Purpose
- Investigates the causes of economic imbalances.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.

Summary

In 2025 and 2026 CSE seeks support to extend our work on forest carbon pricing and market-based solutions to deforestation and forest degradation by (1) advocating for a no-net-forestland-loss policy in key land use planning processes; (2) continuing to publicize and disseminate our peer reviewed paper and model legislation for a forest carbon tax and reward program; (3) researching and advocating for carbon border adjustments both in the US and internationally that include a price on forest carbon; (4) building strategic alliances with wood alternative industry leaders to help combat logging subsidies and timber industry disinformation, and; (5) defending and extending legal victories holding public agencies accountable for the social cost of forest carbon emissions under state environmental policy acts.


In a new report, CSE has found that clearcutting boreal forests in Canada to manufacture toilet paper in the US makes no economic sense since the economic damages far outweigh the financial benefits.

Description

Project update March 2026:

First climate impact assessment ever for Washington Department of Natural Resources (DNR) timber sales:

In response to our successful litigation under the State Environmental Policy Act, DNR is now finally making a move to incorporate climate impacts into its environmental analysis of logging projects. Appendix B to the Tuckered Out timber sale in King County is the first time anywhere in the country where climate change impacts - including negative external effects like landslides - have been addressed in individual public lands logging proposals. While we have some serious issues with how this analysis was completed, it nonetheless is a groundbreaker and now that we have partially won the appeals court stage of this litigation (see below) we will take this ball and run with it to ensure that all sales, not just this one, benefit from such analyses. Importantly, and as we have argued, the “no action” alternative scores highest on carbon accumulation over 50 years.

Ecosystem services bill introduced and moving forward in Washington:

Another key issue in our litigation is DNR’s failure to consider alternatives to logging mature, carbon rich forests, such as selling ecosystem service credits on the conservation market. DNR believes that they need new authority to do this (we disagree), but nonetheless the legislature is weighing in now and has proposed this new legislative approach: HB 2170. This will go a long way towards improving free markets by allowing alternative uses of the land to fairly compete with timber. At this point it is unclear if HB 2170 will be enacted this term or the next, but CSE will keep a close eye on it in the months ahead and report back.

Major appeals court victory requires DNR to consider climate smart alternatives:

On February 17th we received news that we have won a major portion of our appeals court litigation on the Wishbone Timber Sale. Details from our press release follow.

FOR IMMEDIATE RELEASE 2-17-26

For the third consecutive time a Washington court has ruled that the Department of Natural Resources (DNR) must study alternatives for reducing climate damages associated with logging mature ‘legacy’ forests on state forestlands. In a unanimous decision, the Division One Court of Appeals affirmed King County Justice Kristin Ballinger’s May 2024 ruling that DNR violated the State Environmental Policy Act (SEPA) by failing to consider alternatives that include setting aside the mature, structurally complex components of its timber sales as forest carbon reserves, limiting logging to variable density thinning of younger plantation trees, building no new roads and earning revenues from carbon markets.

According to Dr. John Talberth, President and Senior Economist at the Center for Sustainable Economy (CSE), “Three strikes and you’re out should apply in this situation. Instead of ignoring court orders, DNR now has a clear responsibility from a higher court to do what the law requires and begin to scale back the senseless destruction of century-old forests at a time when we need those trees to stay on the land to capture and store carbon at a rate that surpasses nearly every ecosystem on Earth. This means looking for reasonable, climate smart alternatives to every timber sale.”

In its Opinion, the Court did not agree with plaintiffs Center for Sustainable Economy, Save the Olympic Peninsula and Legacy Forest Defense Coalition about the need to do a site specific analysis of climate impacts, but did agree that the alternatives analysis is required because clearcutting big old trees that are just now entering a period of maximum carbon sequestration precludes their use as forest carbon reserves that can pull carbon out of the atmosphere for centuries.

