Source: VIRGINIA POLYTECHNIC INSTITUTE submitted to NRP
FOREST CARBON CONTRACTS: LANDOWNER PREFERENCES AND SPILLOVER EFFECTS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
ACTIVE
Funding Source
Reporting Frequency
Annual
Accession No.
1029723
Grant No.
2023-67023-39037
Cumulative Award Amt.
$649,563.00
Proposal No.
2022-10001
Multistate No.
(N/A)
Project Start Date
Jan 15, 2023
Project End Date
Jan 14, 2027
Grant Year
2023
Program Code
[A1651]- Agriculture Economics and Rural Communities: Environment
Recipient Organization
VIRGINIA POLYTECHNIC INSTITUTE
(N/A)
BLACKSBURG,VA 24061
Performing Department
(N/A)
Non Technical Summary
As opportunities to participate in forest carbon programs for nonindustrial private forestlandowners (NIPFLs) flourish in the US south, a series of questions remain regarding forest carbon contract design and uncertainty. We propose to develop a forest carbon contract design decision model coupled with a carbon accrual and water quantity production trade-off model to: (1) determine NIPFL forest carbon contract design preferences, including willingness to enter into contracts with varying degrees of uncertainty in financial returns, and how these preferences differ between underserved and non-underserved NIPFLs, (2) predict NIPFL adoption intensities and (3) determine water quantity spillover effects related to different forest carbon contract designs and across physiographic regions of Virginia. The integrated model will be estimated based on socioeconomic and stated preference data collected through a framed field experiment approach and on remote sensing (LiDAR) and field-collected data on forest parcel atributes across Virginia.
Animal Health Component
100%
Research Effort Categories
Basic
0%
Applied
100%
Developmental
0%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6056030301070%
6050680107030%
Goals / Objectives
We propose to advance the current knowledge of NIPF landowner willingness toparticipate in forest carbon sequestration programs and expand it to include: (1) landownercontract design preferences, differentiating these preferences for underserved landowners, and(2) the ecological spillover effects that may arise in regions where a trade-off between carbonsequestration and water quantity production might exist. Specifically, we will investigate forestcarbon contract design preferences as "bundles of terms of contract" regarding: (a) the size ofupfront investments as well as the size and timing of financial cash inflows and outflowsthroughout the program period; (b) contract length commitment; (c) individual versus groupcontracts; (d) type and amount of landowner forest management effort involved; and (e) contractuncertainty. Moreover, by taking the case of the landscape-diverse state of Virginia, we willassess the adoption intensity for different forest contract designs and their potential implicationsfor forest carbon and water quantity production.Specific objectives1. Determine forest landowner carbon contract design preferences, including willingnessto enter into contracts with varying degrees of uncertainty in financial returns, and howforest carbon contract preferences differ between underserved and non-underservednonindustrial private forest landowners.2. Predict adoption intensities by nonindustrial forest landowners across differentphysiographic regions for different forest carbon contract designs.3. Determine water quantity spillover effects of the different forest carbon contractarrangements across physiographic regions in the state of Virginia.
Project Methods
Our proposed methods compose a unique approach to modeling NIPF landowner behavior byintegrating methods from natural resources economics and ecosystem ecology that allow usexplore potential linkages between forest contracts and the trade-off between carbonsequestration and water production; these topics have previously been studied independently.However, integration is important to understand the societal carbon and water benefits (indirectlyaffecting landowner and their household wellbeing).We will develop a theoretical model that refers to a forestland owner's decision to enroll in a hypotheticalforest carbon program under different contract design options and associated uncertainty that is inter-temporal based on forest economics and agricultural household economics theories. An associated random-utility model for forest carbon contract preferenceswill be developed and tested through a series of econometrics procedures based on a data collected through framed field experiments carried out throughout the state of Virginia. In the framed field experiments,contract terms will be investigated in "bundles" include: (a) the size of upfrontinvestments, size and timing of financial cash inflows and outflows (related to carbon offsets andtimber harvest) throughout the contract period; (b) contract length commitment; (c) individualversus aggregated contracts; (d) amount of forest management effort required; and (e) associateduncertainty. The uncertainty will be expressed in terms of expected net revenues, after explainingto the participants the probabilities related to carbon credit and stumpage price changes and toextreme events (such as storms, fires, and insect infestation).To better understand trade-offs between carbon and water availability as well asthe contract preferences that may best optimize those trade-offs depending on physiographicregion. We will focus our simulation efforts on the landscape attributes (site index, climate) andthe specific forest carbon contract terms (affecting forest rotation length and forest managementstrategies, for example) that influence biomass accrual and associated water use. Usingparticipant landowner parcels (approximately 300), we will first estimate existing site attributes,forest biomass and carbon, and water yield rates (defined as precipitation minus ET). With theseinitial conditions, we will then employ growth and yield models (for biomass) and our previouslydeveloped models (Acharya et al., 2022), but here modified, to estimate ET and water yieldusing forest canopy structure (i.e., leaf area index).

Progress 01/15/24 to 01/14/25

Outputs
Target Audience:We have published an extension publication about carbon programs available to Virginia landowners. Although we do not have the numbers on how many people have read the publication, we have received great feed back from landowners, extension agents, academics (the publication is being used in class with undergrads, for example). We have also been in communication with our landowners through our extension services about the project. The forestlandowner summer 2024 newsletter was sent to over 2000 landowners in our mail database. Changes/Problems:We will request a one-year no cost extension due to delays in our project as described last year (maternity leave of project director, delay in recuriting PhD student). The recurited PhD student has gone through the first of academic training which she needed to better acomplish wrapping up the survey instrument. Also, we need more time trying to engage underserved landowners to participate in the project. What opportunities for training and professional development has the project provided?This past year, we graduated 2 masters students (one in forest economics and one studying the trade-offs between water and carbon production), we have supported a PhD student in forest economics (who will be fully supported by the project and be working on specific objectives 1 and 2 with the project director for her dissertation) and have supported one semester of another PhD student in forest economics (who has assisted with the development of the payments for carbon and water stacking model and simulation). How have the results been disseminated to communities of interest?We have published an extension publication through the Virginia Cooperative Extension services on carbon programas in Virginia, which we will be reviewing and updating soon. We have also shared more information about these programs and about out project with Virginia woodland owners who are on the list of our extension service (2000+) through the 2024 summer newsletter. Preliminary results on the tradeoff between water production and carbon sequestration have been presented at theAmerican Geophysical Conference 2024 Annual Meeting and the 2024 Virginia Tech Water Research Colloquium. What do you plan to do during the next reporting period to accomplish the goals?For specific objectives 1 and 2, we will be finalizing the survey instrument and framed field experiment protocol to get it approved by IRB by April 2024, when we will retake communicating with landowners to run the field work in the summer (july and august).Regarding specific objective 3, water and carbon tradeoff model refinement continues, and these relationships will be further explored by forest cover type and spatial scale this year. The team will continue to meet periodically as has been happening to connect the human and physical aspects of our work so we can produce a summary analysis by the end of the projecy addressing all three sepcific objectives.

Impacts
What was accomplished under these goals? As mentioned in last year's report, due to delays in the recruiting process for the forest economics PhD student carrying out the surveys and assisting with the framed field experiments, we are in the planning stages fro carrying out these two methodologies in the field. However, the PhD student has been through her first year of academic trainning now and is able to carry out field work this summer with the project director so that we can achieve specific objectives 1 and 2. We do have a list of landowners that have volunteered to participate in the project and a list of randmly selected forest landholdings we will be approaching to carry out out surveys. Efforts have been made to reach out to minority landowners, but our ability to get them involved is a bit questionable right now. Moreover, we have constinuously been working in the survey and other data collection instruments we will be implementing this summer. In the meantime, this past year,the economists in the project and a PhD student who spent a semester with us and a masters studenthave worked on understanding from a theoretical perspective the relationship between the production of carbon sequestration and water quantity as ecosystem services by forest landownersas well as the potential for payments for both services (what we call payments for ecosystems services stacking), which is related to specific objective 3. We now have a theoretical model and simulation we will be refining in the next couple of months so we can present and get feedback in conferences this summer. In a nutshell, preliminary results show that in phiographic regions and forest types where there is a tradeoff between water production and carbon sequestration (for example, when increasing carbon sequestration means a reduction in water yield or availability for human consumption), water and carbon payments (either through public policy or markets) not only would increase the value of land but could also serve as a means to manage water scarcity in places where it exist with carbon programs. The economists of the project havebeen working closely with the hydrologists and soil scientists in the project team to understand and connect their work, which also relates to specific objective 3. Accomplishments related to understanding thetrade-offs between carbon sequestration and water production (yield) include:(1) Data has been procured for both carbon and estimated evapotranspiration (ET) for forested areas that span the state of Virginia from years 2015 - 2020; and (2)We have constructed models of forest carbon and ET, and preliminary results suggest different magnitudes of tradeoffs by physiographic region. Preliminary results have been shown at theAmerican Geophysical Conference 2024 Annual Meeting and the 2024 Virginia Tech Water Research Colloquium.

Publications

  • Type: Other Status: Published Year Published: 2024 Citation: Schons, S.Z., Kurt, S., Gagnon, J. (2024). An Overview of Forest Carbon Credit Programs in Virginia. Virginia Cooperative Extension. CNRE-177P.
  • Type: Conference Papers and Presentations Status: Other Year Published: 2024 Citation: Finks, L., Mclaughlin, D., Strahm, B., Thomas, V., Shao, Y. (2024). Digging Deeper than Climate: Controls on Runoff Generation Across the Southern Appalachian Region. Poster presentation at the American Geophysical Conference 2024 Annual Meeting, December 12, Washington DC.
  • Type: Conference Papers and Presentations Status: Other Year Published: 2024 Citation: Finks, L., Gagnon, J.P, Flanagan, L. (2024). Digging Deeper than Climate: Controls on Runoff Generation Across the Southern Appalachian Region. Presentation at the American Geophysical Conference 2024 Annual Meeting, December 12, Washington DC.


Progress 01/15/23 to 01/14/24

Outputs
Target Audience:In an extension workshop lead by one of the co-directors in the project about forest carbon programs in Virginia in which we presented a forest carbon project framework for landowners and others with interest in forest carbon programs, we had 90 people in person and 192 online. Most of them were landowners and representatives from institutions such as the VDOF, among others. Changes/Problems:We have delayed the IRB process for two reasons: the main student we spent a long time trying to recruit decided last minute not to attend our program; the project director was away on maternity leave in the fall of 2023. This might entail a request for one year extension of the project in the future. What opportunities for training and professional development has the project provided?We have recruited and started twoMS students, Caio Gomes (goal 1, forest economics) and Lindsay Finks (goal 2, forest soils and hydrology). How have the results been disseminated to communities of interest?We have disseminated a " forest carbon framework" to landowners and others interested in forest carbon programs in Virginia during an extension workshop held by othe co-directors in March 2023. In this document, we provide information on the different programs available or soon to be available to forest landowners in the state that we gathered through interviews with programdevelopers. What do you plan to do during the next reporting period to accomplish the goals?In the second year of project we expect to finish designing the framed field experiments and getting it approved by VT's Institutional Review Board (IRB). We expect to implement the experiments in the summer of 2024. A new student has been recruited to work with Caio in this effort. We also expect to develop independent evapotranspiration and carbon models for the full suite of parcels within the next 6-9 months (specific objetive 3).

Impacts
What was accomplished under these goals? We have worked with the Conservation Management Institute (CMI) to identify landowner parcels and get the associated shapefiles.We have alsorandomly sampled landowner shapefiles from across physiographic and cover type strata. The sampled landowner shapefiles have been the primary subset of data that we have been using for the development of evapotranspiration and carbon sequestraion models (specific objective 3). The overallmodel'srefinement and application is ongoing. We have concentrated efforts in further understanding the current state of forest carbon programs and their contract design as we started designing the framed field experiments .

Publications