The trouble with logging these days is that it’s hard
to make a profit while still looking out for forest health. That
may change, at least in some depressed Northwest timber towns,
thanks to a federal program that usually helps blighted urban
neighborhoods.
In May, the U.S. Treasury Department gave
$50 million in federal tax credits to the Portland-based nonprofit
Ecotrust (HCN, 3/17/97: Working the watershed). Ecotrust will use
this “New Markets Tax Credit” to attract investment money. The
group will then purchase forestland near regions with high
unemployment and poverty rates, and hire locals to restore salmon
streams and carry out careful logging designed to maintain older,
larger trees. Investors can claim a 39 percent tax credit over
seven years.
The purchased land is likely to have already
been clear-cut and replanted, and it may take decades before the
trees yield much profit. But thinning them now can lead to a more
diverse, valuable forest later, says Bettina von Hagen, vice
president of Ecotrust’s natural capital fund. In the meantime, the
tax credit will make up for reduced revenue from slower logging.
“The forest can produce a little smaller return, but
still a good return for the investor,” says Grant Munro, president
of a timber-management firm in Port Angeles, Wash., that is working
with Ecotrust.
This article appeared in the print edition of the magazine with the headline Tax credits make eco-logging pay.
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