If you’re a hippy and are interested in lowering your carbon footprint, you might find an unexpected place to do so in the stock market and be able to profit at the same time… consider investing in timber. Both Rayonier (RYN) and Plum Creek Timber (PCL) are publicly traded companies that own significant timberland, and if logic holds, the timberland absorb enough carbon dioxide to offset your own personal production.
To do the simplest math, Rayonier owns 2.7 million acres of timberland, which works out to 0.035 acres per share (there are 76 million shares outstanding), so if you bought 29 shares, that equates to a bit more than 1 acre of timberland for an investment of $1218. Plum Creek owns 8 million acres of timberland, which is 0.045 acres per share, or 1 acre for 23 shares at $924.

As I’m not a very good hippy, I couldn’t find much on how much carbon dioxide an acre of trees actually consumes… The one statistic I did find was that a hectare (2.5 acres) of eucalyptus forest will absorb approximately 8 metric tons per year of carbon. Assuming the rate is similar, your 29 shares of Rayonier or 23 shares of Plum Creek should offset approximately 3.2 metric tons of CO2 production.

According to a quick check with a carbon footprint calculator, I am responsible for producing around 13 tons of CO2 per year, so I would need to buy around $3700 worth of PCL to offset my production. The great thing is, I would enjoy the benefit of a good investment and a yearly dividend in addition to the CO2 offsetting… and PCL would continue to offset my carbon production every year for as long as I owned the shares…

There are obvious counter-arguments to this line of thought… if CO2 production credits are available, the timber companies are surely taking advantage of it and passing that credit on to someone else in the marketplace. I’m sure there are other things I don’t know about… can anyone further add to (or take away from) the math involved?

And since this is a blog about investments, I would be remiss to say that I would not buy any shares of PCL or RYN if it didn’t fit into my investment plans, and the number of shares I might purchase would be dictated by my money management and risk management rules rather than the amount of CO2 I’m trying to offset.