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This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Charles Harvey: Efforts to restore forests are not going to solve climate change, but efforts to restore forests will help and in the long run, it’s the best way to draw carbon dioxide out of the atmosphere.
Stephanie Kelton: Welcome to the Best New Ideas in Money, a podcast for MarketWatch. I’m Stephanie Kelton. I’m an economist and a professor of economics and public policy at Stony Brook University.
Charles Passy: And I’m Charles Passy, a reporter at MarketWatch.
Stephanie Kelton: Each week, we explore innovations in economics, finance, technology, and policy that rethink the way we live, work, spend, save, and invest. Today, we’re talking about trees. Why? Because urban trees and national forests have recently seen billions of dollars in federal investment.
Charles Passy: That’s right. Both the Inflation Reduction Act, which President Joe Biden signed into law in August of 2022, and the bipartisan Infrastructure Investment and Jobs Act of 2021 direct big piles of money toward, well, planning trees and reforestation.
Stephanie Kelton: Republicans also had their own proposal, the Trillion Trees Act, which Congressman Bruce Westerman, a Republican from Arkansas, introduced back in 2021. It was co-sponsored by then House Minority Leader Kevin McCarthy.
Charles Passy: This is Congressman Westerman, “Despite incredible improvements in technology, trees are still the most large-scale, cost-effective and environmentally-friendly carbon sequestration devices we have, and using trees to pull carbon out of the atmosphere is a plan that most Americans are on board with.”
Stephanie Kelton: According to recent polling from Pew Research Center, planting trees to reduce the effects of climate change is supported by 90% of Americans. That’s 92% of Democrats and 88% of Republicans.
Charles Passy: But why are we spending all of this money on trees and forests, and does it really work? That’s what we’re digging into, pun intended, on today’s episode.
Stephanie Kelton: So how much money are we talking about here? Our first guest is Jad Daley, president and CEO of American Forests, a non-profit conservation organization.
Jad Daley: The Infrastructure Investment and Jobs Act, also known by some folks as the Bipartisan Infrastructure Law had some tremendous investments in forest climate solutions. Then, the Inflation Reduction Act has about $7 billion of tree and forest-related solutions, and it’s not only the largest investment in forest climate solutions in US history, it’s the largest such investment in world history, so this is going to deliver change on a totally unprecedented scale.
Stephanie Kelton: According to American forests, it adds up to a total of about 14 billion across both bills. If $14 billion for planting trees seems like a lot of money, that’s because it is a lot of money. What’s the big idea behind this large scale investment?
Jad Daley: Let me make this simple, trees and forests are already a profound climate change solution. We know that they capture about 17% of our carbon dioxide emissions each year here in the United States. The great news is that we can make that go way up by investing in the right actions like planting more trees, taking care of our forests so that they can withstand the stresses of climate change and doing a better job of protecting the forest that we have. The Inflation Reduction Act and the Infrastructure Law put simply give us an unprecedented historic scaling up of all the things that we need to do to increase the power of trees and forests to help us solve climate change and to protect us from its greatest threats like extreme heat.
Charles Passy: Although Daley called the investment unprecedented, there actually is a precedent for federal investment in reforestation on a grand scale.
Jad Daley: I’m really proud that my organization, American Forest, actually helped to create the Civilian Conservation Corps. In fact, I have the pen in my office that was used to sign the CCC Bill by President Roosevelt.
Stephanie Kelton: In April of 1933, President Franklin Delano Roosevelt established the Civilian Conservation Corps, a federally-funded effort, which employed millions of Americans during the Great Depression.
Jad Daley: The CCC was actually nicknamed Roosevelt’s Tree Army because one of the things that they did was they planted about 3 billion trees over a decade. And so, a lot of the forests that we enjoy today, particularly on public lands, were actually planted by the CCC back in the 1930s. But of course, the CCC didn’t just help heal the land, it healed our economy too. It created job opportunities for people who needed them the most. We’ve done good research that shows that these funds today, like the ones I described through the infrastructure law and through the Inflation Reduction Act, can create about 25 jobs, direct, indirect, and induced jobs for every million dollars invested.
Charles Passy: Which leads us to another piece of this puzzle. In present day America, how does a big pile of money become a forest? That’s a question for our next guest.
Kas Dumroese: Hi, I’m Kas Dumroese. I’m a senior scientist research plant physiologist with the US Department of Agriculture Forest Service, specifically with the Rocky Mountain Research Station, and I’m located in Moscow, Idaho.
Stephanie Kelton: Dumroese is one of the people who’s figuring out how to transform this major federal investment into actual forests.
Kas Dumroese: The process that we’re going through right now with the Forest Service is a lot of planning, a lot of identifying and verifying where we would need to plant trees. We’re doing some assessments of our capacity to grow trees and get them established on the ground where they’re needed, having conversations with our partners about how to increase our supply of seeds that would be necessary to do a planting program, and then also thinking about climate and how we need to move forward in a way that we can ensure that these forests that we’re planting today are resilient for tomorrow.
Stephanie Kelton: All of this happens before the hard work of planting trees actually begins.
