By Arno Holschuh
California Coast & Ocean, Vol. 21, Nos. 1 & 2
Spring/Summer 2005


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Dense foliage above the creek helps to maintain cool instream habitat.

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Mendocino Redwood Company forester, Colby Forrester, takes a break from his work by the stream in cool riparian habitat.


On the north coast, there are places where towering groves of redwoods and Douglas firs stretch from the beach where the sand ends way back into the coastal ranges. Their stature, silence, and the exquisite calm that pervades them inspire us with awe. But that's far from the only reason why the temperate rainforests of Del Norte, Humboldt, and Mendocino Counties are valuable. They also provide essential habitat for myriad species, including the endangered marbled murrelet and coho salmon, and they serve our own species in many ways, pulling greenhouse gases out of the air and protecting the health of watersheds that supply clean drinking water downstream.

Great swaths of the northern coastal forest are in public hands now, protected as parkland or national forest, but much of it--43 percent--is privately owned, a working landscape that provides timber. Its owners range in size from publicly traded Pacific Lumber Company (PALCO), with 220,000 acres in Humboldt County, to cattle ranchers with a few hundred acres, harvested as a side business. Their holdings comprise one of the most steadily productive timber regions in the country, yet the future of these timberlands is uncertain.

North Coast timber companies and private landowners complain of being besieged by both government and global market forces. They are confronted with difficult and costly regulations, they say, every time they want to harvest timber--regulations that, despite the hardships they impose, fail to meet the goals of official state policy. These goals are embodied in the 1973 Forest Practices Act, which calls for a sustainable timber industry--and the protection of watersheds, fisheries, wildlife, and recreational opportunities. At the same time, once the wood is out of the forest, the timber producers face a volatile market and growing competition from other nations.

The timberland owners' problems are of public concern. Should they ever get so fed up that they decide to sell their land, the buyers are not likely to continue where they left off. Sooner or later, they are more likely to convert a working landscape into residential development, a phenomenon that is costing the state 24,000 acres of forest a year.

Society cannot afford to ignore the problem, said Connie Best, managing director of the Pacific Forest Trust (PFT). "We're dependent on forests, even if we live in the city." Best is one of a group of like-minded foresters, landowners, and activists who haven't given up hope that California's private forests can survive in a healthy state, as working landscapes that generate a reasonable income for the landowners while also continuing to provide wildlife habitat, water, and a green lung to put a brake on climate change. For that to happen, they agree that the economic values of the privately owned forests' ecological services need to be considered. They're working to change the way people in the forest industry, conservation groups, and the general public think about forestry and to bring the state's ailing timber industry to a state of economic and ecological sustainability.

As the state's premier forestland trust, the PFT tries to protect private timberland by buying conservation easements that allow timber harvesting to continue while ruling out the option of residential development. Others are exploring possible ways to create a market for the forests' ecosystem services, including the potential sale of carbon credits to polluting industries elsewhere.

Sustainable Clearcuts?

Much of the controversy surrounding forestry focuses on the silvicultural method being used. Large timber companies defend clearcuts, saying they are the most efficient way to extract timber from a forest and then replace it. Environmental groups denounce the practice, saying it contributes to erosion, destroys wildlife habitat, and violates California state policy. They point out that state law mandates that forestry be practiced in a manner that provides a permanent source of forest products for the industry while at the same time protecting larger values.

But if all one wanted was trees to harvest, one could clearcut one-sixtieth of a property every year in perpetuity, said Jim Able, a Eureka-based independent forestry consultant and registered professional forester. The arithmetic is simple: There'd be a new stock of 60-year-old trees to harvest every year. You would be maximizing your output, as trees grow fastest in a clearcut, because they have the most sunlight. And, Able said, "it makes your trees really easy to keep track of."

That style of management is known as "even-aged short rotation." It could be called sustainable, because it allows for a sustained yield, but it has serious side effects on natural resources. For example, biologists have found that certain species, most famously the northern spotted owl, need mature forest to flourish, and a stand of redwoods, which can live for more than a millennium, would be little more than a a bunch of toddlers at age 60. Soil erosion, and in extreme cases landslides, can occur as the trees holding together a slope are removed; that, in turn, leads to streams being filled with silt, ruining them for salmon trying to spawn, and damaging water quality.

Even-aged short rotation is also financially risky. Replanting trees after a clearcut is not cheap. The market for logs fluctuates wildly, and a traditional even-aged management system doesn't provide much flexibility. If you're cutting as much as you can, you don't have reserves to sell when the market is hot.
Above and beyond financial considerations, there is a feeling of stewardship among forest owners, Able said. "Most people who own a piece of forest, they want it to be more than a tree farm."

Regulations Can't Fix Forestry

In theory, managing land as a tree farm devoid of any true forest attributes is illegal. The Z'berg-Nejedly Forest Practice Act of 1973 created rules intended to ensure that California's forests were harvested in a way that would protect "recreation, watershed, wildlife, range and forage, fisheries, regional economic vitality, employment, and aesthetic enjoyment"--while also ensuring that "the goal of maximum sustained yield of high-quality timber products is achieved."

In the 30 years since the Act was passed, however, this system of regulations, as administered and enforced by the California Department of Forestry and Fire Protection (CDF), has failed to live up to either of those promises. CDF draws criticism from both environmental groups and the industry. Rules prohibiting the harvesting of timber along stream banks haven't restored decimated salmon runs, and timber companies complain that the process of getting a timber harvest plan approved has become prohibitively expensive and complicated.

Sharon Duggin, staff attorney at the Garberville-based Environmental Protection Information Center (EPIC), said that while the Forest Practice Act set out the right goals, "nobody is paying attention or keeping track in a meaningful way [as] to whether or not we are achieving those goals." She sees CDF as "myopic," too focused on individual harvest plans to appreciate the big picture.

That assessment is, in part at least, borne out by events on the North Coast. Almost all of the region's old-growth redwood--96 percent--has been logged. Flooding continues to be a problem in watersheds where erosion has filled streambeds with mud, a situation that also makes it impossible for indigenous salmon to spawn. Instead of reviewing the big picture, legislators, state agencies, and the federal government have added new layers of regulation. Until 2004, only CDF approval was required for a harvest plan. Since then, the Regional Water Quality Control Board has had the right to undertake a second, separate inspection to ensure that sediment won't get into streams after harvesting. Hydrologists, archeologists, and wildlife biologists all come out to inspect a harvest site prior to any activity--at the property owner's expense.

The result, according to Jim Able, is a counterproductive system. "If I had a logging road on my property with a washout and wanted to repair it with a culvert, I'd have to get six permits. That culvert isn't going to be any better after six permits than it would have been after two. And if you think about how much money is being spent on these permits, it's a lot of resources that could be spent on other projects to stop erosion."

Waste isn't even the worst problem, according to Able. The regulations just aren't effective. "We've had these watercourse buffer strips for 30 years, and they're not working. But instead of trying to find the real problem, we slap more regulations on it."

Specific regulations often amount to a series of hoops to be jumped through; they are proscriptive rather than results-oriented, said Donald Gasser, system forester for Pacific Gas and Electric and a former lecturer at UC Berkeley who has studied the effect of regulations on the forest landscape. "The question we need to be asking is: 'Is the water clean following a harvest?' Right now, the question for a landowner is: 'Am I covered?'"

Ironically, the cost of regulations drives some landowners to cut more. Gasser said that landowners offset the cost of the numerous inspections and reports required for even a small timber harvest plan (THP) by increasing the harvest. "Most small landowners just want to do a small cut, but the cost of a THP discourages them from doing that. A lot of paper gets printed that does not contribute very much on the ground."

A Streamlined Failure

In theory, there is a program that can help streamline the regulatory process, improving results while lowering costs. Instead of tackling the habitat issues of each harvest separately, a timber company can enter into a Habitat Conservation Plan (HCP) that covers all of its property. Drawn up by scientists at the owner's expense and approved by state and federal regulators, an HCP specifies how a company is going to avoid and mitigate any harm to an endangered species; in return, the firm is granted an "incidental take permit," which trumps the Endangered Species Act by allowing for accidental killing or harassment of small numbers of a given species. The HCP is designed to be expandable to cover other land use issues, such as water pollution caused by sediment being added to the property's waterways.

With an HCP, a timber producer still has to submit a timber harvest plan for each harvest, but in theory those would be approved more quickly because the most contentious issues would have been dealt with in the HCP. The hope was that the parties involved would find creative ways to save habitat without nitpicking over individual projects, finally soothing the decades-long conflict between timber companies and wildlife advocates.

The HCP program has disappointed both the environmental community and the boardroom. PALCO, for example, completed an HCP as part of the Headwaters deal that transferred 3,000 acres of old-growth redwoods to the federal government and $380 million to PALCO's coffers. Environmentalists decried a host of violations of the plan--325 were documented by EPIC--and the Humboldt County district attorney has filed a fraud lawsuit against the company, claiming that it based its plan on tainted data.