In its precedent setting decision, the Appeals Court found that "Certainly, cutting down the trees precludes their use as carbon reserves, which is not just a theoretical use. We conclude that the alternatives analysis under RCW 43.21C.030(2)(e) applies to the Wishbone Timber Sale." The Court also dismissed DNR's claims that its generic environmental checklist (which still excludes climate impacts) is somehow related to an alternatives analysis. The Court found that "DNR claims, with no supporting authority, that the environmental checklist is an accepted form of alternatives analysis under RCW 43.21C.030(2)(e) because its purpose is “to reduce or avoid impacts from the proposal, if it can be done.” See also WAC 197-11-960. We reject this argument because doing so would render RCW 43.21C.030(2)(e) superfluous and allow DNR to disregard alternative uses proposed during the comment period."

# END

Since that ruling was issued, DNR has essentially withdrawn every major timber sale that proposes logging of structurally complex native forest and is busy doing the requisite alternatives analysis, albeit with a bias against selecting the climate smart alternative. This represents a new, but important front in our legal efforts because now we need to make the case – on grounds such as the social cost of carbon – that that climate smart alternatives is actually the best from a public interest standpoint.

Project update 11-30-25:

CSE’s US Forest Carbon Pricing Initiative continues in full swing in 2025 thanks in large part to the sustained investments we have received from the Alex C. Walker Foundation. We are one of the only forest conservation organizations in the nation using environmental economics to make the case for a halt to deforestation and forest degradation as a tool for achieving climate stability, reversing the extinction crisis, and diversifying rural communities that remain trapped in the ‘resource curse’ of unsustainable industrial logging activities. Key outputs thus far in 2025 include:

July: Report – Boreal forests down the toilet. A preliminary analysis of greenhouse gas emissions associated with clearcut logging on the Trout Lake and Wabigoon concessions, Ontario, CA. In this report CSE provided one of the first life cycle assessments of carbon emissions associated with the manufacturing and export of pulp to the United States that is used to make tissue paper and paper towels. This is the most wasteful use of productive forestlands that would otherwise be removing significant quantities of carbon dioxide out of the atmosphere and supporting a wide range of subsistence and recreational uses of these forestlands by First Nations people and the recreation and tourism sector in Ontario.

The report found an extremely high carbon intensity of production. The total GHG emissions associated with clearcutting on the two concessions and manufacturing wood chips to pulp at the Dryden Fibre Canada mill are nearly 3.8 MMT CO2-e each year. This is equivalent to 11.6 tCO2-e for each ton of wood pulp produced by the mill and the annual emissions from 824,000 gas-powered passenger vehicles. At the minimum estimate for the social cost of carbon (~$148 per tCO2-e) this translates into over $560 million a year in climate damages and is equivalent to about $0.19 for each toilet paper roll eventually manufactured from the pulp and a minimum of $1,715 per ton of Northern Bleached Softwood Kraft exported, which is more or less in line with its current export price. As such, in this case, we found that any financial benefits associated with the export of pulp from boreal forest clearcutting in Ontario are likely to canceled by just this one externality.

July: Editorial published in the Washington Times - When a 100% tariff is justified: Canadian pulp should be addressed in renewed trade talks. Based on the findings of the boreal forest report, CSE published this opinion piece in the Washington Times, a conservative news outlet, with the hopes of bringing some common sense into the ongoing tit for tat battles over trade and tariffs. We make the case for basing tariffs on carbon – or border carbon adjustments – rather than the chaotic tariff and counter tariff regime now in effect. With respect to pulp and paper, BCAs would make markets more efficient by internalizing the social costs of paper products made from wood and leveling the playing field for non-wood suppliers, such as US farmers supplying agricultural wastes for tree free paper, who now face unfair competition from subsidized wood products such as pulp from boreal forest clearcutting.

August: Editorial published in the Port Townsend Leader – Time to get Washington DNR out of the logging business. As part of CSE’s efforts to advance the forest carbon tax and reward policy, CSE published this piece in the Port Townsend Leader providing details on how such a policy can free up Department of Natural Resources (DNR) lands for other uses – like recreation and carbon sequestration – while generating all of the revenues needed to make beneficiaries of DNR’s logging program whole. In particular, our 2024 peer reviewed publication (published in the journal Environment, Development and Sustainability), found that a modest forest carbon tax on industrial logging operations could raise up to $213 million a year while maintaining industrial forestlands as a lucrative investment. This is more than enough to compensate all of the counties and tribes now receiving money from the sale of DNR timber.

