Protecting timberland RMZs through carbon markets: A protocol for riparian carbon offsets

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Riparian Management Zone (RMZ) allocations can place a burden on landowners due to restrictions (sometimes prohibitions) on harvesting. The opportunity cost for the landowner may be minimized by shifting the primary management objective in RMZs from timber production to compensation for above-ground carbon. Our primary objective was to compare long-term net revenue generating potential of RMZs under three scenarios: (I) compensation for carbon credits without harvesting; (II) partial harvesting using Best Management Practices (BMP) guidelines without carbon credits; (III) partial harvesting combined with carbon credits as per the California Compliance Offset Protocol. Basic stand data on trees of 2.5 cm and higher were collected in riparian forest plots along headwater streams within two experimental forests in the northeast US. The USFS Forest Vegetation Simulator was used to simulate growth and yield and schedule management activities over 20-year cutting cycles. Timber volumes and registry offset credits along with their market values were calculated for the respective scenarios and a Net Present Value (NPV) and Equal Annual Equivalent (EAE) analysis was performed under assumptions of constant prices and costs. The initial aboveground carbon stocks at both locations were 32% and 140% higher than the average value for their assessment areas. Having above-average carbon stocks and basal areas between 30 and 33 m2/ha, all scenarios returned positive NPVs and EAEs. The hardwood riparian forest had a higher NPV and EAE by not participating in the carbon markets and pursuing partial harvesting as per BMP guidelines (Scenario II) at lower discount rates but had higher NPVs and EAEs under carbon markets at higher discount rates (Scenario I and III). The conifer/mixed species riparian forest provided greater positive net revenue flows by participating in the carbon markets either in a no harvesting scenario or under partial harvesting as per guidelines in the Protocol (Scenarios I and III). Our results indicate that a protocol for compensating landowners with large forest holdings for riparian carbon offsets provides an opportunity to generate positive net revenues in scenarios in which state BMP guidelines may restrict harvesting in RMZs. Given the high density of ecologically critical headwater streams in the Northeast and potential RMZ restrictions, the carbon offset option provides landowners with the opportunity to remain economically viable.