Viability of forest carbon projects on private land in Central British Columbia

Increasing concern over the Earth's climate with respect to global warming and green house gas (GHG) emissions has resulted in the undertaking of projects to both reduce carbon dioxide (CO₂) emissions and sequester CO₂ from the atmosphere. Projects are established for the purposes of generating carbon offsets measured in tonnes of CO₂ equivalents--mtCO₂e. Offsets are traded in various regulated and unregulated markets to fulfill emission reduction obligations and meet corporate social responsibility objectives. Forest carbon projects in the form of afforestation and reforestation (A/R) are recognized as a preferred and viable option for sequestering carbon and generating offsets. This study assesses the viability of undertaking such projects on private lands within the Prince George Timber Supply Area. A qualitative review of the criterion through which A/R projects are established, including additionality, permanence, leakage, co-benefits and standards, was conducted to determine the applicability of pursuing projects on private land. A quantitative analysis was performed to determine the financial feasibility of forest carbon projects. Using TIPSY (a tree growth simulation model) sites of various productivities (site index values of 24, 21, 18, and 12) were modeled to grow stands of trees for the purposes of maximizing volume of timber, lumber production, and subsequent offset generation. Using industry (Canadian Forest Products Ltd. - Canfor) and government (British Columbia Ministry of Forests and Range - BCMFR) costing information for forest stand establishment and maintenance, and four year average market pricing for offsets in the over-the-counter market, internal rate of return (IRR) and net present value (NPV) calculations were performed. Only three out of sixteen scenarios that were modeled indicated positive rates of return, and these returns were consistently low ranging from 0.27%-0.51% over 57-110 years. Using discount rates of 5% and 10% none of the scenarios modeled