The Attorney General’s office in New Hampshire is currently reviewing a proposal put forward by Bluesource Sustainable Forest Company regarding the reduction of logging activities on a significant portion of the state’s forests. This comes as policymakers are working on bills related to carbon credits. The area in question covers 146,000 acres and was originally designated for logging and recreational purposes through a conservation easement. However, the plan did not anticipate the potential revenue generation through carbon credit markets, which is a recent development in the industry. Bluesource, the new owner of the land, aims to reduce logging by approximately 50% on this large tract of land by 2024. This area represents about 3% of the state’s total landmass. While the intention of the plan is to increase forest carbon sequestration, it has implications for local mills, loggers, the regional economy, and potentially taxpayers.
The shift towards reducing logging activities is driven by the increasing value of preserving trees for carbon credits. This market-driven initiative aims to reduce carbon emissions. However, according to a report by the Energy Transitions Commission (ETC), the current price of carbon credits for avoiding deforestation is not enough to cover the marginal cost of avoiding commodity-driven deforestation. The Attorney General’s office is now evaluating whether Bluesource’s proposed reduction aligns with the original agreement established to protect the land. The plan outlines the company’s goals, which are subject to the easement. The easement serves as a safeguard to ensure that the land remains protected from development and outlines how it should be utilized, as well as the responsibilities of both the state and the landowner.
Out of the original 171,500 acres, 25,100 acres were allocated to the state. Of this, 25,000 acres were set aside for wildlife habitat management, while an additional 100 acres were allocated to expand the Deer Mountain Campground. The easement guarantees public access for various traditional recreational activities such as hiking, hunting, fishing, trapping, and snowmobiling along designated trails. However, it limits “non-forest activities” to a maximum of 10% of the property. In addition to preserving open spaces, protecting natural resources, and nurturing wildlife habitats, the primary objective of the easement is to maintain the property as a financially sustainable area for timber, plywood, and other forest product production. It explicitly permits “forest management activities,” including various methods of cultivating, harvesting, and removing forest products. The participation of Bluesource in the carbon credit market was not foreseen when the conservation easement was formulated two decades ago.
Forests have traditionally been valued primarily for the timber they provide. However, efforts to combat climate change have highlighted their ability to absorb and store carbon, giving them additional value. Forests can store nearly double the amount of carbon they release, making them significant carbon storage areas. In 2020, the U.S. Forest Service estimated that forests in New Hampshire held around 87 tons of carbon per acre by 2018. Approximately 42% of this carbon was stored in above-ground growth, while 38% was stored in forest soils. When trees are cut down, processed, and used to create solid wood products or building materials, their carbon remains stored within these products for potentially hundreds of years. In 2003, there was no established carbon market in the US, so the easement related to the Connecticut Lakes forest did not address managing the forest for carbon sequestration, storage, or carbon credit trading. However, in 2022, Bluesource Sustainable Forest Company acquired the Connecticut Lakes Headwaters Working Forest, totaling a million acres managed. This positions the company as “the largest private forestland owner entirely focused on addressing climate change.” Bluesource has also partnered with Oak Hill Advisors, a subsidiary of T.Rowe Price, to acquire forest lands, including those in New Hampshire. The company’s president, Roger Williams, stated that this collaboration would transition Bluesource from developing projects that generate carbon credits to becoming a forest land asset manager. Furthermore, Bluesource merged with Element Markets, a majority-owned entity of TPG Inc., an alternative investment manager. Element Markets describes itself as the primary creator and promoter of carbon and environmental credits across North America. Companies looking to reduce their carbon emissions can purchase these credits to offset their footprint. Each credit corresponds to one tonne of reduced or removed carbon from the air.
Bluesource intends to reduce timber harvests by more than half of what has been cut in recent years, particularly between 12,000 and 14,000 cords for the year ending April 2024. Meetings, discussions, and proposed legislative actions are currently taking place to address the broader consequences of the plan on the local economy. The potential outcomes could have a profound impact on the logging industry, the local community, and the area’s fiscal landscape. In response to concerns, Bluesource is engaging with legislators and stakeholders, offering expertise and collaboration to deal with the situation. Patrick D. Hackley, the director of the state Division of Forests & Lands, has confirmed that Bluesource has submitted its revised Annual Operating Plan, stating that they are currently in the review process to ensure the new harvesting plan complies with the purpose and provisions of the conservation easement. Bluesource’s initiative to reduce logging for carbon credit generation within a preserved land area is sparking debate in New Hampshire. The company’s actions intersect with the long-standing conservation easement, prompting discussions on the economic impact and forest carbon credit strategies.