Lawmakers proposed legislation last week that set a goal for the United States to support planting one trillion trees by 2050 globally to address climate change. Trees absorb and store carbon dioxide from the atmosphere, and the bill is touted by its sponsors as a way to lower atmospheric carbon, plant forests, and add jobs. How might this bill affect the U.S. timber industry?
For context, forest owners and managers plant about 1 billion tree seedlings annually in the U.S. South alone. The Trillion Trees Act calls for planting 33 billion trees per year for the next thirty years. That’s a lot of trees!
We have experience with forestry-related government incentive programs. And we already plant a lot of trees. Figure 1 below shows acres of trees planted in the U.S. South since the 1940’s. The first surge in planting activity in the 1950’s corresponds with the federally financed Soil Bank Program, which was a voluntary land retirement program for cropland. The second wave of activity in the 1980’s ties to the Conservation Reserve Program (CRP), in which the U.S. Department of Agriculture incented landowners to plant trees on former fields and agriculture lands. The effects magnified each other, as a major decrease in harvesting activity during the economic recession of 2007-2009 fed already strong forest inventories planted 30 and 60 years ago. These combined activities resulted in timber “oversupply” across the South as reflected in low and less responsive timber prices, although some local timber markets are becoming more balanced.
The bottom line for U.S. forest owners: based on our experience with previous government incentive programs, The Trillion Trees Act would not be a boon for U.S. forest owners. In fact, taken to the extreme, if it massively increased planting in the South, it would exacerbate the timber oversupply issue that plagues many timber markets in the region.