By Kendall Gray, Program Assistant, and Joe Short, Center Vice President

The Northern Forest has a lot to gain from the Inflation Reduction Act, ranging from the lower health care and energy costs that will benefit people nationwide, to several provisions that support forest ecosystem health and forest landowners.

The Inflation Reduction Act marks the United States’ largest investment in combating climate change, with $369 billion designated for climate and energy funding. The act includes a particular focus on addressing the needs of rural families while equipping them to contribute to decarbonizing our energy sector and effectively stewarding the land against climate impacts. The Inflation Reduction Act will build significant national momentum toward President Biden’s ambitious goal of reducing greenhouse gas emissions 50% below 2005 levels by 2030.

The Northern Forest – spanning 30 million acres from New York to Maine – is the largest forested region in the eastern United States, and one of the most densely forested. Two million people make their home here in rural communities dotted across the landscape.  Here are some highlights of how the Inflation Reduction Act will benefit the region:

Agricultural Conservation and Climate-Smart Forestry

Rural needs: The Northern Forest provides innumerable ecosystem services for broad public benefit, including clean air and water, carbon sequestration and storage, and forest products. However, unlike many other forested areas of the nation, the Northern Forest is 80% privately owned, which creates unique challenges and opportunities for land management on an ecosystem scale.

What the act will do: The Inflation Reduction Act builds regional partnerships and assistance for farmers and forester landowners to increase carbon sequestration and climate resilience on their lands.

Climate-smart forestry: The act funds several different competitive grant programs through the Forest Service, totaling $450 million, to help non-federal forest landowners implement climate-friendly forestry practices and access new and emerging markets for carbon.

  • $150 million for cost sharing climate mitigation or forest resilience practices with underserved forest landowners.
  • $150 million to support participation of underserved forest landowners in emerging private markets for climate mitigation or forest resilience.
  • $100 million to help forest landowners who own less than 2,500 acres of forest land participate in emerging private markets for climate mitigation or forest resilience.
  • $50 million for private forest landowners to implement forestry practices that provide measurable increases in carbon sequestration and storage beyond the status quo.

Forestland conservation: $700 million in the U.S. Forest Service Forest Legacy Program funding with priority given to lands that provide significant benefits for natural carbon sequestration and to underserved populations.

Conservation incentives: $20 billion for agricultural conservation, including increased funding for existing Natural Resource Conservation Service (NRCS) programs: Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP), Agricultural Conservation Easement Program (ACEP), and Regional Conservation Partnership Program (RCPP).  The goals of this funding include enrichening soil carbon, reducing emissions, sequestering carbon, and addressing climate change. This funding includes $8.45 billion for EQIP to provide technical and financial assistance to farmers and non-industrial forest managers.

Markets for Wood Products

Rural needs: Landowners, loggers, and wood product manufacturers are seeking new markets for harvested wood products while confronting several industry-wide challenges.

What the act will do: The Inflation Reduction Act contains several provisions to support the development of innovative forest products and new markets.

Wood innovation: $100 million is allocated to the U.S. Forest Service Wood Innovation Grant Program, which aims to stimulate and expand wood products and wood energy markets.

Advanced manufacturing: $5.8 billion in competitive grants for projects to purchase and install advanced industrial technology designed to accelerate progress on greenhouse gas emissions reduction to net-zero at an eligible facility, including in the pulp and paper sectors.

Energy Efficiency and Modern Wood Heat

Rural needs: Residents of the Northern Forest experience some of the highest electricity rates in the continental United States while also being dependent primarily on oil and propane for home heating.  The combination of long winters, aging houses, and global fluctuations in the supply and price of fossil fuels has resulted in expensive and volatile heating costs for region.

What the act will do: The Inflation Reduction Act provides tax credits for residential energy efficiency projects that will aid in reducing home energy costs, as well as a tax credit for the installation of renewable energy systems such as modern wood heat.

Energy Efficiency Home Improvement Credit: The act includes a 10-year extension of the residential tax credit on qualifying wood and wood pellet appliances. Qualifying appliances installed in a residence after January 1, 2023, will generate a tax credit of 30% of the cost of the appliance and installation, with the value of the credit capped at $2000. The credit also extends to 30% of the cost of eligible home improvements with an annual limit of $1,200.  Annual limits exist for specific qualifying improvements (e.g., home energy audits, exterior windows and doors, central air conditioning, etc.).

There is real money on the table – for now.

We urge owners of forest and farmland in the Northern Forest to learn how the Inflation Reduction Act can help them achieve their stewardship goals and contribute to climate resilience, and we hope the act will provide an opportunity for landowners to take advantage of federal support for forest and farmland management.

Every homeowner who puts the act’s energy provisions to work will help reduce our region’s over-dependence on fossil fuels while benefitting from cost savings and supporting the region’s forest economy.

Let’s put the money to work.