FCWG Policy Platform - Goal Three
America’s forests and forest products are a proven carbon sequestration and storage “technology” to provide the negative emissions we need to slow climate change. Today, U.S. forests and forest products annually sequester and store almost 15% of U.S. carbon emissions from burning fossil fuels. New research suggests we could nearly double this natural carbon capture with the right actions. Best of all, this climate action through forests will build on the nearly 3 million jobs in America’s forest sector and bring broad co-benefits to our communities, from clean air and water to wildlife and outdoor recreation.
of U.S. carbon emissions from burning fossil fuels are stored annually from forests and forest products
The Forest-Climate Working Group (FCWG) was founded in 2007 to provide a unified voice across the U.S. forest sector that can help America capture this remarkable opportunity. Our member organizations reflect the wide diversity of actors who help to conserve and manage America’s forests every single day: private landowners, forest products companies, state foresters and other government agencies, forestry, conservation and wildlife non-profits, carbon finance, and academic researchers.
This platform outlines how policymakers can help private forest owners and public land managers grow the powerful climate solutions in America’s forests and forest products while delivering other environmental and economic benefits. Our recommendations fall in four key areas:
Advance Markets for Forest Carbon, Forest Products and Skilled Labor
More forests equate to more carbon being sequestered. That is why the foundation for forest carbon mitigation is to maintain the forest cover that we have, and to expand forests back into places where they have been lost to events like wildfire and clearing for agriculture. This includes expanding urban forests. Within this goal we provide diverse recommendations that advance conservation of private forests, including tax policies and markets supportive of private ownership. We also provide recommendations to expand forest cover on public and private land, including in cities, through diverse policy catalysts for reforestation and afforestation.
Forest Carbon Markets:
- Provide tax incentives that maintain and improve carbon beneficial forest management, including but not limited to:
- Maintain existing forest management federal income tax deductions.
- NEW: New tax incentives that provide credits or deductions for measurable forest carbon benefits.
- NEW: Provide policy mechanism to enable private capital, public funding, or a combination of both to finance or create tradeable credits for forest activities that measurably increase the forest carbon sink through carbon sequestration and storage. This could be connected to existing federal or state conservation programs, new federal funding or an offset program.
- Invest in forest product research, innovations and demonstration projects to expand existing markets and support new market and product development; enact policy that promotes increased use of forest products, and provide financial incentives that drive increased wood utilization. For example:
- Increase federal funding for education and technical assistance for architects and engineers to use wood in building construction through programs such as WoodWorks.
- NEW: Encourage wood building materials in federal buildings and federal programs that support building construction
- NEW: Encourage states to expand wood use promotion and construction projects.
- Increase funding for the USFS Wood Innovation Grants program to stimulate new product development, product improvement, new forest product uses, and new or expanded forest products markets.
- NEW: Improve and invest in workforce development and training programs, such as AmeriCorps, and pre-employment programs that link underserved urban populations with urban forestry careers.
- NEW: Address technical issues in Department of Labor regulations and occupational codes that hamper forest sector growth.
Deep Dive into the Policy Options
Low Carbon Footprint Building Tax Credit
Basic Policy Idea:
New construction tax credit for building with materials with lower carbon footprint with safeguards to ensure positive outcomes for forests and the climate:
- The transferable tax credit would go to the developer of the project, or the entity making most decisions/investments in materials for the project (multi-family house or other building). The amount of the tax credit would be based on the value of the building, not the land, and would be determined by the building’s carbon footprint score.
- The tax credit would be determined by a life cycle analysis that is well documented, scientifically sound, widely used, material agnostic, compares between materials, and considers all life cycle stages.
- There could be additional incentives provided for activities that provide social benefits and increase use of low carbon footprint materials in construction: 1) infrastructure projects, 2) affordable housing, and 3) public works construction like schools.
- Any tax credit for lower carbon footprint materials should include safeguards to promote positive outcomes for forests and climate
Providing a tax incentive to build with low carbon footprint materials will create incentives to reduce the carbon footprint of the built environment while also helping keep forests as forests, which provides clean water, wildlife habitat, and carbon sequestration at scale.
Who will benefit the most from this policy idea?
If structured appropriately, a low carbon building tax incentive could create the following benefits:
- Society will benefit from increased carbon sequestration in the forests and increased carbon storage in building materials used to reduce the carbon footprint of the built environment.
- Forest landowners will benefit from more demand for sustainably harvested trees contributing to a stabilized climate.
- Rural economies will benefit from increased job opportunities
Draft Legislative Concept – High Level Draft:
The purpose of this Act is to provide tax credits for reducing embodied and embedded carbon in commercial and residential buildings by using low carbon footprint building materials while providing safeguards to ensure positive outcomes for forests and the climate.
- Tax credit shall go to the developer of the project, or the entity making most decisions/investments in materials for the project (multi-family house or other building).
- The amount of the tax credit is determined by the building’s carbon footprint score and is based on the value of the building, not the land.
- The tax credit is determined by whole building life cycle assessment methodology or calculator. To be considered, a calculator or methodology must be well documented, scientifically sound, widely used, material agnostic, compare between materials, and consider all life cycle stages (including resource extraction and processing; product manufacturing; on-site construction of assemblies; all related transportation; maintenance and replacement cycles over an assumed building service life; and the demolition and transportation of non-metal materials to landfill).
- Ensure the tax credit is transferable to a third party so that it can be monetized. The tax credit should provide additional incentives for activities that provide social benefits and increase use of low carbon footprint materials in construction: 1) infrastructure projects, 2) affordable housing, and 3) public works construction like schools.
- Ensure the tax credit should include safeguards to promote positive outcomes for forests and climate.
- The Secretary of Agriculture, in consultation with the Secretary of Energy and the Environmental Protection Agency, shall review the preferred whole building LCA methodology/calculator and assess needed updates or value of switching to another calculator not less frequently than once every 5 calendar years.