Understanding family forest landowners’ interest in participating in carbon offset markets

Research Issue

Forests have the potential to be one of the largest-volume and lowest-cost means of sequestering carbon. Additional stored carbon can be quantified and sold in the market place as carbon credits to offset carbon emissions made elsewhere. The nation's family forest lands have the potential to be an important contributor to carbon sequestration efforts, but only if their owners are willing to manage for carbon and participate in markets that trade carbon credits. Yet little is known about how family forest landowners view programs that enable them to sell carbon credits generated from the growth of their forest, whether they would be interested in managing their lands to sequester additional carbon, or the compensation that would be required to encourage a meaningful level of participation. In the absence of this information, it is difficult to know how large of a role family forests may play in the carbon sequestration arena. 

Our Research

We conducted a study to identify and quantify family forest landowner interest in the Lake States in participating in a voluntary carbon market trading program. A mail survey was administered to 2,200 randomly selected family forest owners in Michigan, Wisconsin, and Minnesota. The questionnaire assessed landowner interest in participating in a hypothetical carbon credit trading program and sought information on landowner objectives and practices, their attitudes towards carbon credit programs, and characteristics about themselves and their forest land. From the survey data, a statistical model was developed to examine the factors affecting participation in a forest carbon offset project by family forest owners and estimate landowner participation probability. We also conducted six follow-up focus groups with a subset of the survey respondents to further probe some of the survey responses and to gain greater insight and clarity into family forest landowner attitudes towards forest carbon management and trading.  Focus group participants were purposefully selected to represent a cross-section of the earlier survey respondents, including landowners located across the three states and with a range of forest acreage, ownership objectives, management behaviors, and willingness to sell carbon credits.

Expected Outcomes

Results of our analysis suggest that Lake States family forest owners are very unfamiliar with forest carbon credits and markets, yet curious.  Our analysis found that, in general, landowners are more likely to be interested in selling carbon credits when payment amounts are higher and required contract lengths are shorter, which may be at odds with the need for longer participation to ensure the quality of carbon offsets.  Our modeling results suggest that a payment of approximately $18/acre/year would be required to generate a 50% participation rate among eligible Lake States family forest landowners.  This payment amount is higher than currently being offered for carbon credits through voluntary markets.  However, our model suggests that some portion of landowners would be interested in selling carbon credits within the range of payments currently offered, and further that a portion of owners might be willing to sell credits or manage for carbon without receiving any carbon credit compensation.  Our analysis suggests that landowners who require little or no payment for carbon management may place a high value on the co-benefits that can accrue from carbon sequestration efforts (e.g., improved water and soil quality, wildlife habitat, and aesthetic values) and believe that climate change is a problem of environmental concern that forests can help address.  These landowners may be more interested in simply managing for carbon sequestration rather than meeting the host of conditions required for formally selling carbon credits. More research is needed to identify and understand this segment of family forest landowners as they may hold the greatest potential among family forest landowners for contributing to forest carbon sequestration efforts.

Focus group findings underscored our survey results that family forest landowners generally prefer higher carbon credit payments and shorter contract lengths than those currently offered.  However, our focus group discussions uncovered additional factors that may influence a landowner’s interest in participating in a carbon offset project.  Specifically, some landowners expressed a willingness to participate for little to no compensation if a carbon offset program provided them with forestry assistance that helped them achieve other ownership goals.  We also found that landowners appear to be most interested in the personal benefits they can attain through carbon management (e.g., improved wildlife habitat) rather than the less tangible societal benefits (e.g., the role of their forests in contributing to global carbon levels).  Further, we found that landowners who either felt their land was in a poor condition or not meeting their desired forest ownership objectives were more receptive to the idea of participating in a forest carbon market program. In essence, many viewed carbon market participation as a vehicle by which other personal forest ownership goals could be achieved.  Finally, our research revealed that some landowners would be more amenable to participating in a carbon storage program structured as a property tax relief program as opposed to a carbon market trading program.  The feasibility of such an approach to enhance forest carbon storage would need to be explored.  Finally, additional research is needed to increase our understanding of how or whether participation in existing forest landowner assistance programs like the Forest Stewardship Program could allow landowners to meet carbon co-benefit land management goals.

Research Results

Miller, Kristell A.; Snyder, Stephanie A.; Kilgore, Michael A. 2015. State forestry agency perspectives on carbon management and carbon market assistance to family forest owners. Journal of Forestry. 113(4): 372-380. 

Miller, Kristell A., Snyder, Stephanie A., Kilgore, Michael A., Davenport, Mae A. 2014. Family forest landowners’ interest in forest carbon offset programs: Focus group findings from the Lake States, USA. Environmental Management, 54(6): 1399-1411.

Miller, Kristell A.; Snyder, Stephanie A.; Kilgore, Michael A. 2012. An assessment of forest landowner interest in selling forest carbon credits in the Lake States, USA.  Forest Policy and Economics. 25: 113-122.  

Research Participants

• Kristell A. Miller, Department of Forest Resources, University of Minnesota 
• Stephanie A. Snyder, Operations Research Analyst, US Forest Service, Northern Research Station
• Michael A. Kilgore, Department of Forest Resources, University of Minnesota
• Mae A. Davenport, Department of Forest Resources, University of Minnesota

For further information log on website :
http://www.nrs.fs.fed.us/sustaining_forests/conserve_enhance/special_products/carbon_offset/