What is the new forest economy?

How landowners can realise the true value of their forests

“Kids, I got bad news” started the father of my friend. “I need to cut and sell half of our forests to cover the house renovation costs. We will plant new trees, but you will not see any money for that. The trees will be cut when you are gone, your kids will get it.”

Well, my friend and her brother are fully grown adults and can take care of themselves. But still, the story resonated, enough for her to share this and for me to get thinking.

Timber is the only revenue for the landowner. While forests provide so much more than just timber, the landowners are not being rewarded for that. If a new endangered species are being discovered in a forest all the owner will get is restrictions. At the same time, they provide great value to the planet. Also, trees sequester carbon every month while they grow. Any revenue for that? Not at the moment.

Well, this does not sound fair.

So we decided to change that and founded Arbonics. To bring income to the landowners for the great value they provide for our planet. We call this the New Forest Economy - we need to rethink how we manage forests.

How does this work?

Here is Petteri from Estonia. He has 14 hectares of land. How can he enter the new world of forestry?

As you can see below, some of that is empty. Our software shows to Petteri that 7.7 hectares of that area is suitable for afforestation.

He can plant trees there and the additional carbon and biodiversity that is being added can bring him 23 700 euros of additional income over the 50-year contract period. That is also the time it takes the trees to grow and does not limit the timber income after that time.

Secondly, as can be seen on the map, marked as a red area, 5.5 hectares of Petteri’s land is covered in forest.

Although this 30-year-old forest can soon be cut as well, we can provide Petteri with another option. Instead of clear-cut he can cut in smaller batches (10% after 10 years) and keep the forest alive for a long time.

The total carbon stored will increase and this will also be a huge win for biodiversity. Although he will lose some timber revenue, he can earn close to 30 000 euros over the next 25 years for the value he provides for the planet. Also, Petteri can earn extra income if the wood cut will be used in wooden products. That way we will be still storing the carbon.

This seems rather simple, doesn’t it? And it should be as simple as that for the landowner. There’s a lot of very complex stuff that needs to happen in the background – from data to verification to making the product suitable for credit buyers. We are taking care of all that. But the tools for the landowner should be as simple as that.

If we succeed, landowners can make the most of the opportunities in the new forest economy. And there will be more forests for us all.