Pacific Forest Trust Annual Report

WHAT CONNECTS 2012 YOU? ANNUAL REPORT

PACIFIC FOREST TRUST

wildf lowers

PFT Connects FORESTS + YOU

The more we do this work, the more we see that it is all connected: the people, the forests, our economy, and our wellbeing. Our partnerships with you and the land are building a new forest economy—grounded in conservation, rooted in stewardship, and branching out into new forest “services and products” from climate to water and wildlife.

focus on harnessing the climate benefits of forests. The results have exponential payoff—a payoff that we are finally starting to see. It’s just the beginning of what’s possible. We love what we do and we know the work we’ve done is just a beginning.

Thanks to a strong balance sheet, we are able to stretch our

Good conservation takes time. And, as they say, time is money.

The kinds of lasting, large scale impact that PFT has takes many investments made over years—whether to knit together the patchwork of the Klamath-Cascade into one healthy whole or harness the climate-healing power of working forests.

commitments when the opportunities are great. But, for PFT to stay resilient and able to make these investments, we rely on you. Your support helps buy us the time and capacity we need to continue delivering the long-lasting conservation solutions PFT is known for. Your support leverages the hearts and minds of PFT staff, volunteers, and partners to yield huge outcomes

2012 was a year where PFT made investments in future conservation successes that will benefit us all for decades to come.

for forests and climate, and ultimately the residents of our wonderful planet Earth. (There’s no place like it.)

Some of our work has both immediate gratification and longterm impact, like working forest conservation easements and their ongoing stewardship. Both our Campstool and Bear Creek projects are good examples of this. These help keep our water, wildlife, and climate healthy for many lifetimes, not just those of current landowners. Some of our efforts span decades, like our

With your investment in PFT’s innovation, the returns benefit everyone. On the following pages, we’ll show you the connections PFT is making with your support, how far we’ve come, and what’s next.

Laurie A. Wayburn President and Co-CEO

Constance Best Co-CEO

Andrea Tuttle Board Chair

Pacific Forest Trust is a think-and-dotank of scientists, forest managers, conservationists, policy wonks, eco-entrepreneurs, and outdoor enthusiasts that—working with many diverse partners— is building a new model for conservation and commerce. Our work over the last 20 years has one aim: keep working forests working for all the benefits they provide.

Table of Contents PFT CONNECTS...

Working Forests + Wildlife, p.6 Healthy Forests + Healthy Climate, p.8 Forest Restoration + Energy, p.10 Private Forests + Treasured Landscapes, p.12 Resilient Forests + Resilient Funding, p.14 Partners + Best Practices, p.16 The Klamath-Cascade: A Living Laboratory Goes National, p.18 2012 Financial Review, p.20

Š CINDY DIAZ

© SUE CLEARWATER

Connecting Forests for Animals on the Move Climate change is here. Just ask the Pacific Fisher and scores of other species that are moving their homes north and up as their habitats shift with our changing climate. PFT and our partners are working to connect the habitat dots for all species as they fight to adapt to climate change.

Our strategy centers initially on Mt. Shasta and its surrounding watershed: a global hot spot for biodiversity and home to over 600 animal species. Though the most important area in California for climate adaptation, this forested haven is threatened. Development and fragmentation undermine the special habitats crucial to over 180 at-risk species. A checkerboard pattern of public and private land ownership fragments whole landscapes, hampering species from moving freely.

By emphasizing working forest conservation in areas that connect multiple habitats and ecosystems, PFT is “futureproofing” the biodiversity of the Klamath-Cascade. We are pursuing the scientific research, modeling and actions necessary to safeguard habitats for species on the move, and conserve productive timberlands at the same time— not to mention safe, clean water resources for 25 million thirsty Californians.

Since 1953, the Pacific Fisher has lost over 8.5-million acres of its habitat— 43% of its historic range.

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WORKING FORESTS

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In 2012, your support helped PFT: • Protect the 13,000–acre headwaters of Bear Creek, a key source for the Fall River, working with Roseburg Resources to conserve their 8,230-acre Bear Creek Working Forest. Your donations and grants helped us leverage a $7.8 million state investment to connect this with other conserved landscapes, creating a permanent “super wild-way” between the Shasta-Trinity National Forest, a 11,500-acre late seral reserve, and these working forests.

• Expand scientific collaboration and practical implementation on the ground with a $200,000 Wildlife Conservation Society grant for climate adaptation science in the Klamath-Cascade. We’re applying our research to several wildlife adaptation pilot projects—enhancing wet meadows, restoring micro-habitats, and protecting other special habitats, like keeping downed logs in place for amphibians.

WILDLIFE

• Sign an agreement with Hancock Timber Resources to conserve over 18,000 acres along the McCloud River and significantly increase the connectivity of this extraordinarily important area for biodiversity within the Klamath-Cascade region. This project was one of President Obama’s top projects to receive federal funding through the Forest Legacy program.

What’s next: PFT is pursuing funding to permanently conserve the Hancock McCloud River Working Forest, our largest conservation effort to date. Your support buys us the time we need to complete ambitious projects like this one, and our projects need to get even more ambitious if we are to truly safeguard our water supplies and mitigate climate change in this 10-million acre region.

Over the next two years, we’ll be expanding our educational outreach to the public with our findings, as well as implementing major conservation projects and rolling up our sleeves on existing conservation easements to create and improve special habitats.

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Making Working Forests Work for Climate Change Even if we stopped all fossil fuel emissions today, we still couldn’t hit California’s CO2 targets for 2050 without forests. While power plants and gridlocked cars catch most of the public blame for climate change, most people overlook the simple fact that deforestation alone is responsible for over 30% of total CO2 emissions to date. California is no exception, having lost almost 40% of its original forests to cities, agriculture, roads, and sprawl.

Deforestation and forest degradation played a large part in our current climate conundrum—and healthy resilient forests will play a major role in getting us out.

Since PFT’s inception in 1993, we’ve promoted healthy forests for a healthy climate. We’ve helped bring scientists, landowners, and politicians together to craft practical policies that leverage forests and climate. California is the landmark state for economy wide climate policy, and launched its pioneering cap and trade program in 2012.

PFT successfully advocated with key decision makers— legislators, the Air Resources Board, and the Department of Finance among them—that investment in forests was a legally appropriate use of AB32 revenues, and made sure they were included in the draft Investment Plan for AB32.

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HEALTHY FORESTS

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How was your investment in PFT leveraged?

• Forests are a specific sector for climate investment: AB1532 created a process for investing the cap and trade auction funds.

• Forest carbon offsets are valuable and useful climate tool: PFT worked with our conservation allies to make sure that linking California’s cap and trade program to Quebec’s new program maintained the quality and integrity of forest offsets.

• Climate investment and watersheds do mix: by highlighting the value of investing in forested watershed conservation, we can store more carbon and keep our drinking water pure. The same conservation investments and actions advance both goals, and help forests and wildlife adapt to a changing climate.

HEALTHY CLIMATE

“

...(B)iological systems in the U.S. could sequester between 40 and 60 billion tons of CO2 over the next 50 years through land use activities such as forest restoration, conservation and improved management.

”

Congressional Budget Office

The Potential for Carbon Sequestration in the United States, 2007

What’s next: Auction revenues from AB32 are predicted to yield up to 60– billion dollars by 2020. PFT is continuing the effort to ensure that forests get appropriate investment to keep our climate healthy.

We continue to work with the Air Resources Board to confirm the van Eck forest carbon accounting system as an early action offset project. When you support PFT’s climate work, you allow us to unlock investments for healthy forests that are orders-of-magnitude larger than anything ever before.

Your support of PFT has more leverage now than ever as California and the rest of the world makes decisions about the role of forests in combating climate change.

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Clean, Green Forest Energy Decades of fire suppression have left many of our forests in dire need of responsible restoration—thin spindly trees crowded together, competing for water, nutrients, and sunlight, threatened by pests and disease.

These unnaturally dense forests are veritable tinderboxes loaded with fuel for forest fires, leading to polluted watersheds and degraded forests.

Small-scale biomass plants have the opportunity to change this equation. Forest restoration transforms such forests from climate liabilities to healthy, longterm, carbon-sequestering solutions. But, the resulting waste can’t just sit on the forest floor; small-scale plants which use this waste and are supported through Feed-in-tariffs from SB1122 are a key part of the answer. Done right over time, restored forests sequester more C02 and have lower fire intensity. On-the-ground jobs are created in the green energy sector, and everyone benefits from the advantages of healthy forests and a healthier climate.

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FOREST RESTORATION Forest Restoration

Research + Best Practices

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“

The cost of suppressing wildfires now eats up more than half the agency’s budget. The 10-year average has risen almost every year since 2000, from $540 million to more than $1 billion in 2010.

”

Chief Tom Tidwell USDA Forest Service

In 2012, your investment in PFT:

COURTESY ALLAN FORD

ENERGY

• Ensured a future power market for small-scale biomass: PFT’s focus on SB1122 helped establish a feed-in-tariff for small-scale biomass energy. Utilities must now purchase at least 50 MW from 3 MW forest biomass energy plants, ensuring they are competitive with their large-scale counterparts.

• Promoted forest biomass’ inclusion in the Electric Program Investment Charge fund and acted as a formal Intervenor at California Energy Commission and Public Utilities Commissions processes to ensure the sustainability of efficient, restorative forest bio-energy.

What’s next: PFT is demonstrating how small-scale bio-energy from forest restoration waste is a viable, sustainable, and low-carbon option. We’re advocating for 3-5 small-scale pilot projects in Klamath-Cascade watershed, contributing to local economies and ensuring responsible forest restoration for the next 40 years.

We need your help to galvanize support with local influencers—conservative and liberal alike—and shape the policies that will form the framework for successful green forest energy projects.

Energy From Forest Waste

Full Cycle Regulatory Accounting Policies

$

Green Jobs

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Protecting Special Places for All to Enjoy Sometimes, when you’re knitting together conserved private landscapes, you find special places for everyone to share. These lands represent the “hole in the donut”— privately owned parcels surrounded by public lands of special significance. If developed, these “inholdings” increase fire risk and increase service costs to local governments. Permanently protecting these areas strengthens not only their own natural and recreational values, but also the values of nearby private landscapes.

On these rare occasions, PFT helps willing landowners who are interested in making their property part of a treasured public landscape. Some places like the Cascade-Siskiyou National Monument (CSNM), are renowned for their biodiversity, while others, like Yosemite National Park are known for spectacular scenery and recreational value.

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PRIVATE LANDS

© ALDEN MOFFATT, WWW.ANCIENTFORESTNATIONALPARK.ORG

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In 2012, your investment with PFT: • Succeeded in the Campaign to Complete the Monument, working with willing sellers that wished to add to the CSNM in Oregon. This effort permanently protects 5,000 acres within the nation’s first globally recognized biodiversity monument, and strengthens working forest conservation in the Klamath-Cascade.

• Helped Introduce the Yosemite National Park Boundary Expansion Act (BLA) of 2012 (Costa, HR 5907), which proposed expanding the boundary of Yosemite to add back 1,600 acres in John Muir’s original vision. The BLA received broad bipartisan support and great visibility with 47 news outlets reporting.

popularity is also its “…Yosemite’s greatest challenge. New development

TREASURED LANDSCAPES

… would increase the threat of fire, habitat fragmentation and degradation of creeks that flow into the park. … the park’s boundary must be adjusted to allow the National Park Service to acquire these adjacent lands.

”

U.S. Senator Dianne Feinstein (D-CA)

What’s next: PFT is working harder than ever to complete John Muir’s vision and build a Yosemite National Park shielded against further development. Now, in 2013 new Yosemite BLA bills have been introduced in both the House and Senate, and all momentum points towards a completed expansion in time for Yosemite’s 100th Anniversary in 2016.

Your support now goes further than ever before: with record public support, and increased attention to the park for its anniversary, there’s never been a better time to advocate for an expanded Yosemite. And when it happens, we hope you’ll be there to celebrate, discover, and explore a new gem in this treasured landscape.

