Hawaii

Heritage Reforestation Corp. in Hawaii

The mission of Heritage Reforestation Corp. is to preserve a source of fine tropical hardwoods for the future. In particular, our goal is to see that the unique woods of Hawaii, like Koa, are not harvested to extinction. By giving individuals, businesses and organizations the opportunity to own these special trees and the lumber they will produce, we hope to broaden the awareness and support necessary to foster forest stewardship. Plantation raised trees take pressure off the old growth wilderness so that future generations are not deprived of their treasures.

Planting a Sustainable Future for You Hawaii is the only location in the United States capable of growing a wide variety of tropical rainforest hardwoods. Over the past 100 years, sugar cane and pineapple fields replaced hundreds of thousands of acres of Hawaiian forests. When it became cheaper to grow sugar cane and pineapple in undeveloped countries, the fields were abandoned with the former forests lost to the past.

Working with land owners who take their stewardship seriously, Heritage Reforestation Corp. is helping to bring the tropical rainforest back to America. HRC is master- planning a 2,700 acre sustainable forestry project on Hawaii Island; growing rare tropical hardwood trees for investors all over the world; reducing Global warming through carbon sequestration while providing our investors with the opportunity for substantial profits.

Why Trees?

All too often we are told that caring for the planet requires financial sacrifice. In cultivating hardwood forests, we have found the opposite to be true. A growing number of investors are realizing that preserving rare hardwoods for future generations makes good economic sense. Historical data validates returns from tropical hardwoods have outperformed those of stocks, real estate and other commodities for decades. Unlike most common investment vehicles which are affected by economic cycles, returns are not related to market movements but rather the laws of supply and demand.

Tropical Rainforest

Deforestation

There are many forces leading to our current deforestation crisis. Tropical forests are often in the poorest of countries and lumber is a cash crop that can quickly bring in much needed foreign exchange dollars. The population of the world has doubled since the 1950s with the majority of that growth in tropical areas. All of these people need land for housing and agriculture. The worldwide demand for beef has also lead to the clearing of vast acreage for grazing. In an effort to stave off another environmental risk, the world is attempting to shift from fossil fuels to biofuels. This is furthering the deforestation problem as land is being cleared for palm oil plantation.

Tropical Rainforests are disappearing at an alarming rate. Unlike oil and natural gas, we are not discovering new reserves.

Plantation raised trees currently supply only 1–2% of the tropical hardwood market. Even with a complete shift in the policies of the governments where these trees are grown, it is unlikely that we will see more than a few percent of our current lumber needs met by plantation grown trees. With our current deforestation rate, most estimates indicate a global shortage within the next 12 years. This will put tremendous upward pressure on the price of tropical hardwood lumber.

Carbon Credit Market: Carbon Dioxide & the Global Warming Debate

It would be hard to live in the modern world and not have heard the terms Greenhouse Effect and Global Warming. The debate about whether the activities of industrialized man are a major cause of global warming is far from over. The scientific community and the environmental movement may argue over the magnitude of man’s influence, but they broadly agree that we are changing the very climate of our world. The result of this process going unchecked will cause major disruptions to rainfall patterns, sea level increases and desertification of previously fertile regions. Whatever side of this debate you find yourself on, the political reality is that governments around the world are taking notice. It is evident that the increasing cost of excess emissions of greenhouse gases will be added to the cost everything.

Greenhouse gases are gases that when added to the atmosphere tend to trap the heat from the sun. This can lead to a gradual increase in temperatures and resultant changes in climate. Some of the better documented greenhouse gases are carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons. The historical record for the increase in carbon dioxide in the atmosphere has been one of the best documented trends. The Scripps Institution of Oceanography and National Oceanic and Atmospheric Administration’s research laboratory, on the top of Mauna Loa on the Big Island of Hawaii, has been tracking these changes since 1958. In the graph located in the Carbon Credits and the Tree Owner section, you can see the saw tooth pattern of seasonal changes making up the relentless trend of increase in atmospheric carbon dioxide.

Carbon dioxide is added to the atmosphere by a wide array of processes, but the process most directly attributable to human activity is the combustion of fossil fuels. When we burn organic matter like oil, natural gas, diesel fuel, gasoline and coal for energy, we are taking carbon that has been stored in the earth for millions of years, combining it with atmospheric oxygen and releasing carbon dioxide into the atmosphere. There is little doubt that the growing energy demands of the modern world and the growing energy demands of developing countries will only accelerate this process.

