How Carbon Credits Are Impacting New Hampshire’s Forest Products Industry

In a recent report (2-8-24), The New Hampshire Business Review explored the impact of carbon credits on New Hampshire’s forest industry.

For centuries, the monetary value of forested land has only been realized when the trees are cut and standing timber is turned into finished lumber or panel products, the article explains. However, with the onset of climate change, the economics of traditional forestry are being upset by monetizing the role of forests as sequesters of CO2 and storehouses for carbon to address the warming climate.

As a result, carbon harbored in standing trees has become a virtual commodity in the form of credits traded on global markets between forest landowners and commercial entities seeking to offset their greenhouse gas emissions. In managing a forest for capturing and storing carbon, timber harvests are reduced to reap the value of carbon in standing trees.

Any number of carbon trading entities, conservation organizations, as well as commercial enterprises offer programs to landowners with as little as 10 acres, though most require a minimum of 30 or 40 acres.

According to the New Hampshire Timberland Owners Association, employment in the forest products industry numbers more than 7,200 and generates an annual output valued at $1.6 billion. Reduced timber harvests shrink employment and investment in traditional forestry industries while transferring income earned by foresters, loggers, truckers, mechanics, and sawmills to the investors and traders plying the carbon markets.

At the same time, the timber tax, levied and collected by municipalities at 10% of the stumpage value when trees are cut, is a source of local revenue, particularly in Coos County where it funds a quarter of public expenditures. Altogether, timber taxes returned $3.7 million in 2019, according to The New Hampshire Business Review.