Two pilot programs are experimenting with how forest owners can utilize carbon markets to compete, and to pay for healthcare.
Two pilot programs are experimenting with how forest owners can utilize carbon markets to compete, and to pay for healthcare. - 

At the U.N. climate summit in Paris in December, carbon markets got lots of attention. They allow polluters to offset emissions by paying forest owners to preserve their trees, which sequester carbon.

People are already experimenting with carbon markets in this country, including two pilot programs in Oregon.

One program ties conservation to health care. It recognizes the specific financial hurdles faced by family forest owners. When a forest represents your checking account, savings account and retirement funds, it isn't easy to make a quick withdrawal for a medical emergency.

"In today's world, it's probably one of the bigger things that people worry about is – 'How am I going to take care of my health care?'" said Scott Russell, who owns several hundred acres of forest northwest of Portland, Oregon.

Russell has seen neighbors forced to sell their tree farms because someone got sick.

Carbon markets allow forest owners to monetize the carbon stored in their trees. In this case, the profits would pay for health insurance.

Russell said, "In a lot of cases, it could make a difference in whether people hang on to their farms or not."

The pilot program would help forest owners avoid selling their land.

"So when that land goes up for sale, the typical buyer these days is either an institutional investor or some kind of industrial owner. So if that's mature timber, you have the risk of it being very quickly cut here in the Northwest for export," said Ben Hayes is with the Pinchot Institute for Conservation.

The Pinchot Institute is behind the healthcare initiative and another pilot program that allows small property owners to aggregate their forest land in order to compete.

"It's very hard for a small property owner — even though they accumulate a lot of carbon — to access the carbon market," said Woody Richen, who has inherited partial ownership of 450 acres of forest. "It's a little bit like mutual funds, I guess, where a small investor needs the help of some kind of aggregator or some additional expertise."

Historically, carbon markets have only been an option for large landowners with deep pockets that can afford the upfront costs.

"We are making a contribution. If others are getting paid to store carbon, why shouldn't the little guy have an opportunity to do that too," said Richen.

The carbon markets still have some downsides. They involve long-term land-use restrictions. And experts say the best rate on the current carbon market pays about four times less than selling trees for timber.

Follow Jeff Tyler at @JeffMarketplace