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Making the Case for Long-Term Investment Landowners need to make decisions for their forests that also make sense for their bottom line. That’s why our conservation work focuses on providing incentives to landowners to manage forests for the long term, safeguarding ecological values in the process. Whether for a specific easement that permanently conserves one forest, or for a program that provides the capital to protect many, we devote our best thinking, creativity and tenacity to finding the best ways to pay for these vital projects.

We look for—and work to create—multiple sources of funding that complement the current marketplace and match the benefits forests and their stewards provide: water, wildlife, healthy climate, biodiversity, and recreation. Funding to conserve any given forest landscape might come from a complex mosaic of federal, state, or local government agencies or programs; foundation grants, private landowners, and philanthropists.

Highlights of PFT’s funding efforts in 2012: • Working forests: Received final approvals to fund the Campstool Ranch Working Forest Conservation Easement, the last large ranch in Calaveras County, permanently protecting 3–square miles of forest and ranch land for future generations.

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RESILIENT FORESTS

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$3.1 Million in funding from the Wildlife Conservation Board and Sierra Nevada Conservancy, with a generous donation from the landowner made this project possible. This easement connects to 645 acres of Bureau of Land Management lands as a permanent bulwark against future development.

• Conserving forests as a climate solution: PFT helped ensure that funds generated by AB 32’s cap and trade program will be available for investing in forests. This new multi-billion dollar fund for reducing greenhouse gas emissions can be used to fund the conservation, restoration, and improvement of California’s forests.

• Making the most of federal monies for forest conservation by advocating for a more efficient and flexible federal Forest Legacy Program in the Farm Bill.

RESILIENT FUNDING

• Efficient and effective: Worked with CalFire and the legislature to improve the implementation of California’s Forest Legacy program.

• Forest energy: Promoted forest biomass’s inclusion in the new Electric Program Investment Charge fund (potentially $26-million over 3 years) • Forest energy: to ensure market viability and processes for the sustainability of efficient, restorative forest bio-energy, PFT engaged as a intervenor at California Energy Commission and Public Utilities Commission hearings.

What’s next: How to pay for the conservation that forests deserve is a constant concern. Your donations, large and small, catalyze our efforts to leverage potentially billions of dollars to protect our forests, waterways, wildlife and climate.

Breathing in a forest’s oxygen-rich air or seeing a Sand Hill Crane soar above a meadow isn’t half bad either!

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© ALWAYSJANUARY

Convening, Collaborating, Connecting Our work is all about listening and getting everyone’s needs on the table. PFT’s work connects conservatives and liberals, elected officials and entrepreneurs, scientists and foresters, public agencies and private landowners, families and adventurers.

In every case, PFT looks at both sides of each forest and climate issue to find a “radical middle” from which to offer innovative conservation solutions and incentives for working forests and private landowners. We lend our unbiased assistance on best practice documents that further the causes of working forest conservation, wildlife protection, climate adaptation, forest restoration energy, and healthy watersheds.

Examples—your support helped PFT: • Achieve practical reforms for quality appraisals to fund conservation easements (CA Wildlife Conservation Board).

• Mitigate fire liability for private landowners, generate funding for forest restoration, and provide stable funding for review of forest management plans (CA Dept. of Fish and Wildlife) • Develop practical incentives to manage critically needed habitat for the Northern Spotted Owl. (USFWS) • Expand the forest carbon market nationally, working with Carbon Canopy • Articulate the range of forest investments that would help achieve California’s climate goals.

(Various state resource agencies)

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PARTNERS

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SELECTED PARTNERS AND CLIENTS: American Forest Foundation

USDA Forest Service

American Forests

U.S. Department of the Interior

American Rivers

U.S. Fish & Wildlife Service (Reg 5, 6)

Appalachian Mountain Club CA Dept. of Fish & Wildlife CalFire California Forestry Assoc.

