April 22nd, 2009

Avoided deforestation (AD) is the most popular choice when companies choose forestry projects for carbon offsets. AD was the most popular choice with 91% of respondents to the survey, although reforestation with native tree species came in a close second with 89%.

The survey, ‘Forest Carbon Offsetting Survey 2009‘, was published in mid-April by EcoSecurities and other contributors.

On this Earth Day 2009, we believe this high level of support is important, because trees and forests represent climate change opportunity at the most meaningful, personal level, the individual.

While carbon offsets can be tough to conceptualize, and measuring carbon footprints seem theoretical, nothing beats digging a hole and planting a tree to engender plenty of feel-good emotions. As children, we learn that trees take carbon dioxide and produce oxygen, so the simple activity of planting a tree provides a tangible benefit immediately which “sustains” us for years to come as we watch it grow.

You never forget planting tree. For example, have you ever returned to a house you sold years ago, and your first comment is, “Look how big the tree has grown! I remember when we planted it, and it was only a foot tall.” Trees have permanence; you count how many years the tree has been living. Trees are personal; it’s a special bond between you and the tree, as if your name is on it that no one else sees but you. And you feel compelled to tell others about your bond with that tree.

Did you plant a tree on Earth (or Arbor) Day this year, or before, and receive these benefits in return?

photo credit:  Environmental Council of Sacramento

Posted in Carbon Offsets, Forestation | No Comments »

April 16th, 2009

I’ll refrain from a strong temptation to weave several amusing references to the term “black liquor” and simply state that my preference in liquor tends more toward a golden color. Let’s define what it is and why it is important.

Black liquor is a byproduct of the papermaking process.

Black Liquor

Pulp mills use caustic chemicals to boil wood which separates pulp from combustible chemicals in the wood. What is left after the pulp is removed is called black liquor, which is then refined and burned as an energy source in the mill. Nothing new about it; been going on for decades.

What IS new is that the US taxpayer is now subsidizing it through a loophole in the 2005 Highway Bill which was intended to encourage the use of alternative fuels in cars and trucks by crediting the excise tax when a taxpayer blended at least 0.1% of a taxable fuel (kerosene, diesel or gasoline) with the qualified alternative fuel.

This credit never applied to the paper industry, until the powerful paper lobby managed to get it applied to them in December 2007. What was estimated to be a $61 million cost to taxpayers could balloon to $10 BILLION according to Kevin Mason of Equity Research Associates. Just as maddening, mills must blend fossil fuels with the black liquor to be eligible for the credit.

Understandably, Canadian mills are crying foul, because the credit changes the economics of production, with the potential to cover perhaps 60% of pulp production costs.

We’ll leave those points to be debated by others, while focusing on this related issue:

This legislation is environmentally bankrupt. It discourages recycling.

Recycled corrugated is mechanically pulped and does not create the black liquor byproduct. The tax credit changes the economics of pulp production in favor of virgin pulp over recycled pulp.

The result: more trees cut down (aka carbon dioxide gatherers) more energy used, and more pollution created. This is going in the WRONG direction.

At least two U.S. containerboard mills recently switched from recycled corrugated to wood chips as their fiber source (source: Dead Tree Edition), with more on the way.

Commodity prices for recycled paper have crashed during the past year, (discussed in a previous blog “Freefalling Recycled Paper Prices“) raising fears that environmentally friendly practices driven by economics may falter. Ill conceived tax policy only adds (alternative) fuel to that fire.

Sound off about the environmental effect, or the other ramifications of this law by posting a comment below.

Tags: Carbon Sequestration, environment, green movement, paper recycling
Posted in Business | No Comments »

March 11th, 2009

With all the talk about banks not lending and no credit, I feel the need to say it has not been our experience.

Today’s historically low interest rates demand that we refinance long-term debt. We’ve got a 75,000 square foot facility financed with two notes: an SBA 504 loan on 40% and conventional bank loan for the 50% with 10% equity investment.

With our 5 year prepayment penalty having recently expired on the bank note, which is currently a variable rate adjusted quarterly, I have sought lenders to refinance into the longest fixed rate they would offer, and got three offers. Three.

I’ll admit that the bank has a very secure position, since the SBA takes the second lien, meaning that the bank gets their 50% first, should a default occur. Also, our balance sheet is, well, in balance, but we’re a small business in an uncertain economy with…you know the tiring refrain.

