's climate change goals and ecosystem sustainability."

According to the Los Angeles Times, at current prices, the carbon offsets could be worth at least $10 million to SPI.

California Governor Arnold Schwarzennegger also issued a press statement praising the creation of the nation's largest carbon sequestration project.

"Last week, California adopted important accounting rules for capturing carbon through improved forestry practices. This week, Sierra Pacific is using those rules to sequester more than 1 million tons of carbon dioxide. This agreement . . . will help people around the world reduce the 20 percent of global warming emissions that come from deforestation," Schwarzennegger said.

SPI's announcement follows the California Air Resources Board's adoption on Sept. 24 of the Forest Project Protocol 3.0, a set of guidelines that established accounting rules for determining the climate benefits of forest carbon sequestration projects.

Under the agreement, Equator, LLC, will purchase carbon dioxide equivalent offsets from SPI.

In addition to protecting nearly 20,000 Giant Sequoias in the first of four project areas in the Sierra mountain range, the same land will provide ideal habitat for the rare Pacific Fisher, which will be reintroduced on part of the project lands in cooperation with the California Department of Fish and Game, Pawlicki said.

"Elements of this transaction are unique to California. The first project in the series will be designed to protect the genetic diversity and integrity of Giant Sequoia trees helping to expand its range as an adaptation strategy in the face of climate change," Pawlicki said.

Giant Sequoias were chosen in large part for their enormous potential to sequester carbon dioxide, he added.

William Libby, professor emeritus of forestry and genetics at the University of California Berkeley, noted that the agreement should provide broad ecosystem benefits.

"I am encouraged to see that these firms have joined together in partnership to proactively conserve Giant Sequoias and enhance habitat for wildlife," Libby said.

"This should stimulate the development of forest-based carbon projects in advance of the implementation of a California or U.S. carbon trading market," added David Brand, managing director of New Forests, Inc.

Each project will be submitted to the Climate Action Reserve for registration in the reserve's recently-enacted protocol. The Climate Action Reserve is a national offsets program designed to ensure integrity, transparency and financial value in the U.S. carbon market.

The protocol was approved Sept. 1 by the Climate Action Reserve.