Klamath-Cascade Advisory Council Members:

CalTrout

Larry Alexander, Northern CA Resource Center

Carbon Canopy Dogwood Alliance Duke University School of Law Environment California Fred M. van Eck Forest Foundation, LLC George House (BLM, CSNM) Hancock Timber Resource Group J. Timothy Lane and Campstool Ranch The Lyme Timber Company National Park Service Northwest Biocarbon Initiative

Curt Babcock, CA Dept. of Fish and Wildlife Steve Bachmann, Shasta-Trinity National Forest Stu Farber, W.M. Beaty & Associates Mike De Lasaux, University of California Cooperative Extension Phil Detrich, U.S .Fish and Wildlife Service (Ret.) Jay Francis, Collins Pine Company Nick Goulette, Watershed Research & Training Center

Oregon State University

Melinda Graves, Natural Resources Conservation Service

Pondosa Forest, LLC

Gary Hendrix, Phillips Bros. Mill

River Exchange

Mike Hupp, Consulting Forester

Roseburg Resources Co.

Bob Kingman, Sierra Nevada Conservancy

Save the Redwoods League Sierra Cascade Land Trust Council

Rich Klug, Roseburg Resources Co.

Sierra Nevada Conservancy

Don Koch, CA Dept. of Fish and Wildlife (Ret.)

Sustainable Forestry Roundtable

© TUPPER ANSEL BLAKE

Yale School of Forestry & Environmental Studies

California Wildlife Conservation Board The Campbell Group, LLC

BEST PRACTICES

World Resources Institute’

Curtis Knight, California Trout

Phil Nemir, Consulting Forester

The Joseph W. Jones Ecological Research Center

Colleen O’Sullivan, Trinity County RCD

U.S Bureau of Land Management

Laurie Tippin, USDA Forest Service – Region 5 (Ret.)

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© ANDY STOCKER

The Klamath-Cascade: A Living Laboratory Goes National Everything we’ve learned about forests—all the science, research, tools, best practices, and policies—comes together in PFT’s living laboratory: the 10-million breathtaking acres surrounding Mt. Shasta.

We’ve spent twenty years developing incentives for landowners (like working forest conservation easements and carbon offset projects); advocating for forest investment; facilitating forest restoration and sustainable bio-energy; and promoting well-managed, resilient forests for a healthy climate. And it all comes together here, in the Klamath-Cascade, where a new forest economy means local jobs, clean water supplies, robust wildlife, and a healthy climate. Working with our K-C Council, a diverse group of stakeholders—public agencies, legislators, foresters, scientists and community development groups—PFT is building broad community engagement across the region.

Why the Klamath-Cascade? It’s the largest single statewide carbon bank; most bio-diverse conifer forest worldwide, the most important statewide area for wildlife adaptation, and the source of water for 25 million Californians—not to mention some of the most economically depressed counties in the U.S.

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REGIONAL APPLICATION

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© P.L. DOVE

Home to a floristic province with over 600 plant and animal species, California’s wood basket, a still-growing glacier, and endless recreation and adventure, the region presents a rare opportunity to grow resilient, well managed forests on a massive scale and set the tone for woodlands across the United States. If our forests are to survive against the demands of population growth, development, industrialization and climate change, we must do all we can to conserve forest landscapes, and we must do it now.

The vision of a new forest economy is becoming real—in 2012 PFT: • Conserved over 8,230 acres of the Bear Creek Working Forest, helping to protect the McCloud watershed and over 50 miles of its rivers and tributaries, as well as over 230 jobs.

NATIONAL IMPLICATION

• Contributed to the Integrated Regional Watershed Management Plan for the upper Sacramento, McCloud, and Pit rivers to protect watershed function and health.

• Worked in partnership with the California Dept. of Fish & Wildlife to develop new sources of funding for the Mount Shasta Headwaters Conservation Area.

• Won a WCS Climate Adaptation Grant of $200,000 to put climate adaptation science into action conserving and connecting landscapes.

• Gained an option to conserve over 18,000 acres of the McCloud River Working Forest and significantly increase the health of the watershed.

What’s next: Our vision for the Klamath-Cascade region will keep PFT working on behalf of forests and forest stewards for decades, and we want you standing beside us with every new milestone. We’ll work with the California Department of Fish and Wildlife to develop new funding for this vital region, creating a model for other programs across the country. We’ll also focus on conserving the Hancock McCloud River Working Forest, developing climate adaptation strategies for the region, and advocating for forest investment of AB32 auction revenues.

