North Cowichan stands to benefit from forest carbon credits as carbon tax increases
The financial benefits of forest carbon credits will continue to grow as the carbon tax increases in the coming years, a UBC forest research associate predicts.
“The bottom line is that the price will go up over time,” said Clive Welham, who is also co-founder of 3GreenTree Ecosystem Services Ltd. “I don’t think there’s any doubt about that.”
He added: “Carbon prices have held up fairly well through the pandemic. There had been speculation that prices would tank because economic outputs were down.
“But it’s had the opposite effect. People are thinking, ‘well, we really do have these global problems.’ The pandemic is one of them, and now climate change is another.”
“A lot of companies are coming out with net-zero pledges, they’re making commitments now and we’re seeing shareholder movement…that are moving the needle certainly to a much more favourable view of doing something about climate change.”
There could actually be a shortage of carbon credits to purchase in the next five to 10 years if these commitments hold up, Welham said.
The federal government has announced it will add $15 per year to the price of carbon through 2030 when it will reach $170 per tonne.
Currently, the carbon tax is $45 per tonne.
Welham also explained that the federal government will establish an emissions cap on large emitters. Those exceeding the cap will have the option of paying the carbon tax or seeking to offset some of those emissions through the purchase of carbon credits, which will cost less than the carbon tax.
Forestry will be one sector in which carbon credits can be purchased, which means that North Cowichan could earn money for not logging. Guidelines are being developed on how a forest would become compliant with the federal program.
3GreenTree has been working with North Cowichan as part of a public consultation process on the future of the 5,000-hectare Municipal Forest Reserve.
That consultation has been suspended for well over a year now pending separate talks with local First Nations — and that means council has not been pursuing carbon credits as a potential money maker.
Welham noted that high lumber prices earlier this year meant extra money for the mills and retailers, but less so for those providing the raw logs. “It’s not realistic to look at a two-by-four in Home Depot and think, ‘oh, my logs are worth four times the amount because it has gone up four-fold in the last 12 months.’
“That’s just not how it works. We haven’t seen lumber prices rising because there’s not enough logs around. That’s not the problem.”
— Larry Pynn, July 14, 2021