Kas Dumroese: There’s a lot of moving pieces in what people are calling this reforestation pipeline or the process of going from identifying the need to put trees on the landscape and actually getting them inserted into the ground on the landscape, and it doesn’t really even end there, because then we have to think about post planting care because these new forests that we’re planting, they’re not static. They’re evolving, growing over time. They all require some form of after planting care to ensure that the objectives that we’re trying to achieve are truly met.
Charles Passy: As you probably know, trees don’t grow overnight, so how long will it be until you see something that resembles a forest? Dumroese gave us a rough estimate and cautioned that it depends on a variety of factors, including where in the United States you’re talking about.
Kas Dumroese: Well, I’ll throw a number out there and don’t hold me to it. Let’s say 15 years, you’d have something that you could look at from a distance and say, “I think that’s a new forest emerging.”
Stephanie Kelton: Over the past five fiscal years, the Forest Service has reforested an average of 190,000 acres each year. That’s an area about the size of New York City every year.
Charles Passy: And while these initiatives today are well-funded, there’s something missing, namely, people.
Kas Dumroese: A lot of the issues around that are workforce related. We’ve got to figure out our own workforce needs. How do we meet those workforce needs? How do we find that cadre of folks who are interested in reforestation reestablishment as a career, and how do we get them to join us in this grand adventure of getting trees established?
Stephanie Kelton: A few decades from now, if the Forest Service is successful, what will America’s forests look like?
Kas Dumroese: If we’re really successful and we’re successful in all areas of tree establishment and not just putting trees back on forestland, but if we’re generally successful at tree establishment nationwide, well, your national forests would have all of their reforestation backlog met.
Charles Passy: If you’ve ever wondered what happens after a forest fire, that’s the reforestation backlog Dumroese just mentioned. It’s the amount of acreage the forest service intends to reforest, the majority of which is bare following a burn. As of April 2023, there were 3.6 million acres of national forest lands awaiting reforestation in the United States. That’s according to the Forest Service, and yes, that includes Alaska, but to put that in perspective, that’s an area of land significantly larger than the entire state of Connecticut.
Stephanie Kelton: What else might you notice if this program is a success? Back to Dumroese.
Kas Dumroese: We would see when you’re driving down the road in Nebraska, maybe you’d see some new windbreaks being grown out in someone’s field here in Wyoming. Maybe you’d see a new shelter belt being planted next to the interstate so that you won’t have to fight with the drifting snow next year.
Stephanie Kelton: In case you were wondering, windbreaks and shelter belts are plantings of trees that protect crops and livestock, prevent soil erosion and more.
Kas Dumroese: We might see less open space in our urban centers and maybe more tree areas just because we could take care of some of that open space urban areas and put more tree canopy over that for folks to enjoy. One would hope that you would be able to see more trees on the landscape in a variety of different ways.
Charles Passy: When we’re back, we’re thinking about forests where you’d least expect to find them. Plus, we’ll consider whether or not reforestation is really a key remedy for climate change. That’s after the break.
Stephanie Kelton: Welcome back to the Best New Ideas in Money. Before the break, we heard about the federal government’s massive new investment in forests and the infrastructure required to turn that money into trees.
Charles Passy: Now, when you think about forests, you probably don’t think of cities, but in a warming world, trees are going to play an increasingly important role in cities. Why? Let’s go back to Jad Daley, whom we heard at the beginning of the episode.
Jad Daley: By far, the biggest public health threat from climate change is extreme heat. Extreme heat today kills more than 12,000 people in America each year. We have strong science from Duke University projecting that extreme heat will kill nearly 100,000 people per year in the United States by the end of this century. There’s no other type of extreme weather that comes close to the direct public health threat of extreme heat.
Stephanie Kelton: Hot days are even hotter in cities because of what’s called the urban heat island effect. Think about it like this. Whether you live in a city or in the country, you’ve probably noticed that on a hot day, a park will be cooler than a parking lot. Now, if you imagine a lot of buildings and a lot of parking lots, it’s a lot warmer. That’s the urban heat island effect, and it happens because different environments respond in different ways to heat and sunlight. Pavement and built environments tend to absorb heat, whereas plants have what you can think of as built-in air conditioning.
Charles Passy: That natural air conditioning is a result of a process called transpiration or how plants absorb water through their roots and evaporated through their leaves. Here’s where you start to see serious benefits. The Environmental Protection Agency has found that transpiration alone or in combination with shading can reduce peak summer temperatures in cities by two to nine degrees. Let me tell you, on a New York City summer day, that could be really significant, but let’s get back to Daley.
Jad Daley: Let me give you some top-line numbers to explain just how valuable trees are as providing natural air conditioning. The US Forest Service did an analysis, and it found that on average, trees reduce household energy use for heating and cooling by 7.2%, saving homeowners over $7 billion per year. You think of trees as essentially our natural energy efficiency. To be very clear, we want everyone to be safe in heat waves, and so we’re going to have to have more air conditioning as part of that. We’re going to need to help people build more heat-resilient homes as part of that, but one of the ways that we can minimize the amount of energy that we have to use in keeping people cool, and both the money that we spend on that air conditioning as well as the greenhouse gases that we generate in producing that air conditioning, while trees reduce essentially the cooling load that’s necessary.
