Weyerhauser, our largest landowner, uses carbon offsets to boost its stock and real estate; logging practices remain

Weyerhaeuser Co. says trees in its Northern timberlands are harvested at 54 years of age, which on average
is 25 years older than fast-growing pine trees in the South. (Photo by Tristan Spinski, The Wall Street Journal)

Faster than any beaver, Weyerhaeuser Co. "has cut down more trees than any other American company . . . Environmentalists have long treated it as an enemy. . . . The new math of carbon emissions enables the lumber producer to cast itself as something quite different: a force for environmental good," reports Ryan Dezember of The Wall Street Journal in a story headlined, "America’s Most Prolific Logger Recasts Itself as Environmental Do-Gooder."

Weyerhauser's "10.6 million acres of U.S. timberland act as a giant sponge for carbon dioxide, which Weyerhaeuser says more than compensates for the greenhouse gases it emits by felling trees, sawing them into lumber and distributing wood products." The Arbor Day Foundation says that in one year, a mature tree will absorb more than 48 pounds of carbon dioxide from the atmosphere and release oxygen in exchange. With that in mind, even though "Weyerhaeuser plans to increase lumber production 5 percent in the next few years, it says its net carbon footprint is negative—so much so that it is offering carbon-dioxide storage capacity to other companies," Dezember writes.

Not everyone accepts Weyerhaeuser's calculations. "Corporate executives and scientists who have criticized the carbon-offset market say the offsets sold by timberland owners allow other companies to pay a relatively small price to avoid reducing their emissions," Dezember explains. "They also say forest-preservation pacts that produce offsets often don't substantially change logging practices, which means they essentially pay timberland owners for behaving as they would anyway. . . . Potential buyers have begun demanding that offsets represent actual reductions in planned tree-cutting, and sellers want higher prices to justify lost logging income."

To put the company in perspective, Dezember reports, "Weyerhaeuser is America's largest private landowner. . . . Altogether, its trees cover an area roughly twice the size of New Jersey. Weyerhaeuser says those trees remove about 14 million metric tons of carbon dioxide from the atmosphere each year. . . . Weyerhaeuser produces about 950,000 miles of lumber a year . . . . The company takes credit for an additional 11 million tons of carbon held in lumber ... which wouldn't be the case if a tree fell and decayed on the forest floor."

The company wants such good to increase its value. "A recent corporate reorganization at Weyerhaeuser created a 'Natural Climate Solutions' unit," Dezember reports. "Weyerhaeuser hopes its climate unit will persuade investors that its land—and its shares—should be valued higher and that it is an attractive stock for investors motivated by environmental concerns. . . . Albert Chu, a portfolio manager at Newton Investment Management who specializes in natural resources, said the firm's stock pickers are rethinking how they value timberlands and trees. He said carbon values will become a bigger part of the equation, but for now, decisions to invest in forestry stocks remain based on wood demand."

Dezember reports, "Jerry Franklin, professor emeritus at University of Washington's School of Environmental and Forest Sciences, reviewed Weyerhaeuser's carbon disclosures and said the company doesn't grow trees long enough to maximize carbon sequestration and that its single-species tree farms in the Northwest and South don't offer the same environmental benefits as natural forest ecosystems." Franklin told him, "What they would like to do is to be paid additionally for what they're doing already."