Climate Policy Mechanisms

NAFO Encourages Policymakers To Consider How The Following Common Policy Mechanisms Can Impact Private Working Forests.

NAFO does not endorse any one mechanism.*


CARBON INCENTIVES

POLICY POSITION:

If climate policy includes direct incentives or investments, NAFO encourages voluntary approaches that are market-based, create a level playing field, encourage participation of all forest owners, support existing forest practices, and focus incentives on carbon benefits. Specifically, policies should:

  • Recognize the carbon benefits of the forest products supply chain, such as the carbon stored in long-lived wood products, to determine overall mitigation benefits.
  • Take advantage of and encourage existing forest management practices.
  • Provide all materials, including wood, an equal chance to compete in the marketplace.

MITIGATION

POLICY POSITION:

NAFO supports the use of forests to mitigate the effects of climate change, through credits or offsets for carbon emissions. An effective mitigation program should:

  • Be market-based and designed to achieve real mitigation benefit.
  • Consider impacts on the entire forestry value chain, with specific attention to impacts on loggers and haulers and log availability for manufacturers.
  • Avoid the checkerboard resulting from multiple state or regional programs.
  • Avoid the imposition of new mandatory land management regulations (required co-benefits) that overlay existing state forest practices.
  • Recognize sustainable forest management as a means to achieve additionality.
  • Recognize the overall carbon benefits from the forest and forest products in the following ways:
    • Forest management requirements are consistent with existing practices in the state where the forested tract of land or stand is located.
    • Verification focuses on the stand, not the individual trees.
    • Baselines use reference points and data rather than uncertain models and speculation on anticipated future activity.
    • Scale requirements allow aggregation by smaller forest owners and stand selection by larger ones.
    • Permanence requirements are based on the carbon stock, not the specific forested acres, allowing boundary adjustment and avoiding the imposition of leakage responsibilities outside of the control of the forest owner, such as indirect land use change or loss from natural disturbance.
    • There is recognition of carbon storage in long-lived wood products.
  • Ensure that income recognized by REITs from the receipt of carbon credits would be qualifying REIT income under REIT income tests.

CARBON TAX

POLICY POSITION:

Under a carbon tax, rebates and credits should recognize the full contributions of the forestry sector, specifically:

  • Given the climate positive benefits of the entire forest sector, forest management and forest product manufacturing should not be taxed. Additional costs applied to the forest sector act as a disincentive for maintaining working forests.
  • The system should provide a credit/deduction for carbon beneficial activities, such as forest management and carbon stored in wood products. If a carbon tax includes offsets, NAFO’s support is contingent on the caveats outlined in “forestry offsets” above.

REVENUE ALLOCATION

POLICY POSITION:

Should revenue be generated through a policy mechanism of any kind, NAFO supports the use of carbon revenue to make investments in sustainable forest management and to offset the costs of a cap or tax within the forestry sector value chain.


REGULATIONS & MANDATES

POLICY POSITION:

NAFO does not support the imposition, by regulation, directive, or legislation, of mandatory requirements that will, directly or indirectly, constrain forest management on private forest land. Mandates could include things such as imposing federal or state limits on forest conversion (no net loss), requiring third-party certification, requiring minimum rotation ages, or establishing mandatory forest management practices. Such mandates either directly take value from the private forest owner or impose costly practices that effectively reduce land value and associated carbon benefits. Increased costs may result in lost markets and the ability to effectively manage forestlands. An economically viable forest products economy is critical to maintaining forestlands, an important tool in climate mitigation.


TIMBER TAKES BETWEEN 25 AND 100 YEARS TO MATURE

*final harvest ranges by tree species and region, based on average rotations