Certified GKH Gardening Expert
Fungus, moss and lichens are present in the moist, cool conditions of our area, and most experts don't feel there's any reason for concern. However, if you need to remove it, there are a few ideas besides carefully peeling it off. This article from Washington State University may have the best advice:
Lichens are "not parasitic and will not harm your tree." They attach to trees and other objects as a means of support. Because there are more than 1,000 different varieties of lichens, to get rid of them is not an easy task. If you don't like the appearance it has on your tree, you can discourage them from multiplying by opening up the canopy of your tree to let the sun and air inside. Lichens prefer a shady home.
Fertilizing in spring will improve the tree's health, and removing any vegetation around the tree will further increase air circulation around the tree.
I hope this is helpful. Here's our more general article about caring for cedars: