Carbon sink compensation could triple forest owners' revenues

Good Morning,

Carbon sink compensation is a way to financially compensate forest owners for carbon sequestration occurring on their land. Carbon sequestration is the process by which carbon dioxide (CO2) is removed from the atmosphere and stored in trees and other vegetation.

VTT has created a theoretical model where forest owners get compensated as the forests' carbon sink increases. In this model, carbon emitters – typically the forest industry – would have to pay for carbon sink reduction. The model works as an incentive to delay logging; this would mean longer forest rotation periods, and thus the average age of forests would increase.

According to the VTT model, the forest owners' revenues would double or even triple, and the forests' carbon sink increase while the chemical pulp industry would have to foot the bill. The model would revolutionize the forest industry; instead of logging, letting the carbon storage grow would be a considerably more lucrative option for the forest owners.

A central problem with the model is it would potentially move the logging and chemical pulp industry to other countries if only Finland were to apply it. VTT emphasizes the model's theoretical nature as a tool to observe the current state of carbon sinks and forestry.

Let's jump into the major headlines

EU's Carbon Allowance (ETS) price development

UK's Carbon Allowance (ETS) price development

HS | Finnish exports reduce more emissions than Finland produces. The Confederation of Finnish Industries has calculated Finnish companies' carbon handprint for the first time.

The Guardian | Warning of unprecedented heatwaves as El Niño set to return in 2023. Scientists' early forecasts suggest El Niño will return later in 2023, exacerbating extreme weather around the globe and making it “very likely” the world will exceed 1.5C of warming. The hottest year in recorded history, 2016, was driven by a major El Niño.

Reuters | Davos 2023: UN chief urges 'credible' net-zero pledges. U.N. Secretary-General Antonio Guterres called on business leaders gathered at the World Economic Forum in Davos to follow the principles outlined by an expert group to make "credible", accountable net-zero pledges and avoid greenwashing.

The Guardian | Davos 2023: UN head accuses fossil fuel firms of business models ‘inconsistent with human survival’. The head of the United Nations has accused the world’s biggest fossil fuel companies of refusing to abandon a business model at odds with human survival despite knowingly putting the world on course for a climate meltdown decades ago.

Reuters | Police detain Greta Thunberg at German coal mine protest. Climate activist Greta Thunberg was among others detained during protests against the demolition of the coal village of Luetzerath on Tuesday.

Euronews | Swedish mining company discovers Europe's largest deposit of rare earth elements. Swedish iron ore miner LKAB announced that it had discovered Europe’s largest deposit of rare earth elements, which are essential for making electric cars and wind turbines. The deposit was discovered right next to its iron ore mine in Kiruna, far north in Arctic Sweden, and that it contained more than 1 million tonnes of rare earth oxides.

HS | Draft for Finnish national biodiversity strategy aims to increase strict forest protection by nearly 50 %. The proposal would increase the legally protected land area from 1 390 000 to 2 020000 hectares.

HS | Finnish Extinction Rebellion put a halt to logging in Aalistunturi. Nature conservationists say logging undermines a natural park initiative planned in the area and demand logging to discontinue while the conservation proposal is pending. According to Forestry Ltd, valuable natural habitats reside outside their logging plan.

STT | Energy crises has created a grey market for waste oil in Finland – recycling industry concerned. Rising energy prices have created demand for waste oil for burning. However, buying, selling or burning waste oil without a proper licence is illegal and can be considered an environmental offence.

Tekniikka & Talous | Study: Climate change increases the risk of mold in buildings.

HS | Finnish study: Planted urban trees are carbon emitters until up to 14 years after planting. After 30 years, the planted urban trees become net carbon sinks, meaning they absorb more carbon than they have emitted..

Reuters | U.S. to simplify offshore wind regulations to meet climate goals. The U.S. Department of the Interior will reform its regulations for the development of wind energy facilities on the country's outer continental shelf to help meet crucial climate goals.

The Guardian | Fossil fuel producers must be forced to ‘take back’ carbon, say scientists. Fossil fuel companies should be forced to “take back” the carbon dioxide emitted from their products, handing them direct responsibility for cleaning up the climate, a group of scientists has argued.

The Guardian | Pollutionwatch: citizen science helps raise alarm on air pollution in the UK. More and more people are making their own air pollution measurements and using these to press for action from national and local governments.

STT | Atea named the world's most sustainable IT service company. For the second year in a row, the Norwegian IT infrastructure company has been named one of the world's top 100 most sustainable companies Corporate Knights Global 100 index.

STT | Telecommunication company DNA receives ISO 14001 certificate for environmental management

Tonga eruption increases chance of temporary surface temperature anomaly above 1.5 °C. The Hunga Tonga-Hunga Ha'apai eruption in January 2022 injected large amounts of water vapour into the atmosphere. Here, the authors show that this can cause additional warming over the next years, which increases the likelihood of exceeding 1.5 °C warming over a short time period. (Nature Climate Change)

Climate risk insurance can effectively mitigate economic losses. Global warming is expected to lead to an accumulation of particularly intense hurricanes in the United States. This may substantially increase the economic losses caused by these storms. Better insurance could effectively mitigate the climate change-induced increase in economic losses. This is shown in a new study by the Potsdam Institute for Climate Impact Research examining the effectiveness of climate risk insurance in the US. (Science Daily)

Research could simplify process for calculating soil carbon credits. A study by University of Illinois provides new insights for quantifying cropland carbon budgets and soil carbon credits, two important metrics for mitigating climate change. Using an advanced agroecosystem model on corn-soybean rotation systems in the U.S. Midwest, researchers assessed the impact of soil organic carbon (SOC) stock uncertainty on cropland carbon budget and soil carbon credit calculation. They found that high-accuracy SOC concentration measurements are needed to quantify a cropland carbon budget, but the current publicly available soil dataset is sufficient to accurately calculate carbon credits with low uncertainty. The results could simplify the process for calculating soil carbon credits, which reward farmers for conserving soil carbon through crop rotation, no-tillage, cover crops, and other conservation practices that improve soil health. (Science Daily)

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Picture of the week:

Private jet emissions quadrupled as 1,040 planes flew in and out of airports serving Davos during the 2022 World Economic Forum (WEF) meeting. Last Monday, climate activists blocked a private jet airport used by attendees arriving, calling for the wealthy to be held accountable for climate and ecological damage.