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100%

75%

2012 Financial Review On the previous pages, you seen some of the ways that PFT is connecting forests and people, conserving for a better future, cleaner water, and a healthier climate. Looking back we’re a little surprised that so much productivity can happen in 365 days with just 15 dedicated staff members. And we’re amazed by the collaboration, generosity, and support of the landowners, government agencies, foundations, stakeholders, volunteers and donors whose engagement with us makes our work possible.

50%

25%

Income: $4,343,776* Investments: $208,751 (4%) Other: $321,570 (6%) Donations: $341,248 (6%) Charitable Gifts and Foundation Grants: $479,250 (10%) Fees for Services: $541,902 (11%) Government Grants: $2,751,055 (63%)

100%

Financial folks call that “leverage”. Not only does

90-cents of every dollar invested by our donors and partners gets put to work to achieve our program goals, but every cent is amplified through our

75%

collaborations for maximum effect.

Conservation takes time. And, as they say, time is money.

The kind of lasting, large scale impact that PFT has takes many investments made over years—whether to knit together the patchwork of the Klamath-Cascade into one healthy, whole or to harness the climate-healing power of working forests. Your support buys us the time and capacity we need to continue delivering the long-lasting conservation solutions PFT is known for. With your investment in PFT’s innovation, the returns benefit everyone.

50%

25%

Expenses: $ 4,965,652* Programs: $4,446,069 (90%) Fundraising: $263,934 (5%) Administration: $255,649 (5%)

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*Discrepancy is due to change in land value and multi-year grants reported in prior years.

CONNECT

DO MORE Thanks to your help, we’ve directly conserved more than 75,000 acres to date, which safeguard our water, provide homes for wildlife, supply wood and jobs for local families, and will continue to remove CO2 from our atmosphere for generations. Add all the conservation PFT has influenced, and the impact grows exponentially.

Each year we put boots on the ground in 30 working forests, collaborating with landowners to keep their forests healthy. There are as many ways to support us as there are ways that PFT connects forest and you.

Here are just a few suggestions, but feel free to be creative and use the donate button: • Chip in on a birthday gift for Yosemite and help complete John Muir’s vision for the Park.

• Support healthy water, wildlife + climate by supporting our work in the Klamath-Cascade.

• Keep the lights on in our campaign to generate clean, green forest energy from forest restoration.

• Adopt a “super-wildway” + connect animal habitats across landscapes.

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© CINDY DIAZ

pacificforest.org bit.ly/supportpft

The other sixty percent.

BOARD OF DIRECTORS

Most folks don’t think about the privately owned

Andrea E. Tuttle, Ph.D., Chair Charles Swindells, Chair [2012] Timothy N. Taylor [2012] Timothy B. Pirrung, Treasurer [2012] Don Koch, Secretary Laurie A. Wayburn, Co-founder, Co-CEO & President Constance Best, Co-founder & Co-CEO O.H. Perry Lloyd, Treasurer Linda S. Adams Jerry Franklin, Ph.D. Ken Jennings, Ph.D. Russell Shay Steve Quarles, J.D. Julie Weisman, J.D. Dean Urban, Ph.D.

lands that make up nearly 60% of America’s forests.

STAY CURRENT WITH PFT!

working forests and reward the landowners who

www.facebook.com/pacificforest twitter: @pacificforest pacificforest.org

are helping them grow resilient while stoking forest

© 2013 The Pacific Forest Trust. All rights reserved.

Reproduction permitted with attribution.

Neither do the elk, trout, owls, and thousands of other animals that travel through or make their homes in working timberlands. A 3rd grader doesn’t wonder at the clean water burbling from the drinking fountain, or its thousand-mile journey from a glacier to his tongue. Hikers wandering along the trail enjoy splendid vistas, but can’t see an answer to climate change in the view. We do. With your help, we’re finding ways to conserve our country’s private

economies. Help us grow resilient and we’ll work with you to conserve ever more significant working forest landscapes in the other sixty percent.