Healthy trees are what it's all about for John Rajala, fourth-generation manager of 30,000 acres in north-central Minnesota.
When he tromps into the woods at Sugar Hills south of Grand Rapids, he scans the bare branches silhouetted against a deep blue sky and sees -- diversity.
"There's a basswood tree, there's a red oak tree, there's a maple tree, there's a birch tree. Off in the distance I see some white pine tops," Rajala said.
That kind of diversity is unusual in Minnesota, and it's great for his business. The Rajala Companies produce construction lumber and hardwood veneers for cabinets and furniture.
This particular stand was trimmed three years ago. Now the trees are about 10 feet apart. There are still some diseased and twisted trees here, and Rajala plans to cut them in a few years, so the healthy trees can grow faster. Those thinnings won't be made into furniture, though. Rajala will be looking to sell those trees to other markets.
"Hopefully there'll be a biomass market, a pulpwood market, and maybe by then there'll be some recognition for increasing the productivity of this site and we'd be able to get some carbon credit for it too, so that's part of why we're watching this issue."
That idea of getting carbon credits is what we're talking about here.
It takes a long time for a tree to grow big enough to produce wood for construction or furniture. While the trees are growing, it would be nice to have a little income.
There are markets set up to pay people like Rajala, who are managing their woods sustainably. One is the Chicago Climate Exchange. It's a voluntary cap and trade system. Dozens of companies including Ford, IBM, and Cargill commit to reducing their global warming emissions, and they can buy and sell the permits they get to emit greenhouse gases. They can also buy and sell offsets, projects that someone else undertakes to reduce emissions or to store carbon.
"That's where this forest comes into play," Rajala said. "Because scientifically it's proven, and very well understood, that carbon dioxide is being consumed through the process of photosynthesis as this forest grows."
Rajala can calculate the amount of carbon his woods is storing, and sell that as an offset on the Chicago Climate Exchange.
When he cuts down a tree, that reduces the carbon storage -- unless -- and this is the amazing part -- unless it's made into something that will last a long time.
In this case, something like what they make at the Rajala mill -- high-quality hardwood veneer, hardwood flooring, window frames.
"All of these products are going to go into an end use that's certainly of enough cost and enough value that they would last for a century if not two centuries. The end result is that carbon that was originally sequestered by forest is still captured and is not being released back into the atmosphere," Rajala said.
The carbon stored in those products can be traded on the Chicago Climate Exchange. It doesn't mean Rajala would have to dramatically change his business model. But the additional cash would make it easier for him to manage the forest for maximum productivity.
It's all new.
Farmers are a little farther along in the carbon storage business. By one estimate, about 10 million acres of farmland across the country are devoted to carbon sequestration.
Only a handful of forest owners are participating in the exchange and so far the price is low. One farmer in western Minnesota planted pines on seven acres, and got a whopping $35 check as his first payment.
Landowners expect if the U.S. eventually has a mandatory cap and trade program, as President Obama wants, prices will go up.
In the meantime, people are learning more about the ecological gifts the forests provide.
Mark Jacobs, the land commissioner in Aitkin County, recently conducted an inventory of how much carbon is being stored on county forest land.
That is the equivalent of 24,000 cars, according to Jacobs.
"These studies demonstrated that our forest management practices do store a significant amount of carbon. Whether we get any money for that or not, I think that's an important thing," Jacobs said
If Aitkin County decides to sell carbon credits on the Chicago Climate Exchange, the money will be shared by the county, school districts and township governments.
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