Trends in Greenhouse Gas Mitigation

The cost to the economies of the world to attempt to reverse this trend is staggering, but the cost of doing nothing may be even greater. One of the recent attempts to deal with the issue was an international agreement know as the Kyoto Protocol. It was ratified by more than 170 countries and since its implementation in 2005 the European Union has moved to give it the force of law. The concept is evolving into what is being called Cap and Trade legislation. The concept is relatively simple. If you are a business that produces greenhouse gases as a waste product there will be specific limits on what you are allowed to produce.

If you exceed those limits you must buy credits from others whose activities remove greenhouse gases from the atmosphere or reduce the greenhouse gases produced by traditional processes. This legislation is in a constant state of flux and hotly debated in governments around the world. Few would deny that it is the direction policy is moving. The recent elections in the United States suggest that Cap and Trade legislation is a lot closer to reality. Some have suggested that the trading in greenhouse gas credits will be one of the largest global markets. Much remains to be done to standardize the units and to certify the validity of any particular carbon offset.

Carbon Credits and the Tree Owner

The growing concern over global warming is very good news for the tree owner. When a tree grows it uses the energy from the sun to convert carbon dioxide from the atmosphere into cellulose and other organic compounds. The amount of carbon dioxide sequestered or tied up in this manner can be as enormous. When we destroy natural forests and burn the wood, we are releasing carbon dioxide into the atmosphere. By planting trees you are helping to offset this trend.

During the life of a tree, it can sequester many tons of carbon dioxide. In this regard, tree farms are more efficient at removing carbon dioxide from the atmosphere than mature forests. A mature forest is in balance with new growth being offset by decay processes. It is a huge repository of carbon, but not a highly active carbon sink. A tree farm on the other hand is managed to optimize the amount of carbon tied up in wood. An average piece of wood of any species is almost 50% carbon. When the wood grown is precious tropical hardwoods, the lumber and products made from this wood will be around for generations. It will be a very long time indeed before that carbon finds its way back into the atmosphere. In addition to the carbon sequestered into marketable lumber, the below ground wood in the form of roots, traps large amounts of carbon as well. Over the years, the leaf litter contributes back to the soil. Finally, the wood waste from harvesting and milling will be chipped and returned to the soil further increasing the organic matter content of the soil.

It is impossible for us to predict what the future holds for the carbon credit markets, but any carbon credits generated by the lumber you derive from the sustainable growth of your trees are yours. You can actually become carbon neutral while profiting from the value of the wood your trees produce. For once you are not being asked to make an economic sacrifice in order to do the right thing for the planet.

A relatively simple calculation can help to clarify this. If you plant 100 koa trees, the anticipated yield over their 25 year growth and harvest cycle is in excess of 11,400 board feet. Koa weighs approximately 3.15 pounds per board foot. That makes the yield about 35,340 pounds. If half of this is carbon you have trapped about 17,670 pounds of carbon. By doing this, your trees removed 33 tons of carbon dioxide from the atmosphere. A single planting of 100 trees will offset the carbon emissions of an average family for two years while still generating valuable hardwood lumber. In addition, all of the carbon left in the soil can be as great an offset to greenhouse gases as the lumber produced. Who says that going green can’t be profitable?

Tropical Reforestation vs. Temperate Reforestation

There is a debate about the benefits of planting trees in temperate climates. Trees absorb the heat of the sun better than snow covered landscapes that reflect much of the suns rays back into space. The net benefit to global warming might be a mixed outcome at best. The situation is much different in the tropics. There is no snow to reflect the sun back into space under any circumstance, but by planting trees you can make a major impact on the carbon dioxide in the atmosphere allowing more of the heat from the sun to escape. Additionally, a tropical landscape covered in trees will have a higher level of cloud cover than an area cleared for agriculture. Those clouds also reflect sunlight back into space. Tropical tree projects generate a double benefit in the war against global warming.

