Recently in Incentives Category

Allow the Volumetric Ethanol Excise Tax Credit to Expire

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Amazingly, there is bipartisanship. Won't write home on it though. A coalition of congressman wrote a letter supporting an end to energy subsidies by allowing the subsidies to expire at the end of the year. Specifically, they mention ending the $6 billion a year subsidy to gasoline refiners who blend corn ethanol into gasoline. What will be scraped is the 45¢ per gallon Volumetric Ethanol Excise Tax Credit (VEETC) and the 54¢ per gallon tariff on imported ethanol. Essentially the argument is: "at a time of spiraling deficits, we do not believe Congress should continue subsidizing gasoline refiners for something that they are already required to do by the Renewable Fuels Standard."

I think this is a great move. Corn based or 1st generation ethanol as its known is not good economically or environmentally. I don't think it will affect development of 2nd generation biofuels but the whole state of biofuel development from cellulosic ethanol is a mess.
 

Questions for the Biomass Crop Assistance Program

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You have probably heard of the Biomass Crop Assistance Program. Read this article to find out more. Its a great subsidy - a $1 for $1 payment up to $45/ton

Key points from my perspective:

- Will it jump start new producers (as its supposed to) or help the established ones who would not need the subsidy anyway.
- will it focus on perennial (as its supposed to) or annual crops.


Minnesota start Biomass exchange

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Looking for a place to buy or sell biomass. Look no further. Its called the MBioEx and hope to facilitate biomass activities Minnesota. Its seems like a good idea especially when there is concern about biomass supply (ie quantity at a given price). These is plenty of biomass out there in PA and in Lake States but the question is are landowners willing to sell it. The Exchange will also assist in the producers with the Biomass Crop Assistance Program (BCAP) . BCAP offers support of up to $45 a ton for biomass sent to qualified biomass conversion facilities

PA inheritance tax revenue tops in nation

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Transfer taxes on forestland impact current and future landowners decisions. This article has some interesting tidbits about PA's tax burden with respect to its Inheritance tax. Most states (41 of 50) have followed the Federal lead and have disbanded their state inheritance taxes. Albeit the Feds are quite there yet.

  • "2.5 percent of Pennsylvania's 2008 revenue came from "death and gift" taxes, the highest percentage of any state"
  • "Pennsylvania has the 11th-highest tax burden in the country, with tax revenues representing about 10.2 percent of household income. The national figure is 9.7 percent"
So if we are to use tax incentives to address forest sustainability then we need some state tax reform not only in 'death' taxes but with property taxes - AKA Clean and Green.  At least some legislators are talking.

EQIP coming to a region near you

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Forest landowners after cost share for forest management activities need to look to the Natural Resource Conservation Service (NRCS) who hold the monies thanks to the latest Farm Bill (it used to be the USDA Forest Service dealing in this). I went to a meeting on this and had more questions then answers. There is $500,000 available in the Environmental Quality Enhancement Program (EQIP) for private forest management in PA this year. You need to be in one of 4 regions to get monies. See NRCS website for more details. If you not in one of the 15 counties in these regions I believe you probably out of luck. I would also suggest looking the ranking criteria and the targeted conservation practices. NRCS are just getting going on forest related cost share (their expertise is agriculture). I'm concerned about how the monies will be allocated because of my perception of limited pre-planning and that the monies need to get spent this year.

Soils and Working Woodlands

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The winter Allegheny Society of American Foresters (SAF) meeting was just held here in State College. Between teaching, I heard a few interesting talks. Two in particular - one on the big picture (= macro) and the other on soils (= micro). The big picture was given by Dylan Jenkins of The Nature Conservancy who discussed an interesting new approach to forest management in PA called working woodlands. I checked his website but its under construction, so stay tuned. The thrust is helping private forest landowners (over 100 acres) to develop working landscapes using all available tools such as tax incentives, easements, certification, EQIP, carbon credits, etc. Its early in the concept and the first I heard of it. My initial take is that its too ambitious but a step in the right direction. We need direction! Lets hope he gets buy-in from the forestry community. The 2nd talk of interest was on soils - specifically acid deposition reducing soil pH. How has acid rain mainly from power plant emissions in the midwest affected forest soils and hence tree growth and sustainability? It was given by Patrick Drohan a prof in PSU's soil science dept. I needed a dose of chemistry and basic science. Of course, thanks to 40 years of data and the Clean Air Act amendments (cap and trade in particular) we have substantially reduced acid rain but there is still an active debate on the role acid rain in forest stress - for instance is it a primary factor in maple decline (our Northern Hardwoods Sugar Maple) - see the Forest Service Research for more info.   

What private forest landowners need to know

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Should private forest landowners in PA, or anywhere for that matter, be versed or trained in forest management? I was recently reading about this in Europe where countries are thinking about requiring training for forest landowners if they are to receive financial incentives. It is happening for farmers in those countries. We in the education business think it's great for forest landowners to be knowledgeable about their land. Too name a few, education could lessen the negative impacts of timber harvests, improve landowners' investments and reduce their tax burden. Does a landowner need to know about tree volume tables and silvicultural practices?  Using an analogy - do homeowners know the intricacies of their plumbing systems? Sure if they want to, but it's not mandatory. Is not that the role of a plumber or for forestry, hiring a forest consultant? But if it can work in Europe, why can't it work here?  In Europe there is a long legacy of attachment to working the land - especially in the forest rich countries of Scandinavia. However, my colleagues their will note that this is changing as young inherit land and move to cities. I think a larger problem is our much more diverse set of landowners and the enormous degree of differences in objectives. In Ireland over 80% of the landowners have timber production as their primary goal. That was less then 10% in the U.S. according to the Forest Service. The Forest Service survey shows 8 other objectives for owning land as more important then timber production and none of them dominate statistically as the single most important reason. Perhaps training more homogeneous groups with similar objectives could work.