Green Wombat

photo: green wombat
Bank of America CEO Kenneth Lewis appeared in a redwood grove in downtown San Francisco today – the urban redwoods are planted next to the Transamerica Pyramid – to announce a first-of-its kind deal: the bank is providing 100 percent financing to the non-profit Redwood Forest Foundation to acquire 50,635 acres of redwood timberlands on Northern California’s Lost Coast. The acquisition is part of BofA’s (BAC) $20 billion green lending initiative. What makes the $65 million deal unique is that the foundation will continue to log the Usal Redwood Forest in Mendocino County, albeit on a much reduced scale and in conjunction with the restoration of the forest ecosystem. The foundation, which is buying the land from the Hawthorne Timber Company, will sell a conservation easement to ensure the forest remains intact in perpetuity and to pay down the debt it owes BofA. "We think this is an exciting new paradigm," said Redwood Forest Foundation president Art Harwood (pictured above at the podium with Lewis at left and foundation executive director Don Kemp at right). "Thanks to the flexible financing, we can delay logging operations until the forest is silviculturally and biologically ready." Logging will be limited to a maximum of three percent of the forest a year and profits from timber sales will be reinvested into the local economy, Harwood said.

This is a landmark in enviro-capitalism on several fronts. During the 1980s and 1990s bitter timber wars raged across Northern California as environmentalists fought the timber companies’ plans to log much of the remaining old-growth redwoods left in private ownership. Green activists took to the trees to block logging while their attorneys waged  legal campaigns in the courts. Green Wombat spent much of the ’90s chronicling the timber wars as a newspaper reporter, and back then it would have seemed ludicrous that enviros and a timber company could reach an agreement to buy a forest while permitting continued logging – all financed by the nation’s second largest bank.

But times have changed. These days the threat to redwood forests is not so much from clear-cutting but from subdividing, said Pete Mattson, a foundation board member and chairman of the Sonoma Land Trust. Timber owners increasingly are finding it more profitable to sell off pieces of their land to developers than to log. "I’ve been anti-logging for a long time," Mattson told Green Wombat. "But now I’ve come to see that logging is critical to preserving forests and keeping wildlife corridors intact."  The Usal Redwood Forest is second-growth timber land, meaning it has been logged over and probably would not be a candidate for preservation with public money. But by managing the forest for conservation and limited logging, the foundation will maintain a large redwood ecosystem while supporting local timber mills and permitting the land to regenerate.

"This transaction will stop fragmentation and allow the coastal redwoods to grow and provide carbon sequestration," said BofA’s Lewis. He emphasized that the bank will make money on the deal, though it is giving the foundation a discounted interest rate on the loan. "It’s a commercially viable rate of return," chimed in Don Kemp, the foundation’s executive director. And as Lewis noted, a growing forest absorbs CO2, generating marketable carbon credits.