Stephanie Kelton: Put another way, that means trees can cool cities down substantially, even during the dog days of summer. Big picture, what’s the return on investment on trees in cities?
Charles Passy: Back in 2005, researchers at University of California Davis looked at a handful of cities across the United States. They found that while these cities spent an average of $13 to $65 annually per park and street tree, they derived benefits from these trees of $31 to $89 per tree. Furthermore, for every dollar invested in tree management, annual returns range from $1.37 to $3.09 and 37% to over 200%. Yeah, that’s a pretty decent ROI. Let’s get to the trillion-dollar question, is reforestation the solution that will fix climate change?
Charles Harvey: Efforts to restore forests are not going to solve climate change.
Stephanie Kelton: That’s Charles Harvey, a professor of Civil and Environmental Engineering at MIT.
Charles Harvey: The one thing we know we have to do to solve climate change is stop emitting carbon dioxide from fossil fuels, but efforts to restore forests will help, and in the long run, it’s the best way to draw carbon dioxide out of the atmosphere, what we call negative emissions.
Stephanie Kelton: Why? It starts with what trees are made of.
Charles Harvey: So what are trees made of? A lot of people who should know better get this question wrong. If you ask someone, what is the material in a tree? Is it material that’s drawn up by the roots? Are the trees essentially feeding on the soil and then accumulating that to grow as a tree? A lot of people say, yes, that’s what trees are made of. There is a little bit of that, but the truth is most of the material in a tree is carbon that’s drawn out of the air. It’s carbon dioxide drawn into the leaves and through photosynthesis, converted into wood, leaves, and the organic carbon in a tree.
Charles Passy: Forests, of course, are composed of trees, some of which are growing and others of which are dying and decaying.
Stephanie Kelton: It’s all part of what’s called the carbon cycle, if you remember your high school biology. Here’s Harvey.
Charles Harvey: So the carbon cycle is the key to life on earth. It’s through photosynthesis, drawing carbon dioxide out of the air that sunlight, energy, is incorporated into plants. Then, all the way up the food chain, all the energy that enables everything that eats the plants from insects to microbe, all the way up to us, is that sunlight, energy. We use it, and then we use it by oxidizing the carbon back to carbon dioxide and putting it back into the air. Then, it so happens that the carbon dioxide in the air is a greenhouse gas, meaning that if concentrations increase, the earth temperatures increase just like glass increases the temperature in a greenhouse.
Charles Passy: But why is it so tempting to think that planting trees alone can fix this massive problem? We asked Harvey.
Charles Harvey: Maybe it’s tempting because that sounds a lot less scary than not burning fossil fuels to some people, and planting trees, there are very few people who hate trees. You’re not going to have a lot of argument against planting trees, and you should. It’s a good idea.
Charles Passy: Despite that big asterisk, meaning forests can’t solve climate change without emission reductions, trees may be the best solution we have to get the carbon we’ve put into the atmosphere out of it. So why aren’t we hearing more about that? Here’s Jad Daley.
Jad Daley: We really tend to see two barriers to people embracing that incredible opportunity. The first is sometimes it just feels too obvious, feels too simple. We’ve trained ourselves to believe that climate change is about technology. It’s about something that hasn’t been invented yet. It’s about electric cars and all the things that are cutting edge, and absolutely, those are huge parts of the climate change solution, but we’ve had one of the solutions with us all along. Just because it’s old, doesn’t mean that it isn’t really, really important.
But I think the other part of it that we see again and again is people are worried that we are going to use trees and forests as an excuse for not taking other needed actions to slow climate change. We need it all. We need to reduce fossil fuel use and other sources of carbon emissions and other greenhouse gas emissions, but the science is super clear. We cannot get there without using nature. Nature has to be part of it. Trees and forests are the most powerful part of nature-based solutions, and so we feel really strongly that it’s a both end situation. Once people know that that’s what we mean, poll numbers show there’s overwhelming support for taking advantage of this natural climate solution hiding right in plain sight.
Stephanie Kelton: Thanks for listening to the Best New Ideas in Money. You can subscribe to the show wherever you listen to podcasts. If you like what you heard, please leave us a rating or review. And, if you have ideas for future episodes, drop us a line at bestnewideasinmoney@marketwatch.com. Thanks to Jad Daley, Kas Dumroese, Charles Harvey, and Ashley Ward. To learn more about reforestation, head to marketwatch.com. I’m Stephanie Kelton.
Charles Passy: And I’m Charles Passy. The Best New Ideas in Money is a podcast for MarketWatch. The producers are Michael McDowell, Mette Lutzhoft, and Katie Ferguson. Michael McDowell mixed this episode. Melissa Haggerty is the executive producer. Nathan Vardi was our newsroom editor on this episode. The Best New Ideas in Money theme was composed by Sam Retzer. Stephanie Kelton is an economist and a professor of economics and public policy at Stony Brook University, and not part of the MarketWatch Newsroom. We’ll be back next week with another new idea.
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