Nils von Schmidt, Co-Head Agriculture & Forestry, Colliers
One of the keys to become carbon-neutral and more sustainable is grown in the woods. Climate change requires us to alter our built environment, to phase out steel and concrete and to use low-carbon-emission products. We need to further rethink the use of materials, move from linear processes to a more circular use of our natural resources. And thirdly, we need to apply a sustainable concept of land use, halt degradation, conversion and soil loss. All three sectors, built environment, materials and land use, are strongly linked to forestry. Forests not only absorb and sequester carbon, but transform same into the renewable raw material wood, which has multiple uses – and growing.
Forests as a carbon sink
Forests can sequester large amounts of CO2. Germany's forests sequester approx. 62 million metric tonnes of CO2 each year. New wood products from these forests store an additional 28 million tons of CO2 every year. The combined carbon sink of forests and wood products is thus around 90 million tCO2e, corresponding to about 11 percent of annual greenhouse gas emissions in Germany. Although forests make up only about 30 per cent of Germanys land area, they are extremely important towards climate change.
Forests store most of the carbon in above-ground biomass, i.e. trees. Soil carbon however also is an important sink - even more so in organic soils such as moors and bogs. Agriculture also has the means to store carbon, but that is limited to the soil and thus has less potential on a per hectare basis than a forest.
Forests under pressure
Due to climate change and over the past five years, Germany has lost approximately 500,000 hectares of forest, corresponding to about 5per cent of its total forest area. These forests were incapable of coping with climate change and need to be replaced by new forests with mixed species, that are more resilient.
It is important to reforest these vast areas as soon as possible, since climate change does not stop and time is of the essence. However, there is a large funding gap of 2-3 billion EUR to pay for the necessary reforestation efforts. Private forest owners do not have the financial resources at present and state funding is insufficient. That is why Colliers has developed carbon forestry projects and successfully tapped another source of capital: foresighted real estate businesses on their way towards carbon-neutrality. These projects generate high-quality carbon certificates, verify sustainable forest management through certification and strongly comply with ESG criteria.
A mixed forest in Oberammergau, Germany, in bright autumnal foliage
Renewable energies and the forest
Some of the devastated areas of Germany’s forest will become solar or wind farms. This certainly requires an assessment of environmental impacts aforehand, but also forms an important means to become more and more independent of fossil fuels. In general, wind turbines are very compatible with forestry as they consume very little area and todays hub heights are far above tree tops. Photovoltaics are less likely in forests as they cannot co-exist with forestry as easily due to area requirements and opacity. This however, is much more easy to combine with agriculture, were intercropping is possible.
Should we leave the forest to its own devices?
The concept of sustainability has been amended over the years, but originally stems from forestry. It is thus not surprising to find forest management heavily geared towards this overarching concept, acknowledging all the different ecologic, social and economic functions of a forest. If we looked at forestry from a carbon angle only, it is important to understand why managed forests store more carbon than forests that are left to themselves. An unmanaged forest will grow in timber volume as trees grow bigger and accumulate carbon stored in the timber. Alike humans, old individuals will cease to grow and a maximum carbon per hectare will be reached. This maximum is typically higher than in managed forest. However, managed forests feature younger trees, that are continuously growing year-on-year, while timber is extracted and older trees are replaced by younger ones. Hence, even though a managed forest has less carbon stored per hectare, it maintains timber growth and carbon storage at a much higher pace and transforms carbon from the forest sink to wood products. And if we did not use wood products as all forests were unmanaged, how could we think about transforming the built environment and use of materials?
Forests are undervalued
Interestingly, the multiple functions of forests are common knowledge. We know that forests produce timber, sequester carbon, protect biodiversity and water resources, purify air and water etc.. Yet, the economic value of these functions is not as commonly known, although science has been researching and quantifying same for decades. Despite these facts, forests are still valued mainly based on their productive function, their ability to produce timber, and as such they form a truly undervalued resource.
About the Author
Nils von Schmidt is Co-Head Agriculture & Forestry at Colliers.