PALCO, meanwhile, publicly threatened to go bankrupt if more of its harvest plans were not approved by the Water Quality Board, which never signed off on the HCP for Headwaters. The company won the right to execute those THPs after lobbying in Sacramento, but still isn't satisfied. "In the first six years of operation under the HCP, we only harvested at our planned, sustainable level one year," said CEO and president Robert Manning. He claims that the violations were "not catastrophic," but rather mere mistakes. The State has broken its promise to review THPs in a timely fashion, Manning said, and to ensure a steady supply of logs to PALCO's mills.

A more positive outcome may evolve for the Mendocino Redwood Company, which is now in the final stages of crafting its HCP. The company was formed in 1998 by a group of investors who bought 232,500 acres of heavily cut-over land in Mendocino County with the idea that they might rebuild the forest, an investment that would pay off in decades rather than years.

"Our investors are thinking about the long term, and part of that is having an HCP that will provide regulatory security," said the company's chief forester, Mike Jani. "We learned from [PALCO] what sort of shortcomings and problems there might be," Jani said. The first lesson was to go out and collect as much data as possible before submitting the HCP. "You have to remember, their HCP was part of the Headwaters deal, there was $380 million in the mix," he said. "They had to do it. And at that time, a lot of it was based on promising to go out there and collect the data." Knowing exactly what the situation is on its property and what needs to be done has helped Mendocino Redwood gain some planning security, Jani said.

The other big difference between the two HCPs is on the issue of water quality. Mendocino Redwood asked the North Coast Regional Water Quality Control Board to be part of the planning process for the HCP, addressing the problems that PALCO is currently facing. If all goes as planned, this HCP will include a property-wide waste discharge program that will allow timber harvests to be approved by the board in an efficient manner, streamlining the regulatory process as the original backers of HCPs intended.

HCPs don't make much sense for small timberland owners, however. They're pricey and are designed to create large-scale solutions; Jani said that his company's investors had already spent $2.4 million on theirs. For small timberland owners (with 2,500 acres or less) another option exists: the Nonindustrial Timber Management Plan (NTMP).

This is an overarching metaplan with two main rules: You have to cut selectively (no clearcutting), and you cannot cut more than you can grow. Each time you harvest, you have to file a plan, called a notice of operations. But such a mini-plan usually costs less than $1,000, a pittance compared to standard timber harvest plans, which can cost up to $12,000 for even a small harvest. The best thing about NTMPs is their longevity. "They last forever, as long as you abide by the terms," Able said.

There is one problem, however. Inspecting agencies get to do only one truly intensive inspection of the property when the NTMP is granted, but they can be very zealous. In forestry, zealous agencies translate into large price tags. Able said he'd seen NTMPs cost more than $200,000--a hefty price to pay for the privilege of practicing good, nonindustrial forest stewardship.

Good Forestry as Good Business

There is growing concern among sustainable forestry advocates that globalization may drive down demand for North Coast forest products. "There are global price pressures on the viability of the industry," said John Rogers, executive director of the Institute for Sustainable Forestry. "Russia has 22 percent of the remaining world timber reserves, and Canada can produce logs fairly cheaply," he said. The list goes on: The United States has begun importing wood from South America, New Zealand, and Australia. It is a pattern well-known from other commodities: Globalization brings lower prices. "And our prices are not going down," Rogers noted.

Other forest experts believe that the unique properties of the region's prime species, redwood, will keep the North Coast competitive in global markets for years to come. Redwood is rot-resistant, and therefore prized for fencing and decking. So far, timber companies haven't had a problem selling the timber they produce.

But Rogers is adamant that globalization will eventually spell the end of profitable forestry on the North Coast unless all sides of the debate get together to save the local industry. "We need to offset expenses for forest management in Northern California," he said. "Part of what we want to focus on is the value of the ecosystem services--services for which there isn't currently a market."

Certification may be one way to make good forestry lucrative. A landowner can ask an independent body to come onto a property and inspect operations. If the land management lives up to the group's "green" standards, the forest products are certified. In theory, those products can then fetch a higher price on the market.

Unfortunately, so far that hasn't been the case. Several timber operators have had their land certified by either the independent Forest Stewardship Council (FSC) or the industry-backed Sustainable Forestry Initiative. But certified lumber hasn't been able to attract much attention from the buying public. Consumers may be willing to pay twice as much for an organic pear as for a conventionally grown one because they believe an organic pear is healthier and more environmentally friendly. But when it comes to paying more to keep forests healthy, there's no sense of urgency. Mike Jani, who has had the entire Mendocino Redwood operation certified by the FSC, said that people just don't care as much about wood. "I don't feel that they're as concerned with what they put in their homes as what they put in their mouths."