The offer we took will get our payments fixed for ten years in the high six percent range, so much better than the variable rate that has soared to over 9% at times during the past five years. As a business manager, I can now budget more accurately, and my guess is that there will certainly be higher interest rates in the next ten years that will make this deal, well, a deal.

Maybe this locked-up credit market is about what the talking heads call “interbank” lending, which my international finance background (not) doesn’t understand. The point is, not all lending is shut down, and we will be better off financially because of it.

Does anyone else have a similar experience?

Posted in Business | 1 Comment »

March 3rd, 2009

A recent article on the Cleantech blog website (www.cleantechblog.com) by David Niebauer provides a thorough discussion of the forestry element of the coming carbon credit market. Let me summarize.

There seems to be little doubt that with the new administration, carbon offsets will soon become mandatory. That issue can be discussed in a different forum, but our interest lies in the standards by which forestry projects will be evaluated, measured and priced, including afforestation and reforestation.

Additionality For a project to be additional, the funds generated by the sale of carbon credits must be critical to the project’s viability rather than simply a means for the developer to enhance financial returns.

Verification Use of third parties to validate, monitor and register carbon credits. The process adds cost both initially, then also as a charge per ton of $.30 to $.50.

Socio-economic and Environmental Benefits Does the project provide jobs, recreation, biodiversity, aesthetics and improved land use? Forestry projects score high marks in this category in comparison to some offset projects like landfill methane capture.

Permanence A measure of risk, since forests can be destroyed (fire, tree rotting) which must be accounted for using credit set-asides or even insurance.

Another post will discuss the pricing of credits and the impact the recent collapse in the European market may have on this, but one aspect of our emerging commitment to stop global warming.

As always, I welcome your comments.

Posted in Carbon Offsets, Certification, Forestation | No Comments »

February 4th, 2009

There is a somewhat disturbing undercurrent in the carbon offsets arena.  Seems that trees and forests don’t rate as viable carbon offset methods.  Excuse me?

For those new to carbon offsets, it involves the valuation of activities which reduce greenhouse gasses which, when verified, are sold to individuals and companies who seek to offset their carbon footprint.

Carbon offsets range from capturing the methane emitted by the decomposition that occurs at landfills (methane is a 20X more harmful greenhouse gas than CO2) to wind farms (the theory that electricity created from wind reduces the need to have it created by, say, coal.)

TerraPass, a San Francisco-based offset company, doesn’t offer any forestry options for its customers seeking offsets.  One reason offered is that it takes too long to recognize the benefit, and they fund offsets that occur now.  Fair enough, if that’s your model.

But they go on to describe an inherent risk, in that eventually trees can die.  Others would argue that  reforestation provides the lowest cost means to achieve  carbon sequestration, and it can be accurately measured.

No one is debating the aesthetic benefit of forests [author smiles…].

Third party verification provides a valuable benefit to sellers and buyers of forestation project credits.  In addition to limiting the duration to perhaps 40 years, after which time the sequestration neutralizes as old trees die and new ones grow, percentages of the project can be set aside as a risk-recognized method for damage or destruction, such as in the case of fire.

A previous blog listed some calculations on carbon sequestration by trees, but Russell Simon, communications manager with Carbonfund.org, said it well when discussing the difference between avoiding greenhouse gas escape as with methane capture at landfills, and removing carbon from the atmosphere:  “Sequestration is the only kind of project out there that takes CO2 that’s already been released and does something with it.”

‘Say it well’ yourself by leaving a comment.

Tags: Carbon Dioxide, Carbon Sequestration, environment, green movement, landfill
Posted in Carbon Offsets, Certification, Forestation | 7 Comments »

January 30th, 2009

In a recent post by Jennifer Berry at Earth911.com, a couple of important, and under-reported facts were presented:

• Due to fires and other natural causes, over 1 million acres need to be replanted, according to the U.S. Forest Service
• According to the U.S. Environmental Protection Agency, approximately 35 percent of the municipal solid waste stream (MSW) is made up of paper and paperboard products. Paper makes up the largest portion of the municipal waste stream and is also one of the most recovered materials.

Where does Progressive fit into this?  By encouraging their customers to move to paperless statements, tons of paper didn’t need to be printed.  As an incentive, they agreed to plant a tree for each customer who signed up.   How many took them up on the offer?  A million.