Your Personal Carbon Footprint

Many people are becoming aware of the impact their lifestyle choices have on the environment. More and more businesses are becoming aware of the effect that their operations have on the planet as well. These socially conscious individuals and organizations are looking for cost effective ways to reduce the amount of greenhouse gases their activities generate and ways to offset the remaining greenhouse gas emissions that are a result of their activities. Most effective strategies have been a direct expense without the possibility of profitable return. Becoming a tree owner has the potential for profit while making a real contribution to the removal of greenhouse gases from the atmosphere. Tropical hardwoods are a near perfect form of this approach since the wood they produce goes into cherished articles of value that are passed from generation to generation.

The Opportunity

About Tropical Hardwoods

Hawaii is a unique ecosystem and according to The Bishop Museum in Honolulu, home to hundreds of endangered species. The Bishop Museum even refers to Hawaii as the “Endangered Species Capital of the World”. Because Hawaii is the most isolated landmass on earth, it has evolved many species unique to these islands. One of the very unique plants of Hawaii is the magnificent Koa tree. Koa played a very important role in Hawaiian culture. The massive straight trees were the source of logs carved into voyaging canoes that became the Polynesian fleet navigating the Pacific a thousand years before Columbus discovered the new world. The wood was prized for paddles, construction, bowls, weapons and musical instruments. When it comes to tropical hardwoods, Koa is one of the most magnificent and is often referred to as the king of the forest.

When the western world discovered this magnificent wood, they applied western methods of harvesting — clearing 90% of the original forest. This resource was all but eliminated from lower elevations and the genetic diversity that once existed has been lost. The history and beauty of Koa is what started us on the path to form- ing Hawaiian Legacy Hardwoods. These incredible trees belong to all generations. Although Koa is unique to Hawaii, many other tropical hardwoods are endangered in their natural ranges. There are over 50 species of rare and valuable tropical hardwoods that will grow in Hawaii. With Hawaii’s isolation many of the species that are threatened in their original habitat can find refuge in the fertile soil of this very special corner of the United States.

Hawaii is renowned for its micro-climates. With the consistent trade winds dividing the islands into windward and leeward sides you have tremendous ranges of rainfall to select from. As home to the largest mountains on earth — from sea floor to summit — you have a tremendous range of elevations to choose from. With land ranging from millions of years old, with deep soil, to land forming today, you have a wide range of soil types within a short drive from each other. Hawaii is the perfect refuge to both preserve this heritage and cultivate a sustainable source for the dwindling treasure of tropical hardwoods.

About Koa

Koa (Acacia koa) is a native Hawaiian tree of exceptional beauty. Koa is so variable in its appearance as to defy classification. It can be everything from red to brown to golden and even ivory. The grain can be straight, but the most valuable koa wood exhibits a curly figure that creates the illusion that you are looking right through the surface. It finishes to a rich luster and depth that has made it a treasured resource for Hawaiian heirloom furniture, woodturnings, and sculptures.

The Hawaiian Islands were once blanketed in koa forests with the largest trees being sought out for dugout canoes. The wood was so prized that it was used for virtually everything in contact with the Ali‘i (Hawaiian royalty).

The trees reach heights of 100 feet and diameters of more than 4 feet. Koa is a nitrogen fixing tree and can often grow in soils too poor in nitrogen to support other species. This has allowed koa to colonize very thin volcanic soils preparing the way for other species. Mature trees have very little sapwood and are primarily high value heartwood.

Koa is extensively used by fine furniture makers, woodturners and sculptors in Hawaii, but its exceptional value as a tone wood has brought it to the attention of musical instrument makers world-wide. Heritage Reforestation Corp. is committed to furthering the survival and availability of this fine wood for future generations.

Koa is a truly magnificent tropical hardwood that is unique to Hawaii. Agriculture and clear cut lumber practices of the past century eliminated over 90% of the koa forests. Strong preservation measures are defending the remaining native stands. With it’s strong international following as a superior wood for musical instruments, and it’s large market for Hawaii’s dense population of fine wood artists, who turn this native tree into fine works of art, the demand for koa is increasing. This has fostered a new interest in cultivating koa for the wood artisan market.

