Forests across the Western U.S. face unprecedented risk due to historic fire exclusion, environmental degradation, and climate change. Forest management activities like ecological thinning, prescribed burning, and meadow restoration can improve landscape resilience. Resilient forests are at a lower risk of high-intensity wildfires, drought, insects, and other disturbances and provide a wide range of benefits to ecosystems and communities. However, insufficient funding limits implementation of critically needed management. To address this challenge, we propose a multi-benefit framework that leverages the diverse benefits of forest management to engage a suite of stakeholders in sharing project costs. We take a three-pronged approach to develop our conceptual model: examining existing frameworks for environmental project implementation, conducting a literature review of forest management benefits, and evaluating case studies. Through our framework, we describe the steps to engage partners, starting by identifying benefits that could accrue to potential public and private beneficiaries, and moving through an iterative and collaborative process of valuing benefits, which can accrue over different spatial and temporal scales, in close consultation with potential beneficiaries themselves. The aim of this approach is to stack funding streams associated with each valued benefit to fully fund a given forest management project. The multi-benefit framework has the potential to unlock new sources of funding to meet the exceptional challenges of climate and wildfire disturbances. We apply the framework to dry forests of the Western U.S., but opportunities exist for expanding and modifying this approach to any geography or ecosystem where management provides multiple benefits.

The investment potential for biochar production from low‐value forest biomass in the western USA is over USD 20 billion at current carbon prices. This investment could generate approximately 70 million carbon credits annual – roughly the same number currently generated globally by all forestry and agricultural carbon projects. Biochar production that utilizes woody biomass specifically from wildfire fuel thinning projects as a feedstock can contribute financially to much‐needed fuel thinning projects. Each coupled biochar and carbon credit production system has positive returns in certain scenarios. Light upgrades to existing biopower facilities have the highest returns, with internal rates of return generally between 10–30%. Mobile biochar production often had the lowest returns. However, land managers can subsidize mobile biochar production up to USD 150–300 per tonne of biochar and still save money in comparison with pile‐burning low‐value biomass while also generating approximately one carbon credit for every two bone‐dry tonnes of low‐value biomass turned to biochar. The critical barrier to industry growth is the lack of transparent biomass supply chains that enable long‐term contracting for feedstock, production schedules, and investment. Moving forward, there are three potential pathways for the biochar industry to scale and utilize biomass from forest management and fuel thinning projects. Either (1) the carbon market will need to sustain high carbon prices, (2) a subsidy or other mechanism will need to decrease the cost of feedstock biomass, or (3) production will need to take advantage of economies of scale to bring down biochar prices while increasing production.

Traditional funding strategies of grants, congressional appropriations, and income from timber sales are insufficient to complete the level of forest restoration necessary throughout California. Stimulating investment into markets for low-value biomass—such as tops and branches of trees, small trees, and dead trees—will add value to forest raw materials and provide additional revenue streams to pay for forest restoration. We evaluate the investment potential of products made from low-value biomass using a discounted cash-flow analysis of several possible forest products including fuels and nonfuels under various climate policy and market scenarios. We demonstrate the carbon benefits provided by these products, attributed to their substitution for fossil-fuel feedstocks and long-term carbon storage. Our work finds that there is an opportunity to develop several highly profitable products, most notably fuels, many of which are eligible for energy and climate policy programs such as California's Low Carbon Fuel Standard and the federal Renewable Fuel Standard. Nonfuel products have an average internal rate of return (IRR) of 13 percent, whereas fuels have an average IRR of 19 percent in our baseline scenario. Although products ineligible for government incentives are generally less profitable, income from the voluntary carbon market greatly increases the IRR. Fostering investment into these products can encourage critically needed funding for forest management while developing a high-impact carbon removal solution enabled by state, federal, and voluntary climate initiatives. On this basis, we conclude that climate policy can support forest restoration in California.