Certification has been a (financially) losing proposition up to now, said Jani. "If I ran a company on the ropes, I wouldn't get certified. It requires an investment of time and money to audit your performance and pay the personnel overseeing the program." He said that Mendocino Redwood had its land certified because it helped build trust with local residents.

Another market-based approach to making good forestry good business might be the creation of markets for carbon. Forests sequester carbon that would otherwise be released into the air as carbon dioxide, the largest contributor to global warming. A healthy forest will not only hold carbon but trap more and more, offsetting carbon releases elsewhere on the planet, say carbon market advocates like the PFT. They propose that a market be established enabling a forest owner outside of Willits, for example, to sell "carbon credits" to a coal-powered plant in Texas to mitigate that plant's carbon dioxide emissions.

The first step toward such a market has been taken. The State of California has created a Climate Action Registry that can keep track of whether a power plant has reduced its emissions--or if a forest is being managed for increased carbon sequestration. While "the registry itself does not grant credits," it is a first step, said Michelle Passero, director of policy initiatives with the PFT. Forest owners who take good care of their property and sign up with the register would be able to sell that recorded and verified good behavior as a credit, should there ever be an official market.

The key to creating such a market is legislation, according to Passero. "There has to be a demand," she said, and that demand is most likely to be created by an overall cap on how much carbon dioxide can be released. "I think there's a good chance we'll see such a cap in the next ten years," she said. A bill creating a cap-and-trade system for carbon has in fact been introduced several times in the U.S. Senate by John McCain and Joseph Lieberman. "Each time they introduce it, they get a few more votes," Passero said.

Partners in the Forest

Right now, the main tool with which public agencies and nonprofit organizations are helping to preserve private forests is the conservation easement. State agencies, notably the Coastal Conservancy, transfer funds to land trusts. The trusts in turn pay forest owners for forestry easements that delineate how the land is to be used. The first rule is that keeping the land in timber production is okay but development is not.

"Low-intensity urban residential development is like rust: It's always eating away at the integrity of the forest ecosystem," said PFT's Connie Best. The crucial first step toward protecting California's forests is to stop the rust, because once land is developed, there is no turning back. Keeping land forested means keeping it as a working landscape, she said.

California's forests can't all be turned into parkland, nor should they be, she said. Parks do not generate property taxes, on which local governments depend, and in Northern California they have not brought jobs to replace those lost when the land goes out of timber production. Easements can give landowners capital they need to keep the land working.

"The people conserving these forests [under easements] are the private forest owners themselves," said Best. "They need to be encouraged to keep their land as high-functioning forest, and one of the ways to do that is through a working forest easement." It is an increasingly popular move: the PFT currently holds easements on approximately 35,000 acres of forestland in Oregon, Washington, and California, and is adding more every year.

Those easements have been placed only on relatively small properties, but Karen Gear, the Coastal Conservancy's North Coast program manager, said she thinks large timber companies may soon find themselves drawn to easements as well. "I think it's the future of large properties on the North Coast," she said. "If people are cutting to service debt, this is one way to get rid of debt issues and harvest at a reasonable rate into the future."

Able, on the other hand, has advised his clients to be very cautious about entering into a binding contract that limits land-use options. "You don't want to be in a position where you have to call San Francisco or Santa Rosa every time you want to do something on your land," he said. Easements can be helpful, he conceded, but only if the landowner has the right attitude.

"As soon as you sell an easement, you have a partner. If you like having a partner, that's fine. It just depends on whether you work well with others."

Too Little, Too Late?

There is no one patent remedy for the financial and environmental problems facing California's forests. "We're a long way from sustainability," Rogers said. "I think the path there isn't clear and laid out, and I'm sure it's not going to be easy." But the stakes are high for Californians. We need clean water and air, and there is widespread awareness of the dangers of global warming. We also need our forests for relief and inspiration, for the connection they provide between us and the rest of nature--if we but recognize it.

California residents, concentrated in a narrow band along the coast, need to take a look away from the Pacific and into the green sea behind them. "People spend so little time in or around forests," said Best. "If you don't have people recognizing the contributions forests make to their lives, they won't care about them. That's the biggest threat the forest faces today."

Arno Holschuh's last article for Coast & Ocean was "Living on the Edge," Winter 2004-05.