The potential rewards and the satisfaction of bringing a sustainable source of this wood to market have lead to our focus on koa for this year’s planting. The limited range of koa was a major consideration. Knowledge is growing rapidly, but koa’s behavior as a plantation tree is certainly not as well understood as other species. In developing our projections we have analyzed the performance of a diverse range of tropical hardwoods in plantation settings. Much of our data comes from the performance of Acacia Mangium a very closely related tree from the same genus. Koa has tremendous diversity in appearance and accordingly commands a wide range of prices. In typical lumber outlets in Hawaii it can have a retail range from $20 to $125 a board foot. Wholesale information is difficult to come by, but conservatively it could be 50% of these numbers.

Assumptions  

Projections  

Environmental Risk Factors

Of all the risks to a forest resource, fire is the most universally feared. Every year California experiences forest fires during its dry season. These fires are often started by lightning. The meteorological conditions in Hawaii make lightning a very rare occurance.

Hawaii Island Lava Risk

The Hawaiian Islands are volcanic in nature and potential for lava flows must be considered. The Islands are oceanic shield volcanoes and as a result produce very fluid lava that is highly predictable. It does not have the characteristics associated with volcanoes like Mount St. Helens. All farm sites used for the tree owner program will be in lava hazard zone 8 as classified by the United States Geological Survey (http:// hvo.wr.usgs.gov/hazards/) or in areas where there are no identifiable flows in recorded history. Zone 8 is one of the lowest risk areas with no area being affected since 1800 and less than 1% affected in the last 10,000 years. The map below is produced by the USGS:

Hawaii Island Annual Rainfall Map

The continuously wet conditions along the windward (Northeast) coast of the Big Island make it a low risk area for forest fires. To get an idea of the amount of rainfall you can refer to the map below. Beyond reducing the fire risk, these lush conditions also allow us to avoid the major expense of irrigation. Our growing areas have 60 inches of rain or more per year. Rainfall is so consistent that irrigation is unnecessary occurrence allowing us to keep costs down and not waste another valuable resource.

Hawaii Island Earthquake Risk

The only risk that earthquakes pose to tree farms is if they result in landslides along steep slopes. The generally low intensity of Hawaii’s earthquakes makes this a very small risk. Most quakes are not even noticed by the residents and only show up on sensitive recording equipment. This is even less of an issue with tree farms since steep slopes are not suitable for planting trees. The following map shows the location and intensity of quakes on the Big Island. Most of them are clustered in areas of current volcanic activity in the southern part of the Big Island. The lava risk and the earthquake risk tend to cluster together.

Central Pacific Hurricane Tracks

Hurricane and storm force winds can topple trees in areas that are impacted by them. Hawaii has had the good fortune of being in slightly cooler water, reducing the frequency and intensity of hurricanes. In the last 60 years, covered by the map on the opposite page, no hurricanes have made landfall on the Big Island. The map from the University of Hawaii Meteorology Department shows the tracks and intensities of recent hurricanes in the Central Pacific. Although it is no guarantee of future weather patterns, Hawaii has not been subjected to the storm frequency or intensity experienced by the Southeastern United States and the Caribbean.

This by no means constitutes a complete analysis of all possible risks. Heritage Reforestation Corp. encourages any concerned potential tree owner to consult with suitable professionals of their own selection.

One can never quantify all the risks of an enterprise, but all care has been taken to minimize exposure to environmental, geological and meteorological risk. The market force risks are covered in the Projections section. Although changes in government policy are hard to predict, public opinion and the current administration recognize the need for sustainable environmental practices. This trend will favor enterprises that take pressure off precious and endangered resources. The risk of diseases and insects are constantly monitored by our forestry professionals.
Hawaii’s geographic isolation reduces the threat of many pests that are common in other parts of the world. By continually monitoring the tree farm, Heritage Reforestation Corp. works to minimize any pest threats through early detection and treatment.

Our Unique Technologies

Our IT (Information Technology) specialists are integrating GPS/GIS (Global Positioning System/Geographic Information System) mapping systems with RFID (Radio Frequency IDentification) tagging of each tree to track ownership, growth, maintenance and the lumber yield from each tree owner’s stand. These computer chips will provide a unique electronic signature for each tree specifically registered to the tree owner. The GPS/GIS system will locate each tree by an exact set of geographic coordinates allowing the tree owner to locate their trees on maps and by satellite imagery. It is only a matter of time before you will be able to go on line and use these coordinate to look at your specific trees from space.

Flowering Koa