October: SEPA lawsuit hearing and press. CSE remains the only organization in the country, and perhaps the world, that has successfully sued to force public agency decision makers to account for the climate damages associated with clearcut logging. We have won twice in Washington state at the superior court level, but DNR chose to appeal the rulings rather than comply with them. At an appellate court hearing in late October, we were encouraged by the justices’ questions to DNR about why they feel they do not need to consider alternatives to logging – like entering carbon markets – when the requirements of the State Environmental Policy Act (SEPA) are very clear on that point. Subsequently, we received excellent news coverage of the hearing in the Everett Herald.

November: SEPA and NEPA challenges to damaging timber sales. Encouraged by the appeal hearing, CSE has now rebooted its systematic challenging of all DNR and federal timber sales that involve clearcutting and road building in mature naturally regenerated ‘legacy’ forests. We are arguing that a full climate impacts analysis needs to be completed and that alternatives, like conservation leasing and carbon offset payments, need to be carefully considered. It is our hope that with a favorable outcome at the appellate court level, we will be in a position to request preliminary injunctions against these sales before they are sold. In just three weeks, we have filed new challenges to timber sales that encompass over 3,000 acres.

November: Policy victory - Oregon EO 25 – 26 and no-net-loss. For several years, CSE has been advocating for a no-net-loss policy on forestlands that mirrors the compensatory mitigation program for the nation’s wetlands administered by the Army Corps of Engineers. The concept is simple: to maintain or rebuild the carbon sequestration capacity of the landscape, every new project that involves paving over or destroying forestlands should have as a mitigation requirement the protection or restoration of a functionally equivalent amount of forestland elsewhere. Functional equivalence would be based on carbon sequestration. The no-net-loss wetlands policy requires more than a 1:1 replacement to account for uncertainty, and if this were applied to forestlands it would result in a steady and perhaps increasing stock of protected forestlands that will capture carbon for decades.

In early November, Oregon Governor Tina Kotek issued Executive Order 25 – 26, which to our surprise, included the compensatory mitigation approach as something agencies that have jurisdiction over natural and working lands to pursue. This provides our first major opening on the no-net-loss policy and CSE will be providing expert input into the EO 25 – 26 process as it unfolds over the next year.

Purpose

Climate change has been referred to as the most spectacular market failure ever. The market’s failure to incorporate the costs of climate change into prices of wood and paper products supports a tremendous level of over-production, over-consumption, and wasteful uses of these commodities. Putting a price on high-emissions logging operations is a critical market-based solution for internalizing the catastrophic costs associated with climate change and rebalancing markets to support efficient use of energy resources, forestlands, and wood products. With respect to forestlands, CSE has pioneered the development of several market-based policy interventions that decision makers can use to help expedite the transformation of industrial forest practices to climate smart alternatives. These include forest carbon tax and reward, subsidy reform, cap and invest, no net loss and climate resiliency plans for large owners.

Scope

We are working at the federal level by participating in new regulatory processes initiated by the Biden-Harris Administration via Executive Order 14008, Executive Order 14072, and the new US pledge to end deforestation and forest degradation by 2030. Despite being rescinded by President Donald Trump the processes initiated by the executive orders nonetheless are continuing with IRA funds that cannot be recalled and thus require our engagement. There are also a slew of new threats to US forests caused by the Trump Administration’s executive orders and resetting of federal agency priorities. Although limited, we do envision working at the federal level to push back against these emerging threats. We are also working at the state level in parallel executive-order processes, primarily in the states of Maine, North Carolina, Washington and Oregon.

Information Dissemination

Results and findings from our work will be disseminated widely on various forest conservation listservs, in earned media, in opinion pieces, and through in-person meetings with key decision makers.

Project Link https://www.washingtontimes.com/news/2025/jul/8/100-tariff-justified-canadian-pulp-addressed-renewed-trade-talks/

Amount Approved
$50,000.00 on 5/31/2025 (Check sent: 6/6/2025)

• Contacts
• Details