In our shared effort against climate change, studies indicate forests to be one of the most effective tools we have. Our forests not only help regulate our climate system, they are critical sources of food, clean water and air, wood products, recreation and connection with nature. Trees also trap greenhouse gas emissions and help regulate ground level temperatures.
Unfortunately, most of these critical ecosystem services have not historically been economical. This has led to extractive management practices that are focused solely on short-term economic gains. Such practices can degrade forest soils, reduce biodiversity and resilience to disease, lead to conversion of forests to other uses and overall short-circuit one of our best tools for mitigating climate change. If current trends continue, forests could go from our country's largest carbon sink to a possible net source of carbon emissions in the coming decades.
Carbon markets were developed to price the effects of greenhouse gas emissions as well as the value of the natural ecosystems that mitigate it. For many years, the high costs of project development and the low price of carbon have ensured these markets were only available to large forestland owners with many thousands of acres of forest. LandYield and Finite Carbon bring a combination of financial and technological expertise and innovation that is overcoming these barriers.
What is a Carbon Credit?
Voluntary carbon markets have grown exponentially over the last several years. With this growth, there have been a flurry of articles, new businesses and sometimes conflicting messaging that many landowners understandably find confusing. We will unravel a bit of that here and point toward other good resources that can help landowners navigate carbon markets.
First, it is important to understand the difference between the voluntary market and the compliance market.
- Compliance Markets: Compliance markets such as the one in California and the European Union require companies to meet certain emissions standards or compensate with carbon allowances (issued by the regulatory body) or carbon credits that meet a certain standard.
- The Voluntary Market: In the voluntary market, companies voluntarily purchase credits from social and environmental emission reducing projects they wish to support. Companies investing in voluntary carbon projects are not otherwise required to do so, hence the term voluntary. The voluntary market is not regulated by any government agency, but rather by registries that set project methodology standards and provide third-party audits. Registries collaborate with relevant scientists to outline which tons of carbon can be counted as a credit and how they are to be calculated.
A carbon credit (sometimes referred to as a “carbon offset”) represents one metric ton of CO2 (or its equivalent in methane or nitrous oxide) that is either removed from the atmosphere or not emitted in the first place. In order to be counted and sold as a credit, these tons must be considered ‘additional’ to what would take place under normal economic and legal conditions (business as usual).
For forest projects, this means that in order to be counted as additional and eligible for payment, carbon must be embodied in trees that are merchantable, accessible, and legal to harvest. Forests that are legally protected or too young to be harvested are not generally eligible to produce carbon credits.
Project developers collect and analyze forest data in order to quantify how many tons of carbon in a particular forest meet the registry requirements to be considered ‘additional’ then submit that analysis to the registry for review. After a thorough review by the registry and a qualified third-party auditor, the registry issues carbon credits equal to the amount of additional tons produced by the project. Each credit is associated with the year the carbon is captured (vintage) and has a unique serial number for tracking.
How to Become a Carbon Offset Provider: LandYield
The goal at LandYield is to provide access to carbon markets for family forest owners in the United States. Our program uses technological and financial innovation to issue ACR certified credits through a methodology designed specifically to serve small, non-industrial forest owners.
Forest owners with 40 to 5,000 acres of timber are eligible to apply and get an instant revenue estimate free of charge. To enroll, landowners must commit to a 20-year harvest deferral followed by a 20-year monitoring period. During the first 20 years, landowners will be paid quarterly for the additional carbon their forests sequester and store. During the second 20-year period, landowners may begin harvesting growth, but must maintain the volume of wood that has been sold as carbon credits.
To learn more and get started, visit our website where you can get questions answered through our FAQs and an instant revenue estimate based on your forest acres and county location. Lastly, we would love to hear from you. Feel free to email your questions to info@landyield.com. We understand enrolling your forest in a carbon project can seem complex and daunting and have knowledgeable folks who are happy to chat.