That’s a million new trees being planted. A million trees, once mature, will absorb about 48 million pounds of carbon dioxide each year.  And for every ton of paper NOT printed, 15 trees avoid the hatchet, so they can continue to store carbon. We call that win/win, and is something we can all understand.

Good job, Progressive Insurance.

Tags: Carbon Dioxide, Carbon Sequestration, environment, green movement
Posted in Uncategorized | 4 Comments »

January 29th, 2009

Green Biz published an article describing the entrance of UL into the Green Certification area as a “key growth strategy” for their business intended to combat greenwashing.

I have many years of electronics industry experience in a previous life, so I offer my perspective on UL. You provide them with your test results with an exorbitant fee (because it is an electronics industry requirement) and you are Certified! Rubber stamped based upon their previously-defined qualification criteria.

How would that model translate to the dynamic and extremely diverse eco-business climate? Would standards be flexible enough for innovation?

Another model is to bring together interested and knowledgeable constituents, both public and private, without the bias of a profit motive, to develop standards using already-accepted methodologies.

An example of this is the process used by various committees of the CCX (Chicago Climate Exchange) to establish “protocols” for use by verifiers when an entity wants to sell carbon credits on the exchange. With significant investment sums at stake, they seek to establish a trustworthy valuation mechanism necessary for the proper functioning of markets.

In my opinion, a similar approach would be a more valuable, transparent, and flexible method to evaluate eco-friendly claims.  This is an important issue in the eco-business community, and I would like to hear from you whether you agree with my premise, or disagree, believing UL can provide a valuable contribution.  If not them, who?

Posted in Business, CCX, Certification, Greenwashing | 4 Comments »

January 27th, 2009

Consider:

• In 1850, atmospheric carbon dioxide was roughly 280 p.p.m.
• Today it is 385 p.p.m.
• By 2050? Predictions range from 450 to 600 p.p.m.
• CO2 contributes to half of global warming. Gases like chlorofluorocarbons and methane, along with soot and other pollutants, contribute to the rest.
• Carbon Dioxide, because of the way it interacts with the oceans and atmosphere is more persistent than the other causes of global warming, which dissipate more quickly when the sources decline.

What can we conclude? Reductions in emissions is only part of the equation. We must actively pursue methods to remove CO2 from the air. “Carbon capture and storage” (CCS) is a term used for the non-biological method of injecting carbon into storage sites, i.e., geologic formations.

Biological methods center around reducing deforestation and planting trees. On an individual level, planting trees is an activity where you can make a difference, and remains the cheapest way to remove CO2.

“Think Globally, Act Locally.” Healthy trees absorb 48 pounds of carbon each year, and produce enough oxygen to support two people. If a million people each planted a tree, 10,000,000 pounds of carbon would be removed from the atmosphere each year, according to the American Forestry Association.

I would be interested to hear your thoughts on this subject.

Tags: Carbon Dioxide, Carbon Sequestration, environment, green movement
Posted in Forestation | 1 Comment »

January 22nd, 2009

Just today, researchers writing in the journal Science announced that trees in the western United States and Canada are dying twice as quickly as they did just 30 years ago.

These thinner and weaker forests may soak up less carbon dioxide, in turn speeding up global warming.  There is no dispute that trees store carbon, and any reduction in our forests, means less available for storage.

Trees take in carbon dioxide and release oxygen, removing carbon from the atmosphere. But when trees die or burn, this carbon is released back into the atmosphere.

So a dying forest adds to the carbon that in turn helps warm the planet’s surface.

The researchers said they found trees of various species, ages and sizes are dying faster at every elevation.

Mark Harmon, a professor of forest ecology at Oregon State University, said: “Forest fires or major insect epidemics that kill a lot of trees all at once tend to get most of the headlines. What we’re studying here are changes that are much slower and difficult to identify, but in the long run extremely important.”

What do you think?  Is this “no big deal”, or “one more piece of evidence”?  Perhaps a call to action?

Posted in Forestation | No Comments »

January 20th, 2009

Foundational concepts behind this blog

• Growing a profitable business
• Attracting the very best talent into a virtual organization
• Recycling paper for environmental benefit
• Securely shredding sensitive personal information
• Re-establishing forests with environmental sensitivity
• Engaging in dialogue to encourage thought leadership
• Become a center connecting point

The dynamic forest is ever-changing, made of individual trees

Posted